1-1     By:  Haywood                                           S.B. No. 631

 1-2           (In the Senate - Filed February 17, 1997; February 20, 1997,

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

 1-4     April 4, 1997, reported favorably by the following vote:  Yeas 7,

 1-5     Nays 4; April 4, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to the compensation of retired state employees who return

 1-9     to work for, or contract with, the state.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Subchapter B, Chapter 659, Government Code, is

1-12     amended by adding Section 659.0115 to read as follows:

1-13           Sec. 659.0115.  SALARIES OF RETIRED STATE EMPLOYEES WHO

1-14     RESUME STATE EMPLOYMENT.  (a)  A retiree of the employee class of

1-15     membership of the Employees Retirement System of Texas who is

1-16     reemployed by the state may not be paid a salary at an annualized

1-17     rate:

1-18                 (1)  that exceeds the lesser of:

1-19                       (A)  50 percent of the rate of compensation the

1-20     retiree received from the state during the last 12 months of

1-21     service before retirement; or

1-22                       (B)  50 percent of the highest rate of

1-23     compensation for a 12-month period at which the retiree was paid by

1-24     the state before retirement; or

1-25                 (2)  that, when added to the amount of the retiree's

1-26     annual retirement benefit, exceeds the salary the retiree received

1-27     from the state during the last 12 months of service before

1-28     retirement.

1-29           (b)  A retiree of the Teacher Retirement System of Texas, the

1-30     majority of whose service was credited in that system in a position

1-31     as an officer or employee of a state agency, who is reemployed by

1-32     the state is subject to the salary restriction described by

1-33     Subsection (a).

1-34           (c)  In this section, "state" and "state agency" include a

1-35     "public senior college or university," as that term is defined by

1-36     Section 61.003, Education Code.

1-37           SECTION 2.  Chapter 2252, Government Code, is amended by

1-38     adding Subchapter Z to read as follows:

1-39                   SUBCHAPTER Z.  MISCELLANEOUS PROVISIONS

1-40           Sec. 2252.901.  CONTRACTS WITH RETIRED STATE EMPLOYEES.

1-41     (a)  A state agency that contracts with a retiree of the employee

1-42     class of membership of the Employees Retirement System of Texas or

1-43     a retiree of the Teacher Retirement System of Texas, the majority

1-44     of whose service was credited in that system in a position as an

1-45     officer or employee of a state agency, may not pay for personal

1-46     services under the contract that are substantially similar to the

1-47     services the retiree performed as a state officer or employee an

1-48     amount at an annualized rate:

1-49                 (1)  that exceeds the lesser of:

1-50                       (A)  50 percent of the rate of compensation the

1-51     retiree received from the state during the last 12 months of

1-52     service before retirement; or

1-53                       (B)  50 percent of the highest rate of

1-54     compensation for a 12-month period at which the retiree was paid by

1-55     the state before retirement; or

1-56                 (2)  that, when added to the amount of the retiree's

1-57     annual retirement benefit, exceeds the salary the retiree received

1-58     from the state during the last 12 months of service before

1-59     retirement.

1-60           (b)  In this section, "state" and "state agency" include a

1-61     "public senior college or university," as that term is defined by

1-62     Section 61.003, Education Code.

1-63           SECTION 3.  (a)  Section 659.0115, Government Code, as added

1-64     by this Act, applies only to state service performed on or after

 2-1     the effective date of this Act.

 2-2           (b)  Section 2252.901, Government Code, as added by this Act,

 2-3     applies only to a contract entered into on or after the effective

 2-4     date of this Act.

 2-5           SECTION 4.  (a)  Except as provided by Subsection (b) of this

 2-6     section, this Act takes effect September 1, 1997.

 2-7           (b)  If this Act receives the vote required by Section 39,

 2-8     Article III, Texas Constitution, for accelerated effect, this Act

 2-9     takes effect on the first day of the month after the first month in

2-10     which it could take effect.

2-11           SECTION 5.  The importance of this legislation and the

2-12     crowded condition of the calendars in both houses create an

2-13     emergency and an imperative public necessity that the

2-14     constitutional rule requiring bills to be read on three several

2-15     days in each house be suspended, and this rule is hereby suspended,

2-16     and that this Act take effect and be in force according to its

2-17     terms, and it is so enacted.

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