1-1     By:  Yarbrough (Senate Sponsor - Patterson)           H.B. No. 3170

 1-2           (In the Senate - Received from the House May 1, 1997;

 1-3     May 2, 1997, read first time and referred to Committee on

 1-4     Intergovernmental Relations; May 9, 1997, reported adversely, with

 1-5     favorable Committee Substitute by the following vote:  Yeas 9, Nays

 1-6     0; May 9, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 3170                By:  Moncrief

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to a firefighters' relief and retirement fund in certain

1-11     municipalities.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Title 109, Revised Statutes, is amended by adding

1-14     Article 6243e.2(1) to read as follows:

1-15           Art. 6243e.2(1).  FIREFIGHTERS' RELIEF AND RETIREMENT FUND IN

1-16     MUNICIPALITIES OF AT LEAST 1,600,000 POPULATION

1-17           Sec. 1.  DEFINITIONS.  In this article:

1-18                 (1)  "Average monthly salary" means one thirty-sixth of

1-19     the member's salary as a firefighter for the member's highest 78

1-20     biweekly pay periods during the member's participation in the fund

1-21     or, if the member has participated in the fund for less than three

1-22     years, the total salary paid to the member for the periods the

1-23     member participated in the fund divided by the number of months the

1-24     member has participated in the fund.  If a member is not paid on

1-25     the basis of biweekly pay periods, "average monthly salary" is

1-26     determined on the basis of the number of pay periods under the

1-27     payroll practices of the municipality sponsoring the fund that most

1-28     closely correspond to 78 biweekly pay periods.

1-29                 (2)  "Board" or "board of trustees" means the board of

1-30     trustees of a firefighters' relief and retirement fund established

1-31     under this article.

1-32                 (3)  "Code" means the federal Internal Revenue Code of

1-33     1986.

1-34                 (4)  "Deferred retiree" means a member who is eligible

1-35     for a benefit under Section 8(a) of this article.

1-36                 (5)  "Disabled child" means any individual who is the

1-37     child of a member by birth or adoption and who is totally disabled

1-38     as a result of a physical or mental illness or injury, including

1-39     retardation, at the time the member dies or who becomes so disabled

1-40     before reaching 18 years of age.  The term includes a child the

1-41     board determines is unable to pursue any gainful employment.

1-42                 (6)  "DROP" means the deferred retirement option plan

1-43     under Section 5 of this article.

1-44                 (7)  "DROP account" means the notional account

1-45     established to reflect the credits, contributions, and earnings or

1-46     losses of a member who has made a DROP election in accordance with

1-47     Section 5 of this article.

1-48                 (8)  "Eligible child" means a child of a member by

1-49     birth or adoption who is unmarried and under 18 years of age, a

1-50     disabled child, or under 23 years of age, unmarried, and a

1-51     full-time student enrolled in an accredited college or university,

1-52     but only if the member executes an election permitting the child to

1-53     be treated as an eligible child in accordance with procedures

1-54     established by the board or if the member does not have an eligible

1-55     spouse.

1-56                 (9)  "Eligible parent" means a parent of a member, by

1-57     birth or by adoption while the member was a minor, who proves to

1-58     the satisfaction of the board that the parent was a dependent of

1-59     the member immediately before the member's death.

1-60                 (10)  "Eligible spouse" means:

1-61                       (A)  in the case of a member who dies after June

1-62     30, 1998, a spouse to whom the member was married at the time of

1-63     the member's death; or

1-64                       (B)  in the case of a member who dies before July

 2-1     1, 1998, a spouse to whom the member was married at the time the

 2-2     member's benefit under this article is scheduled to begin and at

 2-3     the time of the member's death.

 2-4                 (11)  "Firefighter" means a full-time, fully paid,

 2-5     active, classified member of a regularly organized fire department

 2-6     of an incorporated municipality  with a fund established under this

 2-7     article.

 2-8                 (12)  "Fund" means a firefighters' relief and

 2-9     retirement fund established under this article.

2-10                 (13)  "Member" means a firefighter or former

2-11     firefighter who has satisfied the eligibility requirements under

2-12     Section 13 of this article and who has not yet received a

2-13     distribution of the entire benefit to which the person is entitled

2-14     under this article.

2-15                 (14)  "Off-duty disability" means a physical or mental

2-16     disability that:

2-17                       (A)  is likely to be permanent; and

2-18                       (B)  results from a cause other than a bodily

2-19     injury received in, or illness caused by, the performance of a

2-20     member's duties as a firefighter.

2-21                 (15)  "On-duty disability" means a physical or mental

2-22     disability that:

2-23                       (A)  is likely to be permanent; and

2-24                       (B)  results from a bodily injury received in, or

2-25     illness caused by, the performance of the member's duties as a

2-26     firefighter.

2-27                 (16)  "Salary" means the amounts includable in gross

2-28     income of a member plus any amount not includable in gross income

2-29     under Section 125, Section 402(e)(3) or (h), Section 403(b), or

2-30     Section 414(h) of the code.

2-31                 (17)  "Years of participation" means the number of

2-32     years that a member has participated in the fund by making the

2-33     contributions required by this article, as determined under rules

2-34     established by the board.

2-35           Sec. 2.  FUND AND BOARD OF TRUSTEES.  (a)  A firefighters'

2-36     relief and retirement fund is established in each incorporated

2-37     municipality that has a population of at least 1,600,000 and a

2-38     fully paid fire department.

2-39           (b)  The board of trustees of the fund shall be known as the

2-40     "Board of Firefighters' Relief and  Retirement  Fund  Trustees of

2-41     __________, Texas."  The board consists of 10 trustees, including:

2-42                 (1)  the mayor or an appointed representative of the

2-43     mayor;

2-44                 (2)  the treasurer of the municipality or, if there is

2-45     not a treasurer, the secretary, clerk, or other person who by law,

2-46     charter provision, or ordinance performs the duty of treasurer of

2-47     the municipality;

2-48                 (3)  five firefighters who are members of the fund;

2-49                 (4)  one person who is a retired firefighter and a

2-50     member of the fund with at least 20 years of participation; and

2-51                 (5)  two persons, each of whom is a registered voter of

2-52     the municipality, has been a resident of the municipality for at

2-53     least three years preceding the date of initial appointment, and is

2-54     not a municipal officer or employee.

2-55           (c)  To serve as a trustee under Subsection (b)(3) of this

2-56     section, a person must be elected by ballot of the firefighters who

2-57     are members of the fund.  That election shall be held during the

2-58     last quarter of the year preceding the January in which the term of

2-59     a trustee occupying one of those positions expires.  The trustee

2-60     serves a term of three years.  Three of the trustees described

2-61     under Subsection (b)(3) of this section shall be elected from the

2-62     suppression division of the fire department.  One of the trustees

2-63     from the suppression division must have the rank of firefighter or

2-64     engineer/operator, and the position on the board to which that

2-65     trustee is elected is designated as Position I.  One of the

2-66     trustees from the suppression division must have the rank of

2-67     captain or senior captain, and the position on the board to which

2-68     that trustee is elected is designated as Position II.  One of the

2-69     trustees from the suppression division must have the rank of

 3-1     district chief, deputy chief, or assistant chief, and the position

 3-2     on the board to which that trustee is elected is designated as

 3-3     Position III.  One of the trustees described under Subsection

 3-4     (b)(3) of this section shall be elected from the fire prevention

 3-5     division, and the position on the board to which that trustee is

 3-6     elected is designated as Position IV.  One of the trustees

 3-7     described under Subsection (b)(3) of this section shall be elected

 3-8     from the fire alarm operators division or the fire department

 3-9     repair division, and the position on the board to which that

3-10     trustee is elected is designated as Position V.

3-11           (d)  To serve as a trustee under Subsection (b)(4) of this

3-12     section, a person must be elected by ballot of those retired

3-13     members with at least 20 years of participation in the fund.  The

3-14     election shall be held during the last quarter of every third year

3-15     starting in 1997.  The trustee serves a three-year term, starting

3-16     in January after the trustee is elected.

3-17           (e)  To serve as a trustee under Subsection (b)(5) of this

3-18     section, a person must be appointed by the elected members of the

3-19     board.  Each of those trustees serves a staggered term of two

3-20     years.  The appointment or reappointment of one of those trustees

3-21     shall take place in December of each year.

3-22           (f)  If a vacancy occurs in an elected position on the board,

3-23     the vacancy shall be filled in the manner provided in this section

3-24     for the election of the trustee to that position.  The election may

3-25     occur either at the next following regular election of trustees by

3-26     members of the fire department or in a special election called by

3-27     the board.  If a vacancy occurs in a position appointed by the

3-28     elected trustees of the board, that position shall be filled by a

3-29     vote of the elected trustees of the board.  A trustee who is

3-30     elected or selected to fill a vacancy holds office for the

3-31     unexpired term of the trustee who vacated that position.

3-32           (g)  Each trustee of the board shall, at the first board

3-33     meeting following the trustee's most recent election or

3-34     appointment, take an oath of office that the trustee will

3-35     diligently and honestly administer the affairs of the fund and that

3-36     the trustee will not knowingly violate or willingly permit this

3-37     article to be violated.

3-38           (h)  The board shall annually elect from among the trustees a

3-39     chair, a vice chair, and a secretary.  The person described under

3-40     Subsection (b)(2) of this section serves as the treasurer of the

3-41     fund under penalty of that person's official bond and oath of

3-42     office.

3-43           (i)  A trustee of the board may not receive compensation for

3-44     service on the board.

3-45           (j)  A majority of the trustees of the board constitutes a

3-46     quorum to transact business.  An order of the board must be made by

3-47     vote recorded in the minutes of the board's proceedings.  Each

3-48     decision of the board in a matter under the board's jurisdiction is

3-49     final and binding as to each affected firefighter, member, and

3-50     beneficiary, subject only to the rights of appeal specified by this

3-51     article.

3-52           (k)  The board shall receive, manage, and disburse the fund

3-53     for the municipality and shall hear and determine applications for

3-54     retirement and claims for disability and designate the

3-55     beneficiaries or persons entitled to participate as provided by

3-56     this article.

3-57           (l)  The board shall hold regular monthly meetings at a time

3-58     and place as the board by resolution designates and may hold

3-59     special meetings on call of the chair as the chair determines is

3-60     necessary, keep accurate minutes of board meetings and records of

3-61     board proceedings, keep separate from all other municipal funds all

3-62     money for the use and benefit of the fund, and keep a record of

3-63     claims, receipts, and disbursements.  A disbursement from the fund

3-64     may be made in accordance with procedures established by the board.

3-65           (m)  The municipality shall provide full and timely

3-66     information to the board on matters relating to the hiring of new

3-67     firefighters, compensation of members, members' deaths or

3-68     terminations of service, and such other information concerning

3-69     firefighters as is reasonably required by the board, from time to

 4-1     time, for the board to administer the fund and provide benefits

 4-2     properly.

 4-3           (n)  The board shall not later than January 31 of each year

 4-4     make and file with the treasurer of the municipality a detailed and

 4-5     itemized report of all receipts and disbursements with respect to

 4-6     the fund, together with a statement of fund administration, and

 4-7     shall make and file other reports and statements or furnish further

 4-8     information as from time to time may be required or requested by

 4-9     the treasurer of the municipality.

4-10           (o)  The secretary of the board shall, not later than the

4-11     seventh day after the date of each board meeting, forward true

4-12     copies of the minutes of the meeting to each fire station and to

4-13     each division of the fire department.

4-14           (p)  The board shall manage the fund according to the terms

4-15     and purposes of this article and all applicable sections of the

4-16     code and has the powers necessary to accomplish that purpose,

4-17     including the power to:

4-18                 (1)  adopt for the administration of the fund written

4-19     rules and guidelines not inconsistent with this article;

4-20                 (2)  interpret and construe this article and any

4-21     summary plan descriptions or benefits procedures, except that each

4-22     construction must meet any qualification requirements established

4-23     under Section 401 of the code;

4-24                 (3)  correct any defect, supply any omission, and

4-25     reconcile any inconsistency that appears in this article in a

4-26     manner and to the extent that the board considers expedient to

4-27     administer this article for the greatest benefit of all members;

4-28                 (4)  select, employ, and compensate employees the board

4-29     considers necessary or advisable in the proper and efficient

4-30     administration of the fund;

4-31                 (5)  determine all questions, whether legal or factual,

4-32     relating to eligibility for participation, service, or benefits or

4-33     relating to the administration of the fund to promote the uniform

4-34     administration of the fund for the benefit of all members;

4-35                 (6)  establish and maintain records necessary or

4-36     appropriate to the proper administration of the fund; and

4-37                 (7)  compel witnesses to attend and testify before the

4-38     board concerning matters related to the operation of this article

4-39     in the same manner provided for taking of testimony before notaries

4-40     public.

4-41           (q)  The chair may administer oaths to witnesses.

4-42           (r)  The board shall maintain at the offices of the fund the

4-43     original of each rule or guideline adopted under this section and

4-44     shall deliver to the municipality a copy of each adopted rule or

4-45     guideline.

4-46           Sec. 3.  OTHER POWERS OF THE BOARD.  (a)  If the board

4-47     determines that there is a surplus of funds in an amount exceeding

4-48     the current demands on the fund, the board may invest the surplus

4-49     in the manner provided by Chapter 802, Government Code.

4-50           (b)  The board may employ persons to perform any investment,

4-51     administrative, legal, medical, accounting, clerical, or other

4-52     service the board considers appropriate, including:

4-53                 (1)  a certified public accountant or firm of certified

4-54     public accountants to perform an audit of the fund at times and

4-55     intervals the board considers necessary;

4-56                 (2)  a professional investment manager or firm of

4-57     managers as provided by Section 802.204, Government Code;

4-58                 (3)  an actuary or actuarial firm at times and for

4-59     purposes the board considers necessary or appropriate;

4-60                 (4)  an attorney or firm of attorneys to advise,

4-61     assist, or represent the board in any legal matter relating to the

4-62     fund, including litigation involving matters under this article; or

4-63                 (5)  a physician to examine a firefighter before the

4-64     firefighter becomes a member of the fund or to examine a member or

4-65     beneficiary applying for or receiving a disability pension or

4-66     survivor benefit.

4-67           (c)  A fee incurred in connection with a service or person

4-68     employed under Subsection (b) of this section may be paid from the

4-69     fund, except that the costs of audits under Subsection (b)(1) of

 5-1     this section may be paid from the fund only if the municipality

 5-2     does not pay that cost.

 5-3           (d)  The board may have an actuarial valuation performed each

 5-4     year, and for determining the municipality's contribution rate as

 5-5     provided by Section 13(d) of this article, the board may adopt a

 5-6     new actuarial valuation each year, except that an actuarial

 5-7     valuation that will result in an increased municipal contribution

 5-8     rate that is above the statutory minimum may be adopted only once

 5-9     every three years, unless the governing body of the municipality

5-10     consents to a more frequent increase.

5-11           (e)  In addition to any other remedy the board has, including

5-12     any right of set-off from future benefits, the board may recover by

5-13     civil action from any offending party or from the party's surety

5-14     money paid out or obtained from the fund through fraud,

5-15     misrepresentation, defalcation, theft, embezzlement, or

5-16     misapplication and may institute, conduct, and maintain the action

5-17     in the name of the board for the use and benefit of the fund.

5-18           (f)  On written request from the chair, the municipal

5-19     attorney shall represent the board or the fund in any legal matter,

5-20     including litigation.  The municipal attorney is not entitled to

5-21     compensation from the fund for providing that representation.

5-22           (g)  The board may, from fund assets, purchase from an

5-23     insurer licensed to do business in this state insurance to cover

5-24     liabilities and losses of the fund and to indemnify and hold the

5-25     trustees of the board and employees of the board, individually and

5-26     collectively, harmless from the effects and consequences of their

5-27     acts, omissions, and conduct within the scope of their official

5-28     capacity as fiduciaries or cofiduciaries or within the scope of

5-29     what the board trustee or employee believes in good faith, at the

5-30     time, to be the board trustee's or employee's official capacity.

5-31     An insurance company through which insurance is purchased under

5-32     this subsection has a cause of action against a board trustee or

5-33     employee to the extent that a loss results from the board trustee's

5-34     or employee's wilful and malicious misconduct or gross negligence.

5-35     If insurance is unavailable, insufficient, inadequate, or not in

5-36     effect, the board may indemnify a board trustee or employee for

5-37     liability imposed as damages and for reasonable costs and expenses

5-38     incurred by that individual in defense of an alleged act, error, or

5-39     omission committed in the individual's official capacity or within

5-40     the scope of what the board trustee or employee believed in good

5-41     faith, at the time, to be the board trustee's or employee's

5-42     official capacity.  The board may not indemnify a board trustee or

5-43     employee for the amount of a loss that results from the board

5-44     trustee's or  employee's wilful and malicious misconduct or gross

5-45     negligence.  The board may establish a self-insurance fund to pay

5-46     claims for the indemnification.  The board shall provide that the

5-47     self-insurance fund must be limited to an amount not to exceed the

5-48     greater of three percent of the fund assets or $5 million.  The

5-49     self-insurance fund shall be invested in the same manner as other

5-50     assets of the fund, and all earnings and losses from investing the

5-51     self-insurance fund shall be credited to the self-insurance fund

5-52     unless that credit exceeds the limit on the self-insurance fund set

5-53     by the board or this subsection.  Amounts held in the

5-54     self-insurance fund may not be included in the actuarial valuation

5-55     for purposes of determining the municipal contribution rate or the

5-56     assets available to satisfy the actuarial liabilities of the fund

5-57     to pay service, disability, or death benefits provided by this

5-58     article.  A decision to indemnify or make a reimbursement out of

5-59     the  self-insurance fund must be made by a majority vote of board

5-60     trustees eligible to vote on the matter.  If the proposed

5-61     indemnification or reimbursement is of a trustee, that trustee may

5-62     not vote on the matter.

5-63           Sec. 4.  SERVICE PENSION BENEFITS.  (a)  A member with at

5-64     least 20 years of participation who terminates active service for

5-65     any reason other than death is entitled to receive a service

5-66     pension provided by this section.

5-67           (b)  A member who terminates active service on or after

5-68     November 1, 1997, and who has completed at least 20 years of

5-69     participation in the fund on the effective date of termination of

 6-1     service is entitled to a monthly service pension, beginning on the

 6-2     effective date of termination of active service, in an amount equal

 6-3     to 50 percent of the member's average monthly salary, plus three

 6-4     percent of the member's average monthly salary for each year of

 6-5     participation in excess of 20 years, but not in excess of 30 years

 6-6     of participation, for a maximum total benefit of 80 percent of the

 6-7     member's average monthly salary.

 6-8           (c)  A member who terminated active service before November

 6-9     1, 1997, and who had completed at least 20 years of participation

6-10     on the effective date of termination of service is entitled on

6-11     retirement to receive a monthly service pension in the amount

6-12     provided under the law in effect on the effective date of that

6-13     retirement, unless a subsequent benefit increase is expressly made

6-14     applicable to that member.

6-15           (d)  A member with a service or disability pension, other

6-16     than a deferred retiree or an active member who has elected the

6-17     DROP under Section 5(b) of this article, who began receiving

6-18     benefits from the fund before November 1, 1997, or a member's

6-19     beneficiary who began receiving benefits from the fund before

6-20     November 1, 1997, shall be paid a one-time additional benefit of

6-21     $5,000 from the fund, payable in a lump sum as soon as

6-22     administratively practicable after November 1, 1997.

6-23           (e)  The total monthly benefit payable to a retired or

6-24     disabled member, other than a deferred retiree or active member who

6-25     has elected the DROP under Section 5(b) of this article, or each

6-26     eligible survivor of a deceased member, shall be increased by $100,

6-27     beginning with the monthly payment made for July 1999.  That

6-28     additional benefit may not be increased under Section 11(c) of this

6-29     article.

6-30           (f)  The benefit under Subsection (d) of this section shall

6-31     be paid to the member or to the eligible spouse of a deceased

6-32     member.  If the member is deceased and there is no eligible spouse,

6-33     the benefit shall be divided equally among and paid to each

6-34     eligible child of the member, or, if there is no eligible child,

6-35     the benefit shall be divided among the eligible parents of the

6-36     member.

6-37           Sec. 5.  DEFERRED RETIREMENT OPTION PLAN.  (a)  A member who

6-38     is eligible to receive a service pension under Section 4 of this

6-39     article and who remains in active service may elect to participate

6-40     in the deferred retirement option plan provided by this section.

6-41     On subsequently terminating active service, a member who elected

6-42     the DROP may apply for a monthly service pension under Section 4 of

6-43     this article, except that the effective date of the member's

6-44     election to participate in the DROP will be considered the member's

6-45     retirement date for determining the amount of the member's monthly

6-46     service pension.  The member may also apply for any DROP benefit

6-47     provided under this section on terminating active service.  Except

6-48     as provided by Subsection (n) of this section, an election to

6-49     participate in the DROP, once approved by the board, is

6-50     irrevocable.

6-51           (b)  A member may elect to participate in the DROP by

6-52     complying with the election process established by the board.  The

6-53     member's election may be made at any time beginning on the date the

6-54     member has completed 20 years of participation in the fund and is

6-55     otherwise eligible for a service pension under Section 4 of this

6-56     article.  The election becomes effective on the first day of the

6-57     month following the month in which the board approves the member's

6-58     DROP election.  Beginning on the effective date of the member's

6-59     DROP election, amounts equal to the deductions made from the

6-60     member's salary under Section 13(c) of this article shall be

6-61     credited to the member's DROP account.  If a DROP participant

6-62     remains in active service after the fifth anniversary of the

6-63     effective date of the member's DROP election, subsequent deductions

6-64     from the member's salary under Section 13(c) of this article may

6-65     not be credited to the member's DROP account and may not otherwise

6-66     increase any benefit payable from the fund for the member's

6-67     service.

6-68           (c)  Beginning in the month a member's DROP election becomes

6-69     effective, an amount equal to the monthly service pension the

 7-1     member would have received under Section 4 of this article and

 7-2     Section 11(c) of this article, if applicable, had the member

 7-3     terminated active service on the effective date of the member's

 7-4     DROP election shall be credited to a DROP account maintained for

 7-5     the member.  That monthly credit to the member's DROP account shall

 7-6     continue until the earlier of the date the member terminates active

 7-7     service or the fifth anniversary of the effective date of the

 7-8     member's DROP election.

 7-9           (d)  A member's DROP account shall be credited with earnings

7-10     or losses at an annual rate equal to the average annual return

7-11     earned by the fund over the five years preceding, but not

7-12     including, the year during which the credit is given.  Those

7-13     earnings or losses shall be computed and credited at a time and in

7-14     a manner determined by the board, except that earnings or losses

7-15     shall be credited not less  frequently than once in each 13-month

7-16     period and shall take into account partial years of participation

7-17     in the DROP.  If the member has not terminated active service, the

7-18     member's DROP account may not be credited with earnings or losses

7-19     after the fifth anniversary of the effective date of the member's

7-20     DROP election.

7-21           (e)  A member who terminates active service after

7-22     participating in the DROP is entitled to receive, in addition to

7-23     the member's service pension under Section 4 of this article, a

7-24     benefit equal to the balance of the member's DROP account.  Unless

7-25     the member elects to receive installment or partial distributions

7-26     in accordance with Subsection (f) or (h) of this section, the

7-27     balance of a member's DROP account shall be paid to the member in a

7-28     single lump-sum payment as soon as is administratively practicable

7-29     after the member's termination of active service.

7-30           (f)  In lieu of a single lump-sum payment, a member may elect

7-31     to receive the balance of the member's DROP account in three

7-32     substantially equal installments. A member electing the installment

7-33     form of distribution is entitled to receive the first installment

7-34     within a reasonable period after terminating active service.  The

7-35     second and third installments shall be paid to the member on the

7-36     first and second anniversaries of the date of the first

7-37     installment.  A member electing to receive the member's DROP

7-38     account balance in installments may convert that election at any

7-39     time after receipt of the first installment to an election to

7-40     receive the remainder of the member's DROP account balance in a

7-41     lump-sum payment.  If a member elects to receive installments, the

7-42     member's DROP account may not be credited with earnings or losses

7-43     occurring after the member leaves active service.  The DROP account

7-44     balance of a member who elects to receive the member's DROP account

7-45     balance in installments may not be credited with interest after the

7-46     date of payment of the first installment.

7-47           (g)  The board may adopt by a majority vote the provisions of

7-48     Subsections (h) and (i) of this section.

7-49           (h)  In lieu of a single lump-sum payment, a member may elect

7-50     to receive partial payments from the member's DROP account for each

7-51     calendar year, in an amount elected by the member.  The board may

7-52     establish procedures concerning partial payments, including

7-53     limitations on timing and frequency of those payments.  A member

7-54     who elects partial payments may, at any time, elect to receive the

7-55     member's entire remaining DROP account balance in a single lump-sum

7-56     payment.

7-57           (i)  If a member elects partial payments, for periods after a

7-58     member terminates active service and before the member's DROP

7-59     account is completely distributed, the member's DROP account shall

7-60     be credited with earnings or losses of the fund as computed under

7-61     Subsection (d) of this section and reduced by an administrative fee

7-62     of one percent of the account balance each year, determined before

7-63     adjustment for earnings or losses for the year.

7-64           (j)  An election by a member concerning installment or

7-65     partial payments as provided by Subsections (f)-(i) of this section

7-66     must satisfy the requirements of Section 401(a)(9) of the code.

7-67     All distributions and changes in form of distribution must be made

7-68     in a manner and at a time that comply with that provision.

7-69           (k)  A member who elects to participate in the DROP is

 8-1     considered to have terminated active service on the effective date

 8-2     of the member's DROP election for purposes of computing and

 8-3     providing service pension benefits under Section 4 of this article

 8-4     and for purposes of computing and providing death benefits under

 8-5     Section 7 of this article.  A salary earned or additional years of

 8-6     participation completed after the member's DROP election becomes

 8-7     effective may not be considered in the computation of retirement,

 8-8     disability, or death benefits unless a DROP revocation is made as

 8-9     prescribed by Subsection (n) of this section.

8-10           (l)  If a DROP participant dies before complete distribution

8-11     of the member's DROP account has been made, the member's DROP

8-12     account balance shall be distributed to the member's eligible

8-13     beneficiaries, determined as follows:

8-14                 (1)  if the member is survived by a person who was the

8-15     member's spouse on the member's last day of active service and one

8-16     or more eligible children, one-half of the member's DROP account

8-17     balance shall be paid to that eligible spouse, and the remaining

8-18     one-half shall be divided equally among the member's eligible

8-19     children;

8-20                 (2)  if the member is survived by a spouse described by

8-21     Subdivision (1) of this subsection, but not by an eligible child,

8-22     the member's entire DROP account balance shall be paid to the

8-23     surviving spouse;

8-24                 (3)  if the member is survived by one or more eligible

8-25     children, but not by a spouse described by Subdivision (1) of this

8-26     subsection, the member's DROP account balance shall be divided

8-27     equally among the eligible children;

8-28                 (4)  if the member is not survived by a spouse

8-29     described by Subdivision (1) of this subsection or an eligible

8-30     child, the member's DROP account balance shall be divided equally

8-31     among the member's eligible parents;

8-32                 (5)  if the member is not survived by a spouse

8-33     described by Subdivision (1) of this subsection, an eligible child,

8-34     or an eligible parent, the member's DROP account balance shall be

8-35     distributed in accordance with the member's beneficiary designation

8-36     filed with the board or, if the member has failed to file a valid

8-37     beneficiary designation, to the member's estate; and

8-38                 (6)  if a member's spouse described by Subdivision (1)

8-39     of this subsection was not married to the member on the date the

8-40     member's DROP election became effective, the spouse shall receive a

8-41     reduced benefit equal to the benefit otherwise payable to the

8-42     surviving spouse under this subsection, multiplied by the

8-43     percentage of the period between the member's DROP election and the

8-44     date the member left active service during which the spouse and the

8-45     member were married, and the amount by which the spouse's benefit

8-46     is reduced shall be divided among any other eligible survivors as

8-47     if the member did not have an eligible spouse.

8-48           (m)  An eligible beneficiary's share of a deceased member's

8-49     DROP account shall be distributed as soon as administratively

8-50     practicable after the member's death in the form of a single

8-51     lump-sum payment.  All distributions to beneficiaries under this

8-52     subsection must be made in a manner and at a time that comply with

8-53     Section 401(a)(9) of the code.

8-54           (n)  Except as otherwise provided by this subsection, a

8-55     member who participates in the DROP is ineligible for disability

8-56     benefits described by Section 6 of this article, and the member's

8-57     survivors are ineligible to receive enhanced death benefits

8-58     described by Section 7(c) of this article.  A DROP participant who

8-59     is determined under Section 6(c) of this article to be incapable of

8-60     performing any substantial gainful employment because of an on-duty

8-61     disability may retroactively revoke the member's DROP election if

8-62     the revocation occurs before the member receives a distribution

8-63     from the member's DROP account or retirement benefits.  If a DROP

8-64     participant dies in the course of the performance of the member's

8-65     duty or dies as a result of an on-duty disability described by

8-66     Section 6(c) of this article, the DROP participant's eligible

8-67     survivors under Section 7 of this article and the member's eligible

8-68     DROP beneficiaries under Subsection (l) of this section may, by

8-69     unanimous agreement, retroactively revoke the member's DROP

 9-1     election if the revocation occurs before receipt of a distribution

 9-2     from the member's DROP account, service pension benefits under

 9-3     Section 4 of this article, or death benefits under Section 7 of

 9-4     this article.  For purposes of this subsection, an on-duty

 9-5     disability must have occurred after the effective date of a

 9-6     member's election to participate in the DROP.  If a DROP election

 9-7     revocation is made as prescribed by this subsection, the member's

 9-8     DROP account is not distributed, and the member or the member's

 9-9     beneficiary, as applicable, is entitled to benefits under this

9-10     article as if a DROP election had not been made.

9-11           (o)  A retired member who previously participated in the DROP

9-12     and who returns to active service is subject to the terms of this

9-13     section in effect at the time of the member's return to active

9-14     service.

9-15           (p)  After August 31, 2000, the board may set a date after

9-16     which additional members will not be allowed to elect to

9-17     participate in the DROP.  A member whose election to participate in

9-18     the DROP becomes effective before a deadline established by the

9-19     board is entitled to continue participating in the DROP.

9-20           Sec. 6.  DISABILITY PENSION BENEFITS.  (a)  If the board

9-21     determines that a member has suffered an on-duty disability, the

9-22     member is entitled to an on-duty disability pension as provided by

9-23     this section in lieu of any other benefit under this article.

9-24           (b)  If the board determines that a member is not capable of

9-25     performing the usual and customary duties of the member's

9-26     classification or position because of the member's on-duty

9-27     disability, the member is entitled to receive a monthly disability

9-28     pension, beginning on the effective date of the member's

9-29     termination of active service, in an amount equal to the greater

9-30     of:

9-31                 (1)  50 percent of the member's average monthly salary;

9-32     or

9-33                 (2)  the service pension the member would have been

9-34     entitled to receive under Section 4 of this article based on years

9-35     of participation as of the effective date of the member's

9-36     termination of active service.

9-37           (c)  If the board determines that a member is not capable of

9-38     performing any substantial gainful activity because of the member's

9-39     on-duty disability, the member is entitled to receive a monthly

9-40     disability pension, beginning on the effective date of the member's

9-41     termination of active service, in an amount equal to the greater

9-42     of:

9-43                 (1)  75 percent of the member's average monthly salary;

9-44     or

9-45                 (2)  the service pension the member would have been

9-46     entitled to receive under Section 4 of this article based on years

9-47     of participation on the effective date of the member's termination

9-48     of active service.

9-49           (d)  If a full-time active member with at least six years of

9-50     service becomes disabled or dies from heart or lung disease or

9-51     cancer, and the member successfully passed a physical examination

9-52     before the claimed disability or death or on beginning employment

9-53     as a firefighter, and the examination failed to reveal any evidence

9-54     of the heart or lung disease  or cancer, that condition will be

9-55     presumed to have caused an on-duty disability for purposes of

9-56     determining eligibility for disability benefits under this section,

9-57     and the amount of the disability benefit constitutes the pension

9-58     amount that shall be used to determine the death benefit payable

9-59     with respect to that member.  Another statutory presumption

9-60     regarding the cause of illnesses or conditions does not affect any

9-61     benefit payable under this article.

9-62           (e)  If the board determines that a member is not capable of

9-63     performing the usual and customary duties of the member's

9-64     classification or position because of the member's off-duty

9-65     disability, the member is entitled to an off-duty disability

9-66     pension in lieu of any other benefit under this article.  If the

9-67     board makes that determination, the member is entitled to receive a

9-68     monthly disability pension, beginning on the effective date of the

9-69     member's termination of active service, in an amount equal to the

 10-1    greater of:

 10-2                (1)  25 percent of the member's average monthly salary,

 10-3    plus 2-1/2 percent of the member's average monthly salary for each

 10-4    full year of participation in the fund, except that the total

 10-5    monthly disability pension under this subdivision may not exceed 50

 10-6    percent of the member's average monthly salary; or

 10-7                (2)  the service pension the member would have been

 10-8    entitled to receive under Section 4 of this article based on years

 10-9    of participation on the effective date of the member's termination

10-10    of active service.

10-11          (f)  A member is not eligible for an on-duty or off-duty

10-12    disability pension as provided by this section if the member's

10-13    on-duty or off-duty disability is a direct and proximate result of

10-14    a condition that existed on the date the member began membership in

10-15    the fund.  In that event, if the member is not eligible to receive

10-16    a service pension under Section 4 of this article, the member may

10-17    elect any deferred pension or refund of contributions for which the

10-18    member is eligible under Section 8 of this article.  A member has a

10-19    preexisting condition under this subsection if the board determines

10-20    that the member had:

10-21                (1)  symptoms that would cause an ordinarily prudent

10-22    person to seek diagnosis, care, or treatment during the five-year

10-23    period before the effective date of the member's membership in the

10-24    fund; or

10-25                (2)  a condition for which medical advice or treatment

10-26    was recommended by or received from a physician during the

10-27    five-year period before the effective date of the member's

10-28    membership in the fund.

10-29          (g)  A person may not receive an on-duty or off-duty

10-30    disability pension from the fund unless the person or the person's

10-31    legal representative files with the board an application for

10-32    disability benefits, in the form approved by the board, and

10-33    certificates of the member's disability signed and sworn to by the

10-34    member and the member's physician or by a physician selected by the

10-35    board.  The board may require other or additional evidence of

10-36    disability before authorizing payment of disability pension

10-37    benefits.

10-38          (h)  The board shall make all determinations concerning

10-39    benefits under this section in accordance with uniform principles

10-40    consistently applied on the basis of medical or other evidence that

10-41    the board determines is necessary or desirable.

10-42          Sec. 7.  DEATH BENEFITS.  (a)  If a member dies who is

10-43    eligible to receive a service pension under Section 4 of this

10-44    article, a disability pension under Section 6 of this article, or a

10-45    deferred pension under Section 8(a) of this article, or who is

10-46    receiving those benefits, the member's eligible survivors are

10-47    entitled to death benefits as follows:

10-48                (1)  if the member is survived by both an eligible

10-49    spouse and one or more eligible children, the eligible spouse is

10-50    entitled to receive a monthly death benefit equal to one-half of

10-51    the amount the member would have been entitled to receive, and the

10-52    surviving eligible children are entitled to receive a monthly death

10-53    benefit equal to the remainder of the amount the member would have

10-54    been entitled to receive, divided equally among the eligible

10-55    children;

10-56                (2)  if the member is not survived by an eligible

10-57    child, or if at any time after the death of the member an eligible

10-58    child is not entitled to a benefit, the monthly death benefit to be

10-59    paid the eligible spouse is equal to the full amount the member

10-60    would have been entitled to receive;

10-61                (3)  if the member is not survived by an eligible

10-62    spouse, or if the member's eligible spouse dies after being

10-63    entitled to a death benefit under this section, the surviving

10-64    eligible children are entitled to receive a monthly death benefit

10-65    equal to the full monthly pension benefit the member would have

10-66    been entitled to receive, divided equally among the member's

10-67    eligible children then living; and

10-68                (4)  if the member is not survived by an eligible

10-69    spouse or an eligible child, a monthly death benefit equal to the

 11-1    full monthly pension benefit the member would have been entitled to

 11-2    receive shall be divided among the eligible parents of the deceased

 11-3    member.

 11-4          (b)  If a member's eligible spouse was married to the member

 11-5    for less than five years and was not married to the member at the

 11-6    time the member left active service, the eligible spouse shall be

 11-7    paid a reduced benefit equal to the benefit otherwise payable to

 11-8    the eligible spouse under this section, multiplied by the time the

 11-9    eligible spouse was married to the member, and divided by five

11-10    years.  The amount by which the eligible spouse's benefit is

11-11    reduced shall be divided among any other eligible survivors as if

11-12    the member did not have an eligible spouse.

11-13          (c)  Notwithstanding any other provision of this section, if

11-14    a member dies in the course of the performance of the member's

11-15    duties as a firefighter or suffers an on-duty disability and dies

11-16    as a result of the bodily injuries that caused the on-duty

11-17    disability, death benefits based on the member's service shall be

11-18    computed on the basis of a benefit equal to 100 percent of the

11-19    deceased member's average monthly salary.

11-20          (d)  If a member dies after benefit payments have begun or at

11-21    a time the member could have terminated active service and elected

11-22    to receive a service pension or deferred pension immediately, the

11-23    death benefits payable under this section shall begin or continue

11-24    effective as of the member's date of death.  If a member who is not

11-25    entitled to receive any monthly pension benefit under this article

11-26    other than a deferred pension under Section 8(a) of this article

11-27    dies before age 50, any monthly death benefits payable under this

11-28    section shall begin on the date the deceased member would have

11-29    reached age 50.

11-30          (e)  In addition to the monthly death benefit provided under

11-31    Subsection (a) of this section, if an active member or a member

11-32    receiving a service pension under Section 4 of this article or a

11-33    disability pension under Section 6 of this article dies on or after

11-34    July 1, 1998, the member's eligible survivors are entitled to a

11-35    one-time $5,000 death benefit, payable as a lump sum as follows:

11-36                (1)  if the member is survived by an eligible spouse,

11-37    the eligible spouse is entitled to receive $5,000;

11-38                (2)  if the member is not survived by an eligible

11-39    spouse, the member's eligible children are entitled to receive

11-40    $5,000, divided equally among those children; or

11-41                (3)  if the member is not survived by an eligible

11-42    spouse or an eligible child, the $5,000 death benefit shall be

11-43    divided equally among the parents of the deceased member.

11-44          (f)  A member in active service who dies, for purposes of

11-45    Subsection (a) of this section, shall be treated as having become

11-46    disabled because of the member's cause of death on the date of the

11-47    member's death.

11-48          (g)  If a member in active service dies and does not leave an

11-49    eligible survivor, or the eligible survivors unanimously elect such

11-50    a benefit in lieu of any other death benefit, a lump-sum benefit

11-51    shall be paid in an amount equal to the refund, if any, to which

11-52    the member would have been entitled under Section 8 of this article

11-53    had the member terminated service on the date of the member's

11-54    death.  That lump-sum benefit shall be paid to the eligible

11-55    survivors as provided by Subsection (a) of this section or, if

11-56    there are not any eligible survivors, to the member's designated

11-57    beneficiary.  A member's beneficiary must be designated before the

11-58    member's death on a form approved by the board.  If more than one

11-59    beneficiary is designated, the benefit shall be divided equally

11-60    among the beneficiaries unless a different allocation is provided

11-61    in the designation.  If a member fails to properly designate a

11-62    beneficiary, the benefit provided by this subsection shall be

11-63    payable to the member's estate on application by the estate.  Money

11-64    payable under this subsection may not escheat to the state.

11-65          (h)  Death benefits are not payable under this article,

11-66    including benefits to any survivor, based on a member's service if

11-67    the board determines that the member's death resulted from suicide

11-68    or attempted suicide that occurred before the member completed two

11-69    years of participation or that the member's death resulted from a

 12-1    disability arising out of an attempted suicide that occurred before

 12-2    the member completed two years of participation.

 12-3          (i)  A benefit payable under this section to a member's

 12-4    eligible child ceases when the child ceases to be an eligible

 12-5    child.

 12-6          (j)  An eligible spouse is entitled to receive or continue to

 12-7    receive survivor benefits on remarriage, except that a person who

 12-8    is an eligible spouse of more than one member is entitled to

 12-9    receive survivor benefits as the eligible spouse of only the member

12-10    whose survivor benefits provide the highest benefit to that

12-11    eligible spouse.

12-12          Sec. 8.  DEFERRED PENSION AT AGE 50; REFUND OF CONTRIBUTIONS.

12-13    (a)  A member who terminates active service for any reason other

12-14    than death with at least 10 years of participation, but less than

12-15    20 years of participation, is entitled to a monthly deferred

12-16    pension benefit, beginning at age 50, in an amount equal to 1.7

12-17    percent of the member's average monthly salary multiplied by the

12-18    amount of the member's years of participation.

12-19          (b)  In lieu of the deferred pension benefit provided under

12-20    Subsection (a) of this section, a member who terminates active

12-21    service for any reason other than death with at least 10 years of

12-22    participation, but less than 20 years of participation, may elect

12-23    to receive a lump-sum refund of the member's contributions to the

12-24    fund with interest computed at five percent, not compounded.  A

12-25    member's election to receive a refund of contributions must be made

12-26    on a form approved by the board.  The member's refund shall be paid

12-27    as soon as administratively practicable after the member's election

12-28    is received.

12-29          (c)  A member who terminates employment for any reason other

12-30    than death before the member has completed 10 years of

12-31    participation is entitled only to a refund of the member's

12-32    contributions without interest and is not entitled to a deferred

12-33    pension benefit under this section or to any other benefit under

12-34    this article.  The member's refund shall be paid as soon as

12-35    administratively practicable after the effective date of the

12-36    member's termination of active service.

12-37          Sec. 9.  PROOF OF CONTINUED DISABILITY.  (a)  The board may

12-38    at any time require a person receiving a disability pension or

12-39    receiving death benefits as a disabled child under this article to

12-40    undergo a medical examination by a physician appointed or selected

12-41    by the board for that purpose.

12-42          (b)  A person retired for disability under Section 6(c) of

12-43    this article or a person receiving death benefits as a disabled

12-44    child under Section 7 of this article must file an annual report of

12-45    employment activities and earnings with the board.  The board shall

12-46    establish the form of the report and the time for filing the

12-47    report.

12-48          (c)  The result of the examination, the report by the

12-49    physician, and the report of employment activities and earnings

12-50    shall be considered by the board in determining whether the relief

12-51    in the case shall be continued, increased if less than the maximum

12-52    provided, decreased, or discontinued.  The board may reduce or

12-53    entirely discontinue all benefits to a person receiving benefits

12-54    under this article who, after notice from the board, fails to

12-55    appear for a required medical examination or fails to file the

12-56    report of employment activities and earnings.

12-57          Sec. 10.  NONSTATUTORY BENEFIT INCREASES.  The benefits

12-58    provided by this article may be increased if:

12-59                (1)  the increase is first approved by an actuary

12-60    selected by the board who, if an individual, is a Fellow of the

12-61    Society of Actuaries, a Fellow of the Conference of Actuaries in

12-62    Public Practice, or a member of the American Academy of Actuaries;

12-63                (2)  a majority of the participating members of the

12-64    fund vote for the increase by a secret ballot;

12-65                (3)  the increase does not deprive a member, without

12-66    the member's written consent, of a right to receive benefits that

12-67    have already become fully vested and matured in a member; and

12-68                (4)  the State Pension Review Board approves the

12-69    increase, which approval may not be unreasonably withheld.

 13-1          Sec. 11.  GENERAL PROVISIONS FOR CALCULATION AND PAYMENT OF

 13-2    BENEFITS.  (a)  A member, eligible survivor, or beneficiary of a

 13-3    member is not entitled to receive payments from a fund under more

 13-4    than one section of this article in a particular capacity.

 13-5    However, a person may be entitled to benefits both as a member and

 13-6    as a survivor or beneficiary of another member.

 13-7          (b)  After a member terminates active service, the amounts of

 13-8    all benefits that the member or the member's beneficiaries may

 13-9    become entitled to receive from the fund shall be computed on the

13-10    basis of the schedule of benefits in effect for the fund on the

13-11    effective date of the termination of the member's active service,

13-12    without adjustment for any subsequent increases of benefits unless

13-13    those increases are expressly made applicable to previously retired

13-14    members or their beneficiaries.

13-15          (c)  The benefits, including survivor benefits, payable based

13-16    on the service of a member who completed 30 or more years of

13-17    participation, is or would have been at least 50 years old, or

13-18    received or is receiving an on-duty disability pension under

13-19    Section 6(c) of this article shall be increased by three percent in

13-20    October of each year and, if the benefit had not previously been

13-21    subject to that adjustment, in the month of the member's 50th

13-22    birthday.

13-23          (d)  In computing a member's years of participation, time

13-24    served in the armed forces of the nation during war or national

13-25    emergency is considered continuous service.  Except for that

13-26    military service, credit for prior service shall be given only if a

13-27    member returns to active service as a firefighter before the fifth

13-28    anniversary of a previous effective date of termination.

13-29          (e)  A retired firefighter may be recalled to duty by the

13-30    chief of the fire department in case of great conflagration and

13-31    shall perform those duties the chief directs but does not have a

13-32    claim against a municipality or the fund of that municipality for

13-33    payment for the duty performed.

13-34          (f)  A member, eligible survivor, or beneficiary who is

13-35    entitled to receive a benefit payment under this article is

13-36    entitled to receive the benefit beginning on the date the member

13-37    ceases to carry out the member's regular duties as a firefighter,

13-38    notwithstanding the fact that the member may remain on the payroll

13-39    of the member's fire department or receive sick leave, vacation, or

13-40    other pay after the effective date of termination of the member's

13-41    regular duties as a firefighter.  If there is a delay in beginning

13-42    payment of benefits resulting from the requirements of Section 6(g)

13-43    of this article for disability pensions, the member or beneficiary

13-44    shall, when the disability pension is approved by the board, be

13-45    paid the full amount of the disability pension that has accrued

13-46    since the effective date of termination of the member's regular

13-47    duties as a firefighter.

13-48          (g)  A member may designate a trustee to receive the benefit

13-49    payable to any eligible survivor or beneficiary other than the

13-50    member's eligible spouse or a spouse eligible to receive a benefit

13-51    under the DROP.  Any such designation must be made on a form

13-52    approved by the board.

13-53          (h)  A benefit payable under this article to a minor may be

13-54    made only to the guardian of the estate of the minor.  If a benefit

13-55    becomes payable to any other person under a legal disability,

13-56    payment of that benefit may be made only to the conservator or the

13-57    guardian of that person's estate appointed by a court of competent

13-58    jurisdiction.  A payment made in accordance with this section on

13-59    behalf of a minor or other person under a legal disability fully

13-60    discharges the fund's obligation to that person.

13-61          (i)  Notwithstanding any other provision of this article, a

13-62    person entitled to receive benefit payments from the fund may:

13-63                (1)  make a one-time election to receive a smaller

13-64    pension or survivor benefit than is otherwise provided under this

13-65    article;

13-66                (2)  make a one-time election not to receive any future

13-67    annual increases in the pension or survivor benefits received by

13-68    the person or the person's beneficiary; or

13-69                (3)  make a one-time election not to receive a specific

 14-1    benefit enhancement.

 14-2          (j)  An election under Subsection (i) of this section must be

 14-3    made in writing and submitted to the board for approval.  On the

 14-4    date the board grants approval of an election under Subsection (i)

 14-5    of this section, the election becomes irrevocable.

 14-6          (k)  A benefit under this article may not be integrated with

 14-7    benefits payable under the federal Social Security Act.  In a

 14-8    municipality in which firefighters are eligible to enroll for or

 14-9    receive retirement benefits under the Social Security Act, benefits

14-10    that may be available to a member under the Social Security Act may

14-11    not be taken into account in determining the amount of benefits a

14-12    member may receive under this article.

14-13          (l)  If the board determines that the amount in the fund is

14-14    insufficient to pay in full any pension or disability benefits, all

14-15    pension and disability benefits made after the date of the

14-16    determination shall be reduced pro rata for the period the

14-17    insufficiency exists.

14-18          (m)  A benefit payable under this article because of the

14-19    death of a member or eligible beneficiary may not be paid to a

14-20    person convicted of causing that death but instead shall be paid as

14-21    if the convicted person predeceased the deceased member or

14-22    beneficiary.  If no beneficiary is entitled to the benefit as a

14-23    result, the benefit shall be paid to the decedent's estate.  Except

14-24    as otherwise permitted by this subsection with respect to

14-25    suspension of benefits, the board is not required to withhold

14-26    payment to a person convicted of causing the death of a member or

14-27    eligible beneficiary until the board receives actual notice of the

14-28    conviction of that person.  The board may suspend payment of a

14-29    benefit payable on the death of a member or an eligible beneficiary

14-30    on the indictment of the person who would otherwise be entitled to

14-31    the benefit, and the suspension remains in effect until the board

14-32    determines that a final disposition of the charges relating to the

14-33    cause of death has occurred.  If a benefit payment is suspended

14-34    under this subsection and the person is not convicted, the benefit

14-35    again becomes payable with interest computed at the rate earned by

14-36    the fund during the time the benefit payment was suspended.  For

14-37    purposes of this subsection, a person has been convicted of causing

14-38    the death of a member or eligible beneficiary if:

14-39                (1)  the person has pleaded guilty or nolo contendere

14-40    to, or the person has been found guilty by a court of, an offense

14-41    at the trial of which it is established that the person's

14-42    intentional or knowing act or omission caused the death of the

14-43    member or eligible beneficiary, regardless of whether sentence is

14-44    imposed or probated; and

14-45                (2)  an appeal of the conviction is not pending, and

14-46    the time provided for appeal has expired.

14-47          Sec. 12.  APPEALS OF BENEFIT DECISIONS.  (a)  A member who is

14-48    eligible for retirement for length of service or disability or who

14-49    has a claim for temporary disability, or any of the member's

14-50    beneficiaries, who is aggrieved by a decision or order of the

14-51    board, whether on the basis of rejection of a claim or of the

14-52    amount allowed, may appeal from the decision or order of the board

14-53    to a district court in the county in which the board is located by

14-54    giving written notice of the intention to appeal.  The notice must

14-55    contain a statement of the intention to appeal, together with a

14-56    brief statement of the grounds and reasons the party feels

14-57    aggrieved.  The notice must be served personally on the chair,

14-58    secretary, or treasurer of the board not later than the 20th day

14-59    after the date of the order or decision.  After service of the

14-60    notice, the party appealing shall file with the district court a

14-61    copy of the notice of intention to appeal, together with the

14-62    affidavit of the party making service showing how, when, and on

14-63    whom the notice was served.

14-64          (b)  Not later than the 30th day after the date of service of

14-65    the notice of intention to appeal on the board, the secretary or

14-66    treasurer of the board shall file with the district court a

14-67    transcript of all papers and proceedings in the case before the

14-68    board.  When the copy of the notice of intention to appeal and the

14-69    transcript have been filed with the court, the appeal is considered

 15-1    perfected, and the court shall docket the appeal, assign the appeal

 15-2    a number, fix a date for hearing the appeal, and notify both the

 15-3    appellant and the board of the date fixed for the hearing.

 15-4          (c)  At any time before issuing a decision on the appeal, the

 15-5    court may require further or additional proof or information,

 15-6    either documentary or under oath.  On issuing a decision on the

 15-7    appeal, the court shall give to each party to the appeal a copy of

 15-8    the decision and shall direct the board as to the disposition of

 15-9    the case.  The final decision or order of the district court is

15-10    appealable in the same manner as are civil cases generally.

15-11          Sec. 13.  MEMBERSHIP AND CONTRIBUTIONS.  (a)  Each person who

15-12    becomes a firefighter before age 36 becomes a member of the fund if

15-13    the person's application for membership is accepted by the board.

15-14    In accepting employment as a firefighter, and on becoming a member

15-15    of the fund, a firefighter agrees to make contributions required

15-16    under this article of members of the fund who are in active service

15-17    and is entitled to participate in the benefits of membership in the

15-18    fund as provided by this article.

15-19          (b)  The board shall establish minimum physical requirements

15-20    for membership in the fund that may not exceed the physical

15-21    requirements established by the Fire Fighters' and Police Officers'

15-22    Civil Service Commission under Section 143.022, Local Government

15-23    Code, and that must be the same for all applicants.  At the time

15-24    that physical examinations are administered on behalf of the

15-25    municipality, each applicant must be provided written notice that a

15-26    copy of the results of the examination will be forwarded to the

15-27    board to determine eligibility for membership in the fund and the

15-28    existence of any preexisting condition.  Not later than the 10th

15-29    day after the date of a physical examination performed on an

15-30    applicant for a beginning position in the fire department as

15-31    required by Section 143.022, Local Government Code, the

15-32    municipality shall provide to the board a copy of all documents

15-33    resulting from the physical examination.  The board may require

15-34    additional physical examinations if necessary to determine whether

15-35    the applicant meets the minimum physical requirements for

15-36    membership in the fund.  The fund shall pay the cost of any

15-37    additional physical examination the board requires.  Within a

15-38    reasonable time after receiving the examination reports of an

15-39    applicant, the board shall, on the basis of one or more physical

15-40    examinations, determine whether the applicant meets the minimum

15-41    physical requirements for membership in the fund.  The board shall

15-42    notify the applicant and the chief of the fire department not later

15-43    than the 10th calendar day after the date of the board's decision

15-44    on the applicant's satisfaction of the minimum physical

15-45    requirements.  If the board rejects the applicant, the applicant

15-46    may request further examination by a board of three physicians

15-47    appointed by the board at the expense of the applicant.  If a

15-48    physician board finds that an applicant meets the minimum physical

15-49    requirements for membership in the fund, the board shall accept the

15-50    applicant for membership.  If accepted by the board, the

15-51    applicant's membership in the fund is effective on being appointed

15-52    to the position of probationary firefighter.

15-53          (c)  Each member in active service shall make contributions

15-54    to the fund in an amount equal to 7.7 percent of the member's

15-55    salary at the time of the contribution.  The governing body of the

15-56    municipality shall deduct the contributions from the member's

15-57    salary and shall forward the contributions to the fund as soon as

15-58    practicable.

15-59          (d)  The municipality shall make monthly contributions to the

15-60    fund in an amount equal to the product of the contribution rate

15-61    certified by the board and the aggregate salaries paid to members

15-62    of the fund during the month for which the contribution is made.

15-63    The board shall certify the municipality's contribution rate for

15-64    each year or portion of a year based on the results of actuarial

15-65    valuations made at least every three years.  The municipality's

15-66    contribution rate shall be composed of the normal cost plus the

15-67    level percentage of salary payment required to amortize the

15-68    unfunded actuarial liability over a period of 40 years beginning on

15-69    January 1, 1983, computed on the basis of an acceptable actuarial

 16-1    reserve funding method approved by the board.  Notwithstanding any

 16-2    other provision of this article, the contributions by the

 16-3    municipality, when added to any contributions with respect to a

 16-4    qualified governmental excess benefit arrangement maintained in

 16-5    accordance with Section 14(c) of this article, may not be less than

 16-6    twice the amount paid into the fund by contributions of the

 16-7    members.

 16-8          (e)  Notwithstanding Subsection (d) of this section, if one

 16-9    or more members of the fund are appointed to positions in the fire

16-10    department, and those appointments are not made based on the

16-11    results of a competitive examination, the minimum contribution rate

16-12    required of the municipality for any year is increased by an amount

16-13    equal to the difference, if any, between:

16-14                (1)  the municipality's actuarially determined

16-15    contribution rate computed in accordance with Subsection (d) of

16-16    this section, without regard to the minimum contribution rate

16-17    specified, computed based on the actual monthly salary or

16-18    compensation for all members; and

16-19                (2)  the municipality's actuarially determined

16-20    contribution rate computed in accordance with Subsection (d) of

16-21    this section, without regard to the minimum contribution rate

16-22    specified, but for each member so appointed, computed based, for

16-23    all months of participation after the date of appointment, on the

16-24    monthly salary or compensation being paid to the person who holds

16-25    the position the member held immediately before the member was

16-26    appointed to the new position.

16-27          (f)  Money deducted from salaries or compensation as provided

16-28    by this section and the payments and contributions provided by this

16-29    section become a part of the fund of the municipality in which the

16-30    contributing member serves at the time of the contribution.  In

16-31    accordance with Section 14(c) of this article, contributions under

16-32    any qualified governmental excess benefit arrangement do not become

16-33    part of the trust fund assets of the fund.

16-34          (g)  On action of its governing body, a municipality may pick

16-35    up members' contributions prescribed under Subsection (c) of this

16-36    section for purposes of Section 414(h)(2) of the code.  A member's

16-37    salary is affected by  this subsection only as this subsection

16-38    relates to the computation of pension contributions and gross pay

16-39    for federal tax purposes.  The computation of pension benefits,

16-40    severance pay, and other benefits is not affected.

16-41          (h)  If the municipality's actuarially determined

16-42    contribution rate computed in accordance with Subsection (d) of

16-43    this section would exceed the minimum contribution rate specified,

16-44    the benefits payable under Sections 4(d), 4(e), and 7(e) of this

16-45    article may not be paid, an eligible spouse whose benefit is

16-46    reduced under Section 7(b) of this article may not be paid a

16-47    benefit if there are no other eligible survivors, and the

16-48    municipality's actuarially determined contribution rate shall be

16-49    recomputed on the basis of the assumption that those benefits are

16-50    suspended indefinitely.  If the  recomputation results in an

16-51    actuarially determined contribution rate less than the minimum

16-52    contribution rate specified, a portion of the benefits shall be

16-53    paid, as determined by the board, to the extent that, with the

16-54    payments determined, the two contribution rates are equal.  This

16-55    subsection expires July 31, 1999, unless on that date the

16-56    municipality's actuarially determined contribution rate computed in

16-57    accordance with Subsection (d) of this section  would exceed the

16-58    minimum contribution rate specified.

16-59          Sec. 14.  INTERNAL REVENUE CODE LIMITATIONS.  (a)

16-60    Notwithstanding any other provision of this article, a member may

16-61    not accrue a benefit or allowance under this article in excess of

16-62    an amount that, when added to all other pension benefits received

16-63    under plans of the municipality that are qualified under Section

16-64    401 of the code, results in an annual benefit in excess of the

16-65    applicable limits provided by Section 415 of the code.  That

16-66    accrual limitation applies only as long as satisfaction of Section

16-67    415 of the code is necessary to maintain the tax-qualified status

16-68    of the fund under Section 401 of the code.  Any benefit accruals

16-69    limited under this subsection must be certified by a qualified

 17-1    actuary selected by the board.

 17-2          (b)  Notwithstanding any other provision of this article, the

 17-3    fund shall be administered in a manner that complies with the code,

 17-4    United States Treasury Department regulations, and Internal Revenue

 17-5    Service rulings and notices applicable to public retirement

 17-6    systems.  The board shall adopt rules and amend or repeal

 17-7    conflicting rules to ensure compliance with this subsection.

 17-8          (c)  The board may establish and maintain a qualified

 17-9    governmental excess benefit arrangement, in accordance with Section

17-10    415(m) of the code, solely for the purpose of providing to members

17-11    the amount of each member's pension benefit otherwise payable under

17-12    the fund that exceeds the limitations on benefits imposed by

17-13    Section 415 of the code.  The board may maintain a separate trust

17-14    solely for providing benefits under the arrangement or may maintain

17-15    the arrangement on an unfunded basis through municipal

17-16    contributions as benefits become payable.   Benefits provided by

17-17    that arrangement may not be paid from the trust fund assets that

17-18    are available for payment of any other benefit under this article.

17-19    Benefits under any qualified governmental excess benefit

17-20    arrangement shall be paid or funded entirely through municipal

17-21    contributions in an amount approved by the board.  An election may

17-22    not be provided at any time to a member, directly or indirectly, to

17-23    defer compensation under the arrangement.  The operation and

17-24    administration of any qualified governmental excess benefit

17-25    arrangement is the responsibility of the board, which has the same

17-26    powers concerning the arrangement as are provided to the board

17-27    under this article concerning the fund.

17-28          Sec. 15.  EXEMPTION OF BENEFITS FROM JUDICIAL PROCESS.  The

17-29    fund may not, either before or after its order of disbursement by

17-30    the board to a member, a spouse eligible to receive a benefit under

17-31    the DROP, an eligible spouse, the guardian of an eligible child, or

17-32    an eligible parent, be held, seized, subjected to, or levied on by

17-33    virtue of any execution, attachment, garnishment, injunction, or

17-34    other writ, order, or decree, or any process issued out of, or by,

17-35    any court for the payment or satisfaction of any debt, damage,

17-36    claim, demand, or judgment against a member, a spouse eligible to

17-37    receive a benefit under the DROP, an eligible spouse, the guardian

17-38    of an eligible child, or an eligible parent.  The fund or any claim

17-39    against the fund may not be directly or indirectly assigned or

17-40    transferred, and any attempt to assign or transfer the fund or a

17-41    claim is void.  The fund shall be sacredly held, kept, and

17-42    disbursed only for the purposes provided by this article.

17-43          Sec. 16.  SERVICE CREDIT FOR MEMBERS PREVIOUSLY MEMBERS OF

17-44    SIMILAR FUNDS.  (a)  A person who becomes a firefighter in a

17-45    municipality to which this article applies may receive service

17-46    credit for prior employment with the fully paid fire department of

17-47    another municipality in this state with a similar fund benefiting

17-48    only firefighters of that municipality to which the firefighter

17-49    contributed if:

17-50                (1)  the firefighter is under 36 years of age at the

17-51    time of applying to the fund;

17-52                (2)  the firefighter passes a physical examination

17-53    taken at the firefighter's expense and performed by a physician

17-54    selected by the board;

17-55                (3)  the firefighter pays into the fund an amount equal

17-56    to the total contribution the firefighter would have made had the

17-57    firefighter been employed by the municipality, at the

17-58    municipality's pay scale, instead of the municipality by which the

17-59    firefighter was previously employed, plus six percent interest,

17-60    compounded annually;

17-61                (4)  the firefighter applies for that credit not later

17-62    than the 60th day after the date on which membership begins; and

17-63                (5)  the firefighter has moved directly into employment

17-64    at the fire department from the fire department for which the prior

17-65    service credit is sought, without any intervening employment or

17-66    extended interruption.

17-67          (b)  A member may receive credit for prior service in more

17-68    than one fire department under Subsection (a) of this section only

17-69    if there have not been interruptions in employment and each

 18-1    preceding service meets the other requirements of Subsection (a) of

 18-2    this section.

 18-3          (c)  The municipality to which the member has transferred

 18-4    shall pay an amount equal to the amount it would have paid had the

 18-5    member been employed by that municipality instead of the

 18-6    municipality by which the firefighter was previously employed,

 18-7    based on the municipality's pay scale, plus six percent interest,

 18-8    compounded annually.  Both the municipality's contribution and the

 18-9    member's contribution must be paid promptly on approval of the

18-10    member's application for service credit.

18-11          (d)  A firefighter may not participate under this section in

18-12    the fund of the municipality to which the firefighter has

18-13    transferred until the firefighter has fully complied with this

18-14    article and the municipality  has complied with Subsection (c) of

18-15    this section.

18-16          (e)  A firefighter eligible for prior service credit may

18-17    participate in the fund, subject to the other requirements of this

18-18    article, without obtaining that credit, and if the firefighter does

18-19    not comply with the provisions and time limits of this section, the

18-20    firefighter is ineligible for the credit.

18-21          Sec. 17.  CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS OR

18-22    BENEFICIARIES.  (a)  Information contained in records that are in

18-23    the custody of a fund established under this article concerning an

18-24    individual member, retiree, or beneficiary is confidential under

18-25    Chapter 552, Government Code, and may not be disclosed in a form

18-26    identifiable with a specific individual unless:

18-27                (1)  the information is disclosed to:

18-28                      (A)  the individual;

18-29                      (B)  the individual's attorney, guardian,

18-30    executor, administrator, or conservator, or other person who the

18-31    board determines is acting in the interest of the individual or the

18-32    individual's estate;

18-33                      (C)  a spouse or former spouse of the individual

18-34    if the board determines that the information is relevant to the

18-35    spouse's or former spouse's interest in member accounts, benefits,

18-36    or other amounts payable by the fund; or

18-37                      (D)  a person with written authorization from the

18-38    individual to receive the information; or

18-39                (2)  the information is disclosed under an

18-40    authorization of the board that specifies the reason for the

18-41    disclosure.

18-42          (b)  This section does not prevent the disclosure of the

18-43    status or identity of an individual as a member, former member,

18-44    retiree, deceased member, or beneficiary of the fund.

18-45          (c)  A determination and disclosure under Subsection (a)(2)

18-46    of this section may be made without notice to the individual

18-47    member, retiree, or beneficiary.

18-48          SECTION 2.  (a)  Article 6243e.2(1), Revised Statutes, as

18-49    added by this Act, restates and amends Chapter 432, Acts of the

18-50    64th Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil

18-51    Statutes), as that law existed before repeal by this Act, and

18-52    continues in effect each firemen's relief and retirement fund

18-53    established under that law.

18-54          (b)  Notwithstanding Article 6243e.2(1), Revised Statutes, as

18-55    added by this Act, a member of the board of trustees of a

18-56    firefighters' relief and retirement fund in a municipality to which

18-57    that article applies serving on October 31, 1997, continues to

18-58    serve until the expiration of the term for which the member was

18-59    elected or appointed under Chapter 432, Acts of the 64th

18-60    Legislature, 1975 (Article 6243e.2, Vernon's Texas Civil Statutes),

18-61    as that law existed before repeal by this Act, and that law is

18-62    continued in effect for that purpose.

18-63          SECTION 3.  Chapter 432, Acts of the 64th Legislature, 1975

18-64    (Article 6243e.2, Vernon's Texas Civil Statutes), is repealed.

18-65          SECTION 4.  This Act takes effect November 1, 1997.

18-66          SECTION 5.  The importance of this legislation and the

18-67    crowded condition of the calendars in both houses create an

18-68    emergency and an imperative public necessity that the

18-69    constitutional rule requiring bills to be read on three several

 19-1    days in each house be suspended, and this rule is hereby suspended.

 19-2                                 * * * * *