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 * * * * *