1-1     By:  Harris                                             S.B. No. 14

 1-2           (In the Senate - Filed April 14, 1997; April 16, 1997, read

 1-3     first time and referred to Committee on State Affairs;

 1-4     April 30, 1997, reported favorably, as amended, by the following

 1-5     vote:  Yeas 10, Nays 0; April 30, 1997, sent to printer.)

 1-6     COMMITTEE AMENDMENT NO. 1                              By:  Lindsay

 1-7     Amend S.B. No. 14 in SECTION 1 of the bill, by striking Section

 1-8     1(a)(2) of proposed Article 3.50-2A Subchapter E, Chapter 3,

 1-9     Insurance Code, (page 1, lines 30 through 37, introduced version),

1-10     and inserting the following in lieu thereof:

1-11                 (2)  seven public members appointed by the governor

1-12     with the advice and consent of the senate.

1-13     COMMITTEE AMENDMENT NO. 2                              By:  Lindsay

1-14     Amend S.B. No. 14 in SECTION 1 of the bill, by amending Section

1-15     3(d) of proposed Article 3.50-2A Subchapter E, Chapter 3, Insurance

1-16     Code, (page 2, lines 5 and 6, introduced version), between "is" and

1-17     "subject" by striking the word "not".

1-18                            A BILL TO BE ENTITLED

1-19                                   AN ACT

1-20     relating to long-term care for public employees.

1-21           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-22           SECTION 1.  Subchapter E, Chapter 3, Insurance Code, is

1-23     amended by adding Article 3.50-2A to read as follows:

1-24           Art. 3.50-2A.  LONG-TERM CARE FOR PUBLIC EMPLOYEES

1-25           Sec. 1.  LONG-TERM CARE BOARD.  (a)  The Public Employees

1-26     Long-Term Care Board is established.  The board consists of:

1-27                 (1)  the executive directors of the Teacher Retirement

1-28     System of Texas, the Employees Retirement System of Texas, the

1-29     Texas County and District Retirement System, and the Texas

1-30     Municipal Retirement System; and

1-31                 (2)  seven public members:

1-32                       (A)  two of whom are appointed by the governor;

1-33                       (B)  two of whom are appointed by the lieutenant

1-34     governor;

1-35                       (C)  two of whom are appointed by the speaker of

1-36     the house of representatives; and

1-37                       (D)  one of whom is appointed by the chief

1-38     justice of the Texas Supreme Court.

1-39           (b)  The executive directors serve as members of the board by

1-40     virtue of their position as executive directors, and the public

1-41     members serve two-year terms expiring February 1 of each

1-42     odd-numbered year.

1-43           (c)  Members of the board annually shall select their

1-44     presiding officers.  The board shall meet at the call of the

1-45     presiding officer or as otherwise determined by board policy.

1-46           (d)  A member of the board is not entitled to compensation

1-47     for service on the board but is entitled to reimbursement of travel

1-48     expenses incurred in performing the business of the board, as

1-49     provided in the General Appropriations Act.

1-50           Sec. 2.  EMPLOYEES AND CONSULTANTS.  The board may employ and

1-51     contract with persons to assist it in performing its powers and

1-52     duties under this article and may determine their duties and

1-53     compensation.

1-54           Sec. 3.  LONG-TERM CARE COVERAGE.  (a)  The board shall

1-55     contract with carriers offering long-term care insurance plans and

1-56     enter into health care service plan contracts covering long-term

1-57     care.

1-58           (b)  The board shall award contracts to carriers who are

1-59     qualified to provide long-term care benefits and may develop and

1-60     administer self-funded long-term care insurance plans.  The board

1-61     may offer one or more long-term care insurance plans or health care

1-62     service plan contracts covering long-term care and may offer

1-63     service or indemnity plans.

1-64           (c)  The long-term care insurance plans and health care

 2-1     service plan contracts covering long-term care shall include home,

 2-2     community, and institutional care.

 2-3           (d)  A contract entered into under this section is not

 2-4     subject to competitive bidding.

 2-5           (e)  The long-term care insurance plans and health care

 2-6     service plan contracts covering long-term care shall be made

 2-7     available periodically during open enrollment periods determined by

 2-8     the board.

 2-9           Sec. 4.  ENROLLMENT.  (a)  The board shall establish

2-10     eligibility criteria for enrollment, establish appropriate

2-11     underwriting criteria for potential enrollees, define the scope of

2-12     covered benefits, define criteria to receive benefits, and set any

2-13     other standards the board determines are needed.

2-14           (b)  The classes of persons who are eligible to enroll in the

2-15     long-term care program provided by this article are:

2-16                 (1)  members and annuitants of the Employees Retirement

2-17     System of Texas, their spouses, children, and parents, and their

2-18     spouses' parents;

2-19                 (2)  members and annuitants of the Teacher Retirement

2-20     System of Texas, their spouses, children, and parents, and their

2-21     spouses' parents;

2-22                 (3)  members and annuitants of the optional retirement

2-23     program established under Chapter 830, Government Code, their

2-24     spouses, children, and parents, and their spouses' parents;

2-25                 (4)  members and annuitants of the Judicial Retirement

2-26     System of Texas Plan One, their spouses, children, and parents, and

2-27     their spouses' parents;

2-28                 (5)  members and annuitants of the Judicial Retirement

2-29     System of Texas Plan Two, their spouses, children, and parents, and

2-30     their spouses' parents;

2-31                 (6)  members and annuitants of the Texas County and

2-32     District Retirement System, their spouses, children, and parents,

2-33     and their spouses' parents;

2-34                 (7)  members and annuitants of the Texas Municipal

2-35     Retirement System, their spouses, children, and parents, and their

2-36     spouses' parents; and

2-37                 (8)  members and annuitants, and the spouses, children,

2-38     parents, and spouses' parents of members and annuitants, of any

2-39     other retirement system administered by the state or a political

2-40     subdivision of the state, the governing body of which has

2-41     contracted with the board to provide coverage under this article.

2-42           (c)  A potential enrollee  must meet the eligibility and

2-43     underwriting criteria established by the board.

2-44           (d)  The full cost of enrollment in a long-term care

2-45     insurance plan or in a health service plan contract covering

2-46     long-term care shall be paid by the enrollees.

2-47           Sec. 5.  PUBLIC EMPLOYEES LONG-TERM CARE FUND.  (a)  The

2-48     public employees long-term care fund is established as a trust fund

2-49     outside the state treasury.

2-50           (b)  The comptroller is custodian of the fund and shall draw

2-51     warrants on the fund at the direction of the board or the board's

2-52     designee.

2-53           (c)  The board may set the premiums for any self-funded

2-54     long-term care plan and assess charges against carriers and the

2-55     premiums of enrollees to recover the administrative costs of the

2-56     public employees long-term care program.

2-57           (d)  Premiums paid by enrollees, amounts recovered under

2-58     contracts for the implementation of the public employees long-term

2-59     care program established under this article, and investment and

2-60     depository income of the fund shall be credited to the fund.  The

2-61     legislature may make appropriations to the fund.

2-62           (e)  Money in the fund may be used only for the purpose of

2-63     administering any self-funded long-term care plan developed by the

2-64     board and for paying the administrative expenses of the long-term

2-65     care program.  The fund is not subject to legislative

2-66     appropriation, except that the legislature in the General

2-67     Appropriations Act may limit the amount in the fund that may be

2-68     used to pay administrative expenses.

2-69           Sec. 6.  INVESTMENT OF FUND.  (a)  As trustees  and

 3-1     fiduciaries of the public employees long-term care fund, the board

 3-2     may invest assets of the fund in any investment in which an asset

 3-3     of a retirement system of which the executive director is a member

 3-4     of the board  may be invested.  The board is subject to the

 3-5     investment standard provided by Section 67(a)(3), Article XVI,

 3-6     Texas Constitution.

 3-7           (b)  The board may employ investment staff or contract with

 3-8     independent investment managers to manage the investments of the

 3-9     public employees long-term care fund.

3-10           Sec. 7.  IMPLEMENTATION.  The board shall implement the

3-11     long-term care program developed under this article when the board

3-12     determines that it is feasible to do so.

3-13           SECTION 2.  If the Public Employees Long-Term Care Board does

3-14     not implement the long-term care program under Article 3.50-2A,

3-15     Insurance Code, as added by this Act, before January 1, 1999, the

3-16     board shall prepare and file a report with the governor, the

3-17     lieutenant governor, and the speaker of the house of

3-18     representatives before that date making its recommendations for the

3-19     resources necessary to implement the program.

3-20           SECTION 3.  This Act takes effect September 1, 1997.

3-21           SECTION 4.  The importance of this legislation and the

3-22     crowded condition of the calendars in both houses create an

3-23     emergency and an imperative public necessity that the

3-24     constitutional rule requiring bills to be read on three several

3-25     days in each house be suspended, and this rule is hereby suspended.

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