By: Armbrister, Barrientos S.B. No. 1102
A BILL TO BE ENTITLED
AN ACT
1-1 relating to systems and programs administered by the Employees
1-2 Retirement System of Texas.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (g), Section 805.002, Government Code,
1-5 is amended to read as follows:
1-6 (g) To be eligible to make a transfer pursuant to Subsection
1-7 (d), a person must be the same beneficiary under both retirement
1-8 systems, except that if the only service credited in the system
1-9 from which service is being transferred is reinstated service and
1-10 no beneficiary designation was made at or after the time of
1-11 reinstatement, the beneficiary in the receiving system may make the
1-12 election.
1-13 SECTION 2. Subdivisions (8) and (9), Section 811.001,
1-14 Government Code, are amended to read as follows:
1-15 (8) "Custodial officer" means a member of the
1-16 retirement system who is employed by the institutional division or
1-17 the state jail division of the Texas Department of Criminal Justice
1-18 and certified by the department as having a normal job assignment
1-19 that requires frequent or infrequent regularly planned contact
1-20 with, and in close proximity to, inmates of the institutional
1-21 division or inmates or defendants confined in the state jail
1-22 division without the protection of bars, doors, security screens,
1-23 or similar devices and includes assignments normally involving
2-1 supervision or the potential for supervision of inmates in inmate
2-2 housing areas, educational or recreational facilities, industrial
2-3 shops, kitchens, laundries, medical areas, agricultural shops or
2-4 fields, or in other areas on or away from property of the
2-5 institutional division or the state jail division. The term
2-6 includes a member who transferred from the Texas Department of
2-7 Criminal Justice to the managed health care unit of The University
2-8 of Texas Medical Branch on September 1, 1993, elected at that time
2-9 to retain membership in the retirement system, and is certified by
2-10 the managed health care unit as having a normal job assignment
2-11 described by this subdivision.
2-12 (9) "Law enforcement officer" means a member of the
2-13 retirement system who has been commissioned as a law enforcement
2-14 officer by the Department of Public Safety, the Texas Alcoholic
2-15 Beverage Commission, [the State Purchasing and General Services
2-16 Commission, Capitol Area Security Force,] the State Board of
2-17 Pharmacy, or the Parks and Wildlife Department and who is
2-18 recognized as a commissioned law enforcement officer by the
2-19 Commission on Law Enforcement Officer Standards and Education.
2-20 SECTION 3. Section 813.104, Government Code, is amended to
2-21 read as follows:
2-22 Sec. 813.104. ALTERNATIVE PAYMENTS TO ESTABLISH OR
2-23 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
2-24 rules to provide procedures for making installment payments to
2-25 establish or reestablish credit in the retirement system as
3-1 alternatives to lump-sum payments otherwise authorized or required
3-2 by this subtitle. The methods may include payment by payroll
3-3 deduction. [A member who is otherwise eligible may establish or
3-4 reestablish service creditable in the retirement system by making
3-5 payments as provided by this section in lieu of lump-sum payments
3-6 otherwise authorized or required by this subtitle.]
3-7 (b) [A payment authorized by this section consists of the
3-8 contribution required to establish or reestablish at least one year
3-9 of service credit, including any required interest and membership
3-10 fees, except that a person's last in a series of payments under
3-11 this section may be for a period of remaining service that is less
3-12 than one year.]
3-13 [(c) The retirement system shall grant the applicable amount
3-14 of service credit after each payment is made under this section.]
3-15 [(d)] Except as provided by Subsection (c) [(e)], payments
3-16 may not be made under a rule adopted under this section:
3-17 (1) to establish or reestablish service credit of a
3-18 person who has retired or died; or
3-19 (2) to establish current service under Section
3-20 813.201.
3-21 (c) Under a rule adopted under this section, the [(e) The]
3-22 designated beneficiary of a deceased member or, if none exists, the
3-23 personal representative of the decedent's estate may establish or
3-24 reestablish service for which the member was eligible at the time
3-25 of death if the establishment of the service would result in the
4-1 payment of a death benefit annuity or an increase in the amount of
4-2 a death benefit annuity.
4-3 (d) [(f)] The payment for the establishment or
4-4 reestablishment of service under Subsection (c) [(e)] must be made
4-5 in a lump sum and completed before the first payment of a death
4-6 benefit annuity, but not later than the 60th day after the date the
4-7 retirement system receives notice of the death.
4-8 [(g) The retirement system may adopt rules to administer
4-9 this section.]
4-10 SECTION 4. Section 813.106, Government Code, is amended to
4-11 read as follows:
4-12 Sec. 813.106. SERVICE NOT PREVIOUSLY ESTABLISHED. The state
4-13 shall make contributions for service not previously established
4-14 that is established under Section 813.104 [or 813.105] in the
4-15 amount provided by Section 813.202(c) [813.202(e)] for membership
4-16 service or the amount provided by Section 813.302(d) for military
4-17 service, as applicable. The state contributions will be made at
4-18 the time the service credit is granted.
4-19 SECTION 5. Section 813.202, Government Code, is amended to
4-20 read as follows:
4-21 Sec. 813.202. MEMBERSHIP SERVICE NOT PREVIOUSLY ESTABLISHED.
4-22 (a) Except as provided by Section 813.402 [and Subsection (b)],
4-23 any member may establish service credit in the retirement system
4-24 for membership service not previously established.
4-25 (b) A [Membership service not previously credited because of
5-1 a waiting period required before September 1, 1958, may be
5-2 established only by a contributing member.]
5-3 [(c) Except as provided by Subsection (d), a] member may
5-4 establish credit under this section by depositing with the
5-5 retirement system in a lump sum a contribution computed as provided
5-6 by Section 813.404 or 813.505, plus all membership fees due, plus
5-7 interest computed on the basis of the state fiscal year at an
5-8 annual rate of 10 percent from the date the service was performed
5-9 to the date of deposit.
5-10 (c) [(d) A member claiming credit for service not previously
5-11 creditable because of a waiting period required before September 1,
5-12 1958, is exempt from the payment of interest on the required
5-13 contribution if the member establishes the credit before the first
5-14 anniversary of the person's becoming a member of the retirement
5-15 system.]
5-16 [(e)] The state shall contribute for service established
5-17 under this section an amount in the same ratio to the member's
5-18 contribution for the service as the state's contribution bears to
5-19 the contribution for current service required of a member of the
5-20 employee class at the time the service is established under this
5-21 section. The state's contribution must be paid from the fund or
5-22 account from which the member receives compensation at the time the
5-23 service is established or, if the member does not hold a position
5-24 at the time the service is established, from the fund or account
5-25 from which the member received compensation when the member most
6-1 recently held a position.
6-2 SECTION 6. Subsection (b), Section 813.301, Government Code,
6-3 is amended to read as follows:
6-4 (b) A member may [not] establish one month of service credit
6-5 for each month or fraction of a month of duty, but not more than 60
6-6 months of service credit in the retirement system for military
6-7 service.
6-8 SECTION 7. Section 813.402, Government Code, is amended to
6-9 read as follows:
6-10 Sec. 813.402. CREDIT FOR YEAR IN WHICH ELIGIBLE FOR OFFICE.
6-11 (a) A [contributing] member may establish service credit in the
6-12 elected class for any calendar year during any part of which:
6-13 (1) the member held an office included in that class;
6-14 or
6-15 (2) the member was eligible to take the oath for an
6-16 office included in that class.
6-17 (b) A [contributing] member may establish credit under this
6-18 section by depositing with the retirement system in a lump sum a
6-19 contribution computed as provided by Section 813.404, plus all
6-20 membership fees due, plus interest computed at an annual rate of 10
6-21 percent from the fiscal year in which the service was performed to
6-22 the date of deposit.
6-23 SECTION 8. Section 813.504, Government Code, is amended to
6-24 read as follows:
6-25 Sec. 813.504. ELIGIBILITY FOR SERVICE CREDIT PREVIOUSLY
7-1 CANCELED. (a) A member of the employee class may reestablish
7-2 service credit previously canceled in the retirement system if at
7-3 least six months have elapsed since the end of the month in which
7-4 the cancellation became effective and the member[, after
7-5 cancellation of the credit,] holds a position [for six months] that
7-6 is included in the employee class.
7-7 (b) A former member of the employee class who does not
7-8 receive a disability retirement annuity from the retirement system
7-9 but who presents evidence satisfactory to the retirement system
7-10 that the person is disabled and cannot resume state employment may
7-11 reestablish service credit previously canceled in the retirement
7-12 system.
7-13 SECTION 9. Subsections (a) and (c), Section 813.506,
7-14 Government Code, are amended to read as follows:
7-15 (a) The Texas Department of Criminal Justice and the managed
7-16 health care unit of The University of Texas Medical Branch by rule
7-17 shall adopt standards for determining eligibility for service
7-18 credit as a custodial officer, based on the need to encourage early
7-19 retirement of persons whose duties are hazardous and require them
7-20 to have routine contact with inmates of or defendants confined in
7-21 the state jail division of the Texas Department of Criminal Justice
7-22 on a regular basis.
7-23 (c) The Texas Department of Criminal Justice or the managed
7-24 health care unit of The University of Texas Medical Branch, as
7-25 applicable, shall determine a person's eligibility to receive
8-1 credit as a custodial officer. A determination of the department
8-2 or unit may not be appealed by an employee but is subject to change
8-3 by the retirement system.
8-4 SECTION 10. Subsection (a), Section 813.509, Government
8-5 Code, is amended to read as follows:
8-6 (a) A member who holds a position included in the employee
8-7 class of membership during the month that includes the effective
8-8 date of the member's retirement and who retires based on service or
8-9 a disability is entitled to service credit in the retirement system
8-10 for the member's sick leave that has accumulated and is unused on
8-11 the last day of employment. Sick leave is creditable in the
8-12 retirement system at the rate of one month of service credit for
8-13 each 20 days, or 160 hours, of accumulated sick leave and one month
8-14 for each fraction of days or hours remaining after division of the
8-15 total hours of accumulated sick leave by 160. [An increment of
8-16 less than 20 days is not creditable.]
8-17 SECTION 11. Subchapter F, Chapter 813, Government Code, is
8-18 amended by adding Section 813.511 to read as follows:
8-19 Sec. 813.511. SERVICE CREDIT FOR CERTAIN GOVERNMENTAL
8-20 SERVICE. (a) A contributing member of the employee class may
8-21 establish not more than 60 months of equivalent membership service
8-22 credit in that class for service that was performed as an elected
8-23 officeholder from this state and that was previously established
8-24 but not currently credited in a retirement system that is a
8-25 qualified plan under Section 401(a) of the Internal Revenue Code of
9-1 1986 (26 U.S.C. Section 401(a)) and that is administered by the
9-2 federal government.
9-3 (b) An eligible member may establish credit under this
9-4 section by depositing with the retirement system:
9-5 (1) a contribution based on the member's compensation
9-6 for the first full month after August 31, 1997, and computed for
9-7 the number of months for which credit is sought at the combined
9-8 rates required during the period of the service for the state and
9-9 employee members of the retirement system for new service;
9-10 (2) interest computed on the basis of the state fiscal
9-11 year at an annual rate of 10 percent from the date the service was
9-12 performed to the date of deposit; and
9-13 (3) any membership fees required of members of the
9-14 retirement system during the period of service.
9-15 (c) The retirement system shall deposit the compensation
9-16 contribution in the member's individual account in the employees
9-17 saving account, interest in the state accumulation account, and
9-18 membership fees in the expense account.
9-19 (d) The retirement system shall determine the amount to be
9-20 deposited in each case and may not grant service credit under this
9-21 section until the member provides proof of eligibility for the
9-22 credit that is satisfactory to the retirement system.
9-23 (e) If service for which credit is established under this
9-24 section is subsequently credited in another qualified plan, service
9-25 credited under this section may not be used in determining benefits
10-1 under this subtitle.
10-2 SECTION 12. Subsection (a), Section 814.005, Government
10-3 Code, is amended to read as follows:
10-4 (a) A person may, on a form prescribed by and filed with the
10-5 retirement system, waive all or a portion of any benefits from the
10-6 retirement system to which the person is entitled. The retirement
10-7 system also shall give effect as a waiver to a full or partial
10-8 disclaimer executed in accordance with Section 37A, Texas Probate
10-9 Code, unless the benefit to be disclaimed is a lifetime annuity. A
10-10 person may revoke a waiver of benefits in the same manner as the
10-11 original waiver was made, unless the original waiver by its terms
10-12 was made irrevocable.
10-13 SECTION 13. Section 814.104, Government Code, is amended to
10-14 read as follows:
10-15 Sec. 814.104. ELIGIBILITY OF MEMBER FOR SERVICE RETIREMENT.
10-16 (a) Except as provided by Section 814.102 or by rule adopted under
10-17 Section 813.304(d) or 803.202(2), a member who has service credit
10-18 in the retirement system is eligible to retire and receive a
10-19 service retirement annuity, if the member:
10-20 (1) is at least 60 years old and has 5 years of
10-21 service credit in the employee class; or
10-22 (2) is at least 50 but less than 60 years old and the
10-23 sum of the member's age and amount of service credit in the
10-24 retirement system, including months of age and credit, equals the
10-25 number 80 [is at least 55 years old and has 25 years of service
11-1 credit in the retirement system; or]
11-2 [(3) is at least 50 years old and has 30 years of
11-3 service credit in the retirement system].
11-4 (b) A member who is at least 55 years old and who has at
11-5 least 10 years of service credit as a commissioned peace officer
11-6 engaged in criminal law enforcement activities of the Department of
11-7 Public Safety, the Texas Alcoholic Beverage Commission, [the State
11-8 Purchasing and General Services Commission Capitol Area Security
11-9 Force,] the State Board of Pharmacy, or the Parks and Wildlife
11-10 Department, as an employee of the Railroad Commission of Texas who
11-11 is licensed by the Commission on Law Enforcement Officer Standards
11-12 and Education and has served at least five years as an investigator
11-13 for the oil field theft detection division, or as a custodial
11-14 officer, is eligible to retire and receive a service retirement
11-15 annuity.
11-16 SECTION 14. Section 814.105, Government Code, is amended by
11-17 adding Subsection (c) to read as follows:
11-18 (c) The legislature determines that the percentage used to
11-19 compute benefits under this section should be increased permanently
11-20 when it is actuarially sound to do so. The board of trustees may
11-21 increase the percentage to a rate that does not exceed 2.25 percent
11-22 for each year of service credit in the employee class of membership
11-23 if the actuary certifies that the action complies with Section
11-24 811.006. The board shall notify the governor, lieutenant governor,
11-25 and speaker of the house of representatives before adopting a rate
12-1 under this subsection.
12-2 SECTION 15. Subsection (a), Section 814.1081, Government
12-3 Code, is amended to read as follows:
12-4 (a) A person who retired and selected an optional service
12-5 retirement annuity approved by the board of trustees or an optional
12-6 service retirement annuity described by Section 814.108(c)(1) or
12-7 (c)(2)[, and who designated a person as beneficiary who was not at
12-8 the time of designation and is not currently the retiree's spouse
12-9 or child] may change the optional annuity selection to the
12-10 selection of a standard service retirement annuity by filing with
12-11 the retirement system a request to change the annuity selection, if
12-12 the retiree designated a person as beneficiary who:
12-13 (1) was not at the time of designation and is not
12-14 currently the retiree's spouse or child; or
12-15 (2) has executed since the designation a transfer and
12-16 release, approved by a court of competent jurisdiction pursuant to
12-17 a divorce decree, of the beneficiary's interest in the annuity and
12-18 is not currently the retiree's spouse or child.
12-19 SECTION 16. Subsection (d), Section 815.003, Government
12-20 Code, is amended to read as follows:
12-21 (d) The board shall hold elections for the members and
12-22 retirees to nominate and elect a trustee before August 31 [1] of
12-23 each odd-numbered year. The board shall make ballots available to
12-24 members of the retirement system and retirees and all votes must be
12-25 cast on those ballots.
13-1 SECTION 17. Subchapter B, Chapter 815, Government Code, is
13-2 amended by adding Section 815.106 to read as follows:
13-3 Sec. 815.106. INFORMATION TO LEGISLATURE. (a) The
13-4 retirement system may not use any money under its control to
13-5 influence the outcome of an election or to support the passage or
13-6 defeat of legislation.
13-7 (b) This section does not prohibit the board of trustees, as
13-8 fiduciaries of the trust fund and as trustees of other programs
13-9 administered by the board, or the officers or employees of the
13-10 retirement system, as designees of the board, from making
13-11 recommendations to the legislature concerning the actuarial
13-12 soundness of a retirement system administered by the board, the
13-13 fiscal or legal implications of proposed legislation, or statutory
13-14 changes designed to more efficiently administer and effectuate the
13-15 purposes of a retirement system or other program administered by
13-16 the board. In addition, the board or an officer or employee of the
13-17 retirement system may provide to a member of the legislature or a
13-18 legislative committee, at the request of the member or committee,
13-19 any factual information that is not made confidential by law.
13-20 SECTION 18. Subsection (b), Section 815.303, Government
13-21 Code, is amended to read as follows:
13-22 (b) To be eligible to lend securities under this section, a
13-23 bank or brokerage firm must:
13-24 (1) be experienced in the operation of a fully secured
13-25 securities loan program;
14-1 (2) maintain adequate capital in the prudent judgment
14-2 of the retirement system to assure the safety of the securities;
14-3 (3) execute an indemnification agreement satisfactory
14-4 in form and content to the retirement system fully indemnifying the
14-5 retirement system against loss resulting from borrower default in
14-6 its operation of a securities loan program for the system's
14-7 securities; and
14-8 (4) require any securities broker or dealer to whom it
14-9 lends securities belonging to the retirement system to deliver to
14-10 and maintain with the custodian collateral in the form of cash or
14-11 United States government securities in an amount equal to not less
14-12 than 100 percent of the market value, from time to time, of the
14-13 loaned securities.
14-14 SECTION 19. Section 815.307, Government Code, is amended to
14-15 read as follows:
14-16 Sec. 815.307. DUTY OF CARE. The assets of the retirement
14-17 system shall be invested and reinvested without distinction as to
14-18 their source in accordance with Section 67, Article XVI, Texas
14-19 Constitution. Investment and management decisions concerning
14-20 individual investments shall be evaluated not in isolation but in
14-21 the context of the investment portfolio as a whole and as part of
14-22 an overall investment strategy consistent with the investment
14-23 objectives of the retirement system. [In making investments for
14-24 the retirement system, the board of trustees or the executive
14-25 director shall exercise the judgment and care, under the
15-1 circumstances prevailing at the time of the investment, that
15-2 persons of ordinary prudence, discretion, and intelligence exercise
15-3 in the management of their own affairs, not in speculation but when
15-4 making a permanent disposition of their funds, considering the
15-5 probable income from the disposition and the probable safety of
15-6 their capital.]
15-7 SECTION 20. Subsection (a), Section 815.403, Government
15-8 Code, is amended to read as follows:
15-9 (a) During each fiscal year, the state shall contribute to
15-10 the retirement system:
15-11 (1) an amount equal to 7.4 percent of the total
15-12 compensation of all members of the retirement system for that year;
15-13 (2) money to pay lump-sum death benefits for retirees
15-14 under Section 814.501;
15-15 (3) an amount for the law enforcement and custodial
15-16 officer supplemental retirement fund equal to 2.13 percent of the
15-17 aggregate state compensation of all custodial and law enforcement
15-18 officers for that year;
15-19 (4) money necessary for the administration of the law
15-20 enforcement and custodial officer supplemental retirement fund; and
15-21 (5) money for service credit not previously
15-22 established, as provided by Section 813.202(c) [813.202(e)] or
15-23 813.302(d).
15-24 SECTION 21. Subchapter F, Chapter 815, Government Code, is
15-25 amended by adding Section 815.5072 to read as follows:
16-1 Sec. 815.5072. EXCESS BENEFIT ARRANGEMENT. (a) A separate,
16-2 nonqualified, unfunded excess benefit arrangement is created
16-3 outside the trust fund of the retirement system. This excess
16-4 benefit arrangement shall be administered as a governmental excess
16-5 benefit arrangement under Section 415(m) of the Internal Revenue
16-6 Code of 1986 (26 U.S.C. Section 415(m)). The purpose of the excess
16-7 benefit arrangement is to pay to annuitants of the retirement
16-8 system benefits otherwise payable by the retirement system that
16-9 exceed the limitations on benefits imposed by Section 415(b)(1)(A)
16-10 of the Internal Revenue Code of 1986 (26 U.S.C. Section
16-11 415(b)(1)(A)).
16-12 (b) The board of trustees is responsible for the
16-13 administration of this arrangement. Except as otherwise provided
16-14 by this section, the board has the same rights, duties, and
16-15 responsibilities concerning the excess benefit arrangement as it
16-16 has to the trust fund.
16-17 (c) Benefits under this section are exempt from execution to
16-18 the same extent as provided by Section 811.005, except that the
16-19 benefits are completely unassignable. Contributions to this
16-20 arrangement are not held in trust and may not be commingled with
16-21 other funds of the retirement system.
16-22 (d) An annuitant is entitled to a monthly benefit under this
16-23 section in an amount equal to the amount by which the benefit
16-24 otherwise payable by the retirement system has been reduced by the
16-25 limitation on benefits imposed by Section 415(b)(1)(A) of the
17-1 Internal Revenue Code of 1986 (26 U.S.C. Section 415(b)(1)(A)).
17-2 The benefit payable by this arrangement is payable at the times and
17-3 in the form that the benefit payable under the trust fund is paid.
17-4 (e) The benefit payable under this section shall be paid
17-5 from state contributions that otherwise would be made to the trust
17-6 fund under Section 815.403. In lieu of deposit in the state
17-7 accumulation account, an amount determined by the retirement system
17-8 to be necessary to pay benefits under this section shall be paid
17-9 monthly to the credit of a dedicated account in the general revenue
17-10 fund maintained only for the excess benefit arrangement. The
17-11 account may include amounts needed to pay reasonable and necessary
17-12 expenses of administering this arrangement. The monthly amount to
17-13 be paid to the credit of the account shall be transferred to the
17-14 account at least 15 days before the date of a monthly disbursement
17-15 under this section.
17-16 (f) The board of trustees may adopt rules governing the
17-17 excess benefit arrangement that are necessary for the efficient
17-18 administration of the arrangement in compliance with Section 415(m)
17-19 of the Internal Revenue Code of 1986 (26 U.S.C. Section 415(m)).
17-20 SECTION 22. Subsection (a), Section 815.510, Government
17-21 Code, is amended to read as follows:
17-22 (a) The Employees Retirement System of Texas shall submit a
17-23 report not later than the 25th day of the month following the end
17-24 of each fiscal year to the governor, the lieutenant governor, the
17-25 speaker of the house of representatives, the executive director of
18-1 the State Pension Review Board, the appropriate oversight
18-2 committees of the house and senate, and the Legislative Budget
18-3 Board. The report shall include the following:
18-4 (1) the current end-of-fiscal-year market value of the
18-5 trust fund;
18-6 (2) [the current book value of the trust fund;]
18-7 [(3)] the asset allocations of the trust fund
18-8 expressed in percentages of stocks, fixed income, cash, or other
18-9 financial investments; and
18-10 (3) [(4)] the investment performance of the trust fund
18-11 utilizing accepted industry measurement standards.
18-12 SECTION 23. Subchapter F, Chapter 815, Government Code, is
18-13 amended by adding Section 815.512 to read as follows:
18-14 Sec. 815.512. PROTECTION FROM DOUBLE OR MULTIPLE LIABILITY.
18-15 The executive director may cause a suit concerning a claim to be
18-16 filed on behalf of the retirement system in a district court in
18-17 Travis County to protect the system from double or multiple
18-18 liability, if the executive director determines that a claim may
18-19 expose the retirement system to such liability.
18-20 SECTION 24. (a) Annuities that are described by Section
18-21 814.107, 814.207, or 814.305, Government Code, or Subsection (a),
18-22 Section 814.601, Government Code, and are based on service
18-23 retirements, disability retirements, or deaths that occurred or
18-24 occur after August 31, 1996, but before September 1, 1999, are
18-25 increased by 12.5 percent.
19-1 (b) The increase in annuities under Subsection (a) of this
19-2 section is payable beginning with the first monthly payments of the
19-3 annuities that become due after the effective date of this Act.
19-4 (c) Except as provided by Subsection (d) of this section,
19-5 the board of trustees of the retirement system shall pay the
19-6 increased annuities provided by this section from the retirement
19-7 annuity reserve account of the retirement system and may transfer
19-8 to that account from the state accumulation account of the
19-9 retirement system any portion of the amount that exceeds the amount
19-10 in the retirement annuity reserve account available to finance the
19-11 increases in benefits, and that is actuarially determined to be
19-12 necessary to finance the increases, for the duration of the
19-13 annuities to which the increases apply.
19-14 (d) The increase in benefits payable to a law enforcement or
19-15 custodial officer who retired before the age of 50 or for service
19-16 established under Section 813.509, Government Code, is payable from
19-17 the law enforcement and custodial officer supplemental retirement
19-18 fund.
19-19 (e) The increase provided by Subsection (a) of this section
19-20 shall be computed on the service percentage value described by
19-21 Subsection (a), Section 814.105, Government Code.
19-22 SECTION 25. The board of trustees of the Employees
19-23 Retirement System of Texas shall authorize a supplemental payment
19-24 under Subsection (d), Section 814.603, Government Code, to be made
19-25 in the fiscal year beginning September 1, 1997, if the conditions
20-1 required by that subsection are met.
20-2 SECTION 26. Subsection (c), Section 830.002, Government
20-3 Code, is amended to read as follows:
20-4 (c) The Employees Retirement System of Texas [Higher
20-5 Education Coordinating Board] shall develop policies, practices,
20-6 and procedures as necessary in accordance with applicable statutes
20-7 to provide greater uniformity in the administration of the
20-8 retirement annuity insurance program available to employees of
20-9 Texas state colleges and universities through the optional
20-10 retirement program.
20-11 SECTION 27. Section 830.004, Government Code, is amended by
20-12 adding Subsection (c) to read as follows:
20-13 (c) An institution of higher education may establish a
20-14 governmental excess benefit arrangement as provided by Section
20-15 415(m) of the Internal Revenue Code of 1986 (26 U.S.C. Section
20-16 415(m)) for the purpose of providing to participants in the
20-17 optional retirement program any portion of a participant's benefits
20-18 that would otherwise be payable under the terms of the program
20-19 except for the limitation on benefits imposed by Section 415 of the
20-20 Internal Revenue Code of 1986 (26 U.S.C. Section 415). The
20-21 governing board of an institution of higher education may take any
20-22 action necessary to establish and implement a governmental excess
20-23 benefit arrangement authorized in accordance with this subsection.
20-24 SECTION 28. Section 830.006, Government Code, is amended to
20-25 read as follows:
21-1 Sec. 830.006. REPORTS FROM INSTITUTIONS. (a) The governing
21-2 board of each institution of higher education[, other than the
21-3 Texas Higher Education Coordinating Board,] shall annually submit a
21-4 report to the Employees Retirement System of Texas [coordinating
21-5 board] that includes information concerning the number of
21-6 participants and eligible positions and the amount of
21-7 contributions.
21-8 (b) The governing board of each institution required to file
21-9 a report under Subsection (a) shall keep records, make
21-10 certifications, and furnish to the Employees Retirement System of
21-11 Texas [Higher Education Coordinating Board] information and reports
21-12 as required by the retirement system [coordinating board] to enable
21-13 it to carry out its functions under this subtitle.
21-14 [(c) The Texas Higher Education Coordinating Board shall
21-15 prepare the report required by Subsection (a) and shall maintain
21-16 the information required by Subsection (b) with respect to its own
21-17 employees.]
21-18 SECTION 29. Subsection (b), Section 830.101, Government
21-19 Code, is amended to read as follows:
21-20 (b) Eligibility to participate in the optional retirement
21-21 program is subject to rules adopted by the Employees Retirement
21-22 System of Texas [Higher Education Coordinating Board].
21-23 SECTION 30. Subsection (d), Section 833.103, Government
21-24 Code, is amended to read as follows:
21-25 (d) A member may [not] establish one month of service credit
22-1 for each month or fraction of a month of duty, but not more than 48
22-2 months of service credit in the retirement system for military
22-3 service.
22-4 SECTION 31. Section 833.105, Government Code, is amended to
22-5 read as follows:
22-6 Sec. 833.105. ALTERNATIVE PAYMENTS TO ESTABLISH OR
22-7 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
22-8 rules to provide procedures for making installment payments to
22-9 establish or reestablish credit in the retirement system as
22-10 alternatives to lump-sum payments otherwise authorized or required
22-11 by this subtitle. The methods may include payment by payroll
22-12 deduction. [A member who is otherwise eligible may establish or
22-13 reestablish service creditable in the retirement system by making
22-14 payments as provided by this section in lieu of lump-sum payments
22-15 otherwise authorized or required by this subtitle.]
22-16 (b) Except as provided by Subsection (c), payments [A
22-17 payment authorized by this section consists of the contribution
22-18 required to establish or reestablish at least one year of service
22-19 credit, including any required interest and membership fees, except
22-20 that a person's last in a series of payments under this section may
22-21 be for a period of remaining service that is less than one year.]
22-22 [(c) The retirement system shall grant the applicable amount
22-23 of service credit after each payment is made under this section.]
22-24 [(d) Payments] may not be made under a rule adopted under
22-25 this section:
23-1 (1) to establish or reestablish service credit of a
23-2 person who has retired or died; or
23-3 (2) to establish current service under Section
23-4 833.101.
23-5 (c) Under a rule adopted under this section, the designated
23-6 beneficiary of a deceased member or, if none exists, the personal
23-7 representative of the decedent's estate may establish or
23-8 reestablish service for which the member was eligible at the time
23-9 of death if the establishment or reestablishment of the service
23-10 would result in the payment of a death benefit annuity.
23-11 (d) The payment for the establishment or reestablishment of
23-12 service under Subsection (c) must be made in a lump sum and
23-13 completed before the first payment of a death benefit annuity, but
23-14 not later than the 60th day after the date the retirement system
23-15 receives notice of the death.
23-16 [(e) The retirement system may adopt rules to administer
23-17 this section.]
23-18 SECTION 32. Subchapter A, Chapter 834, Government Code, is
23-19 amended by adding Section 834.005 to read as follows:
23-20 Sec. 834.005. DISCLAIMER OF BENEFITS. The retirement system
23-21 shall give effect to a full or partial disclaimer of benefits
23-22 executed in accordance with Section 37A, Texas Probate Code, unless
23-23 the benefit to be disclaimed is a lifetime annuity.
23-24 SECTION 33. Subsection (a), Section 834.101, Government
23-25 Code, is amended to read as follows:
24-1 (a) A member is eligible to retire and receive a base
24-2 service retirement annuity if the member:
24-3 (1) is at least 65 years old, currently holds a
24-4 judicial office, and has at least 10 years of service credited in
24-5 the retirement system[, the most recently performed of which was
24-6 for a continuous period of at least one year];
24-7 (2) is at least 65 years old and has at least 12 years
24-8 of service[, continuous or otherwise,] credited in the retirement
24-9 system, regardless of whether the member currently holds a judicial
24-10 office; or
24-11 (3) has at least 20 years of service credited in the
24-12 retirement system, [the most recently performed of which was for a
24-13 continuous period of at least 10 years,] regardless of whether the
24-14 member currently holds a judicial office.
24-15 SECTION 34. Section 834.302, Government Code, is amended to
24-16 read as follows:
24-17 Sec. 834.302. SELECTION OF DEATH BENEFIT PLAN BY SURVIVOR OF
24-18 MEMBER. (a) If a member eligible to select a death benefit plan
24-19 under Section 834.301(a) dies without having made a selection, or
24-20 if a selection cannot be made effective, the member's designated
24-21 beneficiary [surviving spouse] may select a plan in the same manner
24-22 as if the member had made the selection. If there is no designated
24-23 beneficiary [surviving spouse], the personal representative of the
24-24 decedent's estate may make the selection.
24-25 (b) If a person dies who meets the description in Section
25-1 814.302(b), the person's designated beneficiary [surviving spouse]
25-2 or the guardian of surviving minor children may select a death
25-3 benefit plan under that subsection.
25-4 SECTION 35. Subsection (d), Section 838.103, Government
25-5 Code, is amended to read as follows:
25-6 (d) A member may [not] establish one month of service credit
25-7 for each month or fraction of a month of duty, but not more than 48
25-8 months of service credit in the retirement system for military
25-9 service.
25-10 SECTION 36. Section 838.105, Government Code, is amended to
25-11 read as follows:
25-12 Sec. 838.105. ALTERNATIVE PAYMENTS TO ESTABLISH OR
25-13 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
25-14 rules to provide procedures for making installment payments to
25-15 establish or reestablish credit in the retirement system as
25-16 alternatives to lump-sum payments otherwise authorized or required
25-17 by this subtitle. The methods may include payment by payroll
25-18 deduction. [A member who is otherwise eligible may establish or
25-19 reestablish service creditable in the retirement system by making
25-20 payments as provided by this section in lieu of lump-sum payments
25-21 otherwise authorized or required by this subtitle.]
25-22 (b) Except as provided by Subsection (c), payments [A
25-23 payment authorized by this section consists of the contribution
25-24 required to establish or reestablish at least one year of service
25-25 credit, including any required interest and membership fees, except
26-1 that a person's last in a series of payments under this section may
26-2 be for a period of remaining service that is less than one year.]
26-3 [(c) The retirement system shall grant the applicable amount
26-4 of service credit after each payment is made under this section.]
26-5 [(d) Payments] may not be made under a rule adopted under
26-6 this section:
26-7 (1) to establish or reestablish service credit of a
26-8 person who has retired or died; or
26-9 (2) to establish current service under Section
26-10 838.101.
26-11 (c) Under a rule adopted under this section, the designated
26-12 beneficiary of a deceased member or, if none exists, the personal
26-13 representative of the decedent's estate may establish or
26-14 reestablish service for which the member was eligible at the time
26-15 of death if the establishment or reestablishment of the service
26-16 would result in the payment of a death benefit annuity.
26-17 (d) The payment for the establishment or reestablishment of
26-18 service under Subsection (c) must be made in a lump sum and
26-19 completed before the first payment of a death benefit annuity, but
26-20 not later than the 60th day after the date the retirement system
26-21 receives notice of the death.
26-22 [(e) The retirement system may adopt rules to administer
26-23 this section.]
26-24 SECTION 37. Subchapter A, Chapter 839, Government Code, is
26-25 amended by adding Section 839.004 to read as follows:
27-1 Sec. 839.004. DISCLAIMER OF BENEFITS. The retirement system
27-2 shall give effect to a full or partial disclaimer of benefits
27-3 executed in accordance with Section 37A, Texas Probate Code, unless
27-4 the benefit to be disclaimed is a lifetime annuity.
27-5 SECTION 38. Subsection (a), Section 839.101, Government
27-6 Code, is amended to read as follows:
27-7 (a) A member is eligible to retire and receive a service
27-8 retirement annuity if the member:
27-9 (1) is at least 65 years old, currently holds a
27-10 judicial office, and has at least 10 years of service credited in
27-11 the retirement system[, the most recently performed of which was
27-12 for a continuous period of at least one year];
27-13 (2) is at least 65 years old and has at least 12 years
27-14 of service[, continuous or otherwise,] credited in the retirement
27-15 system, regardless of whether the member currently holds a judicial
27-16 office; or
27-17 (3) has at least 20 years of service credited in the
27-18 retirement system, [the most recently performed of which was for a
27-19 continuous period of at least 10 years,] regardless of whether the
27-20 member currently holds a judicial office.
27-21 SECTION 39. Section 839.302, Government Code, is amended to
27-22 read as follows:
27-23 Sec. 839.302. SELECTION OF DEATH BENEFIT PLAN BY SURVIVOR OF
27-24 MEMBER. If a member eligible to select a death benefit plan under
27-25 Section 839.301 dies without having made a selection or if a plan
28-1 selected cannot be made effective, the member's designated
28-2 beneficiary [surviving spouse] may select a plan in the same manner
28-3 as if the member had made the selection. If there is no designated
28-4 beneficiary [surviving spouse], the personal representative of the
28-5 decedent's estate may make the selection.
28-6 SECTION 40. Subsection (b), Section 840.3012, Government
28-7 Code, is amended to read as follows:
28-8 (b) To be eligible to lend securities under this section, a
28-9 bank or brokerage firm must:
28-10 (1) be experienced in the operation of a fully secured
28-11 securities loan program;
28-12 (2) maintain adequate capital in the prudent judgment
28-13 of the retirement system to assure the safety of the securities;
28-14 (3) execute an indemnification agreement satisfactory
28-15 in form and content to the retirement system fully indemnifying the
28-16 retirement system against loss resulting from borrower default in
28-17 its operation of a securities loan program for the system's
28-18 securities; and
28-19 (4) require any securities broker or dealer to whom it
28-20 lends securities belonging to the retirement system to deliver to
28-21 and maintain with the custodian collateral in the form of cash or
28-22 United States government securities in an amount equal to not less
28-23 than 100 percent of the market value, from time to time, of the
28-24 loaned securities.
28-25 SECTION 41. Section 840.303, Government Code, is amended to
29-1 read as follows:
29-2 Sec. 840.303. DUTY OF CARE. The assets of the retirement
29-3 system shall be invested and reinvested without distinction as to
29-4 their source in accordance with Section 67, Article XVI, Texas
29-5 Constitution. Investment and management decisions concerning
29-6 individual investments shall be evaluated not in isolation but in
29-7 the context of the investment portfolio as a whole and as part of
29-8 an overall investment strategy consistent with the investment
29-9 objectives of the retirement system. [In making investments for
29-10 the retirement system, the board of trustees shall exercise the
29-11 judgment and care, under the circumstances prevailing at the time
29-12 of the investment, that persons of ordinary prudence, discretion,
29-13 and intelligence exercise in the management of their own affairs,
29-14 not in speculation but when making a permanent disposition of their
29-15 funds, considering the probable income from the disposition and the
29-16 probable safety of their capital.]
29-17 SECTION 42. Section 609.009, Government Code, is amended to
29-18 read as follows:
29-19 Sec. 609.009. TRUST FOR [OWNERSHIP UNDER] 457 PLAN. An
29-20 employee's deferred amounts and investment income under a 457 plan
29-21 and the qualified investment products in which the amounts are
29-22 invested are held in trust for the exclusive benefit of
29-23 participants and their beneficiaries in accordance with Section 457
29-24 of the Internal Revenue Code of 1986 (26 U.S.C. Section 457). For
29-25 purposes of this section, custodial accounts and contracts
30-1 described by Section 457 are treated as trusts. A trust does not
30-2 have to be established before January 1, 1999, for a 457 plan in
30-3 existence on August 20, 1996 [the property of the employing
30-4 political subdivision or state agency, as appropriate, until the
30-5 deferred amounts and investment income are distributed to the
30-6 employee].
30-7 SECTION 43. Subsections (a) and (b), Section 609.502,
30-8 Government Code, are amended to read as follows:
30-9 (a) The board of trustees of the Employees Retirement System
30-10 of Texas is the trustee and the plan administrator of a 401(k) plan
30-11 known as TexaSaver established under this subchapter.
30-12 (b) The board of trustees is the trustee and the plan
30-13 administrator of a 457 plan established under this subchapter.
30-14 SECTION 44. Subsection (b), Section 609.509, Government
30-15 Code, is amended to read as follows:
30-16 (b) In a contract under Subsection (a), the board of
30-17 trustees may provide for the board to audit periodically the person
30-18 with whom the contract is made. The audit may cover:
30-19 (1) the proper handling and accounting of state or
30-20 trust funds; and
30-21 (2) other matters related to the proper performance of
30-22 the contract.
30-23 SECTION 45. Subsection (b), Section 609.512, Government
30-24 Code, is amended to read as follows:
30-25 (b) The deferred compensation trust fund is in the state
31-1 treasury. The fund is for the benefit of the deferred compensation
31-2 plan described by Section 609.502(b) [609.502(a)].
31-3 SECTION 46. Subdivisions (2) and (9), Subsection (a),
31-4 Section 3, Texas Employees Uniform Group Insurance Benefits Act
31-5 (Article 3.50-2, Vernon's Texas Insurance Code), are amended to
31-6 read as follows:
31-7 (2) "Annuitant" shall mean an officer or employee who
31-8 retires under:
31-9 (A) the jurisdiction of the Employees Retirement
31-10 System of Texas and either receives an annuity or is eligible to
31-11 receive an annuity, pursuant to Subtitle B, D, or E of Title 8,
31-12 Government Code, [or Chapter 803, Government Code,] that is based
31-13 on at least 10 years of service credit or eligibility under Section
31-14 814.002 or 814.102, Government Code;
31-15 (B) the jurisdiction of the Teacher Retirement
31-16 System of Texas and either receives an annuity or is eligible to
31-17 receive an annuity, pursuant to Subtitle C, Title 8, Government
31-18 Code, [or Chapter 803, Government Code,] that is based on at least
31-19 10 years of service credit, whose last state employment prior to
31-20 retirement, including employment by a public community/junior
31-21 college, was as an employee of a department whose employees are
31-22 authorized to participate in the Texas employees uniform group
31-23 insurance program;
31-24 (C) the optional retirement program established
31-25 by Chapter 830, Government Code, and either receives an annuity or
32-1 is eligible to receive an annuity under that program, if the
32-2 person's last state employment before retirement, including
32-3 employment by a public community/junior college, was as an employee
32-4 of a department whose employees are authorized to participate in
32-5 the Texas employees uniform group insurance program and if the
32-6 person either:
32-7 (i) would have been eligible to retire and
32-8 receive a service retirement annuity from the Teacher Retirement
32-9 System of Texas or the Employees Retirement System of Texas based
32-10 on at least 10 years of service credit had the person not elected
32-11 to participate in the optional retirement program; or
32-12 (ii) is disabled as determined by the
32-13 Employees Retirement System of Texas; [or]
32-14 (D) any other federal or state statutory
32-15 retirement program to which an institution of higher education has
32-16 made employer contributions, if the employee has met service
32-17 requirements, age requirements, and other applicable requirements
32-18 comparable to the requirements for retirement under the Teacher
32-19 Retirement System of Texas, based on at least 10 years of service
32-20 credit; or
32-21 (E) the proportionate retirement program
32-22 established by Chapter 803, Government Code, and either receives an
32-23 annuity or is eligible to receive an annuity that is based on at
32-24 least 10 years of service credit, at least five of which were
32-25 performed as an employee of a department whose employees are
33-1 authorized to participate in the Texas employee uniform group
33-2 insurance program.
33-3 (9) "Qualified carrier" shall mean:
33-4 (A) any insurance company authorized to do
33-5 business in this state by the Texas Department [State Board] of
33-6 Insurance to provide any of the types of insurance coverages,
33-7 benefits, or services provided for in this Act under any of the
33-8 insurance laws of the State of Texas, which has a surplus of $1
33-9 million, a successful operating history, and which has had
33-10 successful experience in providing and servicing any of the types
33-11 of group coverage provided for in this Act as determined by the
33-12 Texas Department [State Board] of Insurance;
33-13 (B) any corporation operating under Chapter 20
33-14 or 20A of the Insurance Code which provides any of the types of
33-15 coverage, benefits, or services provided for in this Act, a
33-16 successful operating history, and which has had successful
33-17 experience in providing and servicing any of the types of group
33-18 coverage provided for in this Act as determined by the Texas
33-19 Department [State Board] of Insurance; or
33-20 (C) any combination or carriers as herein
33-21 defined, upon such terms and conditions as may be prescribed by the
33-22 trustee, providing, however, that for purposes of this Act carriers
33-23 combining for the purpose of bidding and/or underwriting this
33-24 program shall not be considered in violation of Sections 15.01
33-25 through 15.34, Chapter 15, Title 2, Competition and Trade
34-1 Practices, Texas Business & Commerce Code.
34-2 SECTION 47. (a) Subsection (e), Section 4B, Texas Employees
34-3 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
34-4 Texas Insurance Code), as added by Chapter 242, Acts of the 72nd
34-5 Legislature, Regular Session, 1991, is amended to read as follows:
34-6 (e) The trustee may delegate [the duties of the executive
34-7 director under this section to another employee of the Employees
34-8 Retirement System of Texas and may delegate] its duties to hear
34-9 appeals to the executive director.
34-10 (b) Subsection (e), Section 4B, Texas Employees Uniform
34-11 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
34-12 Insurance Code), as added by Chapter 391, Acts of the 72nd
34-13 Legislature, Regular Session, 1991, is redesignated as Subsection
34-14 (f) of Section 4B to read as follows:
34-15 (f) [(e)] The executive director may delegate the duties of
34-16 the executive director under this section to another person who is
34-17 employed by the Employees Retirement System of Texas.
34-18 SECTION 48. Subsection (a), Section 4C, Texas Employees
34-19 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
34-20 Texas Insurance Code), is amended to read as follows:
34-21 (a) The trustee may develop a system for an employee[,
34-22 school district employee,] or annuitant to electronically
34-23 authorize:
34-24 (1) enrollment in a coverage or benefit program;
34-25 (2) contributions to a coverage or benefit program;
35-1 and
35-2 (3) deductions or reductions to the compensation or
35-3 annuity of the employee[, school district employee,] or annuitant
35-4 for participation in a coverage or benefit program.
35-5 SECTION 49. Subsections (b), (h), (i), and (j), Section 5,
35-6 Texas Employees Uniform Group Insurance Benefits Act (Article
35-7 3.50-2, Vernon's Texas Insurance Code), are amended to read as
35-8 follows:
35-9 (b) In the event the trustee shall select a [as the] carrier
35-10 [one] whose bid was not the lowest of all bids submitted, such
35-11 selection shall be submitted together with justifications and
35-12 reasons therefor to the commissioner [State Board of Insurance].
35-13 Such deviating selection shall not be deemed final and binding
35-14 unless and until the commissioner [a majority of the State Board of
35-15 Insurance] has certified [its] approval in writing to the trustee,
35-16 or upon the expiration of 30 days after receipt thereof by the
35-17 commissioner [State Board of Insurance] such deviating selection
35-18 shall be deemed approved.
35-19 (h) In the event the trustee determines that benefits shall
35-20 be provided from the Employees Life, Accident, and Health Insurance
35-21 and Benefits Fund, the trustee may contract with one or more [a]
35-22 qualified and experienced administering firms [firm] on a
35-23 competitive bid basis to administer the plans of coverage [claims
35-24 arising from the coverages] provided in Section 5 of the Act.
35-25 (i) The trustee shall select one or more [the desired]
36-1 administering firms [firm] to provide services which shall be in
36-2 the best interests of the employees covered by the Act. The
36-3 trustee is not required to select the lowest bid but shall take
36-4 into consideration such other factors as ability to service large
36-5 group programs, past experience, and other relevant criteria.
36-6 Should the trustee select a firm whose bid was not the lowest or
36-7 one whose bid differs from that specified, the reasons for such
36-8 action shall be fully justified and explained in the minutes of the
36-9 next meeting of the trustee.
36-10 (j) The trustee may not contract for or provide a plan of
36-11 [group] coverage [or with a health maintenance organization or
36-12 provide coverage directly from the fund] that:
36-13 (1) excludes or limits coverage or services for
36-14 acquired immune deficiency syndrome, as defined by the Centers for
36-15 Disease Control of the United States Public Health Service, or
36-16 human immunodeficiency virus infection; or
36-17 (2) provides coverage for serious mental illness that
36-18 is less extensive than the coverage provided for any [other]
36-19 physical illness.
36-20 SECTION 50. Subsection (a), Section 5A, Texas Employees
36-21 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
36-22 Texas Insurance Code), is amended to read as follows:
36-23 (a) The trustee may define the basic coverage in which every
36-24 full-time employee and every annuitant participates unless
36-25 participation is specifically waived. The trustee may define
37-1 different basic coverage plans for active full-time employees and
37-2 for annuitants. Basic coverage must include basic health coverage.
37-3 Basic health coverage may be offered through any health benefits
37-4 plan. [Basic coverage shall include, but not be limited to,
37-5 benefits and health care service required by state and federal
37-6 law.]
37-7 SECTION 51. Section 9, Texas Employees Uniform Group
37-8 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
37-9 Code), is amended to read as follows:
37-10 Sec. 9. ANNUAL ACCOUNTING; SPECIAL CONTINGENCY RESERVE.
37-11 (a) A carrier [Carriers] providing any policy purchased under this
37-12 Act shall provide an accounting to the trustee not later than 90
37-13 days after the end of each policy year. The accounting shall set
37-14 forth, in a form approved by the trustee:
37-15 (1) the amounts of premiums actually accrued under the
37-16 policy from its date of issue to the end of the policy year;
37-17 (2) the total of all mortality and other claims,
37-18 charges, losses, costs, and expenses incurred for that period; and
37-19 (3) the amounts of the carrier's [insurers'] allowance
37-20 for a reasonable profit and contingencies for that period.
37-21 (b) An excess of the total of Subdivision (a)(1) of this
37-22 section over the sum of Subdivisions (a)(2) and (a)(3) of this
37-23 section shall be held by the carrier issuing a participating [the]
37-24 policy as a special contingency reserve to be used by the carrier
37-25 only for charges, claims, costs, and expenses under the policy.
38-1 The reserve shall bear interest at a rate determined in advance of
38-2 each policy year by the carrier and approved by the trustee as
38-3 being consistent with the rates generally used by the carrier for
38-4 similar funds held under other group insurance policies. When the
38-5 trustee determines that the special contingency reserve has
38-6 attained an amount estimated by it to make satisfactory provision
38-7 for adverse fluctuations in future charges, claims, costs, or
38-8 expenses under the policy, any further excess shall be deposited in
38-9 the State Treasury to the credit of the Employees Life, Accident,
38-10 and Health Insurance and Benefits Fund. When a policy is
38-11 discontinued, any balance remaining in the special contingency
38-12 reserve after all charges have been made shall be deposited in the
38-13 State Treasury to the credit of the fund. The carrier may make the
38-14 deposit in equal monthly installments over a period of not more
38-15 than two years.
38-16 SECTION 52. Subsection (b), Section 10, Texas Employees
38-17 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
38-18 Texas Insurance Code), is amended to read as follows:
38-19 (b) Policies [Exemption from Taxes on Premiums. Premiums or
38-20 contributions on policies], insurance contracts, certificates of
38-21 coverage, evidence of coverage, and agreements with health
38-22 maintenance organizations and plan administrators, or any other
38-23 coverages established under this Act, [or other coverages] shall
38-24 not be subject to any state tax, regulatory fee, or surcharge,
38-25 including premium or maintenance taxes or fees.
39-1 SECTION 53. Section 11, Texas Employees Uniform Group
39-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
39-3 Code), is amended by adding Subsection (d) to read as follows:
39-4 (d) In addition to the authority granted under Article
39-5 3.50-6, Insurance Code, the trustee may adopt rules to provide for
39-6 payment of accelerated life insurance benefits to a terminally ill,
39-7 terminally injured, or permanently disabled participant in amounts
39-8 that benefit the participants without increasing the cost of
39-9 providing the benefits. The amount of any payment of an
39-10 accelerated benefit under rules adopted under this subsection must
39-11 be deducted from the amount that would otherwise be payable as a
39-12 death benefit.
39-13 SECTION 54. Section 12, Texas Employees Uniform Group
39-14 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
39-15 Code), is amended by adding Subsection (e) to read as follows:
39-16 (e) The trustee shall give effect to a full or partial
39-17 disclaimer of benefits executed in accordance with Section 37A,
39-18 Texas Probate Code.
39-19 SECTION 55. Subsections (b) and (c), Section 13, Texas
39-20 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
39-21 Vernon's Texas Insurance Code), are amended to read as follows:
39-22 (b) Unless participation is waived specifically or unless an
39-23 employee or employee-annuitant is expelled from the program under
39-24 Section 13A of this Act, every full-time employee except one who is
39-25 described by Section 3(a)(5)(A)(x) of this Act shall be covered
40-1 automatically by the basic plan for active full-time employees and
40-2 every employee-annuitant shall be covered by the basic plan for
40-3 retired employee-annuitants. Coverage shall begin on the date he
40-4 becomes eligible, and each policy of insurance purchased by the
40-5 trustee shall provide for such automatic coverage.
40-6 (c) Unless expelled from the program under Section 13A of
40-7 this Act, each part-time employee and each employee of an
40-8 institution of higher education who is described by Section
40-9 3(a)(5)(A)(x) [3(a)(5)(A)(viii)] of this Act is eligible for
40-10 participation in the group programs provided under this Act upon
40-11 execution of appropriate application for coverage [payroll
40-12 deduction authorization for the required payment of premiums]. An
40-13 institution of higher education shall, at the time of employment,
40-14 notify each employee of the institution who is described by Section
40-15 3(a)(5)(A)(x) [3(a)(5)(A)(viii)] of this Act of the employee's
40-16 eligibility to participate in the group programs provided under
40-17 this Act.
40-18 SECTION 56. Subsection (f), Section 13A, Texas Employees
40-19 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
40-20 Texas Insurance Code), is amended to read as follows:
40-21 (f) An employee, annuitant, or dependent expelled from the
40-22 Texas employees uniform group insurance program may not participate
40-23 in any [a health maintenance organization or be insured under any
40-24 insurance or benefits] plan of coverage offered by the program for
40-25 a period determined by the trustee of not more than five years from
41-1 the date the expulsion from the program takes effect.
41-2 SECTION 57. Subsections (b), (c), and (d), Section 15, Texas
41-3 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
41-4 Vernon's Texas Insurance Code), are amended to read as follows:
41-5 (b) The state shall contribute to the cost of each
41-6 employee's individual and dependent group coverages the amounts
41-7 appropriated for the coverages in the General Appropriations Act.
41-8 The governing board of each state department and institution of
41-9 higher education participating in the program established under
41-10 this Act shall pay the trustee a like amount for each employee's
41-11 individual or dependent group coverages for their employees who
41-12 are, and retirees who were, compensated from funds not
41-13 appropriated in the General Appropriations Act. The departments
41-14 and institutions shall include the required contributions from
41-15 funds not appropriated in the General Appropriations Act in their
41-16 annual operating budgets. Each state department and institution of
41-17 higher education participating in the program shall assure current
41-18 participant coverages based on the records of the trustee, make
41-19 timely payments of amounts due the trustee from all fund sources
41-20 under the control of the department or institution, and reconcile
41-21 trustee and agency records of coverages and payments monthly.
41-22 There [From and after the effective date of this Act, there] is
41-23 hereby allocated [and appropriated] to the trustee, in accordance
41-24 with the provisions of this Act, from the several funds from which
41-25 [state] employees receive their respective salaries, a sum equal to
42-1 the total of all employer contributions computed in accordance with
42-2 the provisions of this Act and the rules and regulations of the
42-3 trustee promulgated pursuant thereto.
42-4 (c) All money hereby allocated [and appropriated] by the
42-5 state, including institutions of higher education, to the trustee
42-6 under this Act shall be paid to the trustee in monthly installments
42-7 based on the annual estimate by the trustee of the contributions to
42-8 be received for all [state] employees during said year; provided,
42-9 however, that in the event said estimate of the contributions of
42-10 the [state] employees shall vary from the actual amount of the
42-11 employer contributions during the year, such adjustments shall be
42-12 made at the close of each fiscal year as may be required. Each of
42-13 said monthly installments shall be paid into the appropriate fund
42-14 created by this Act in the amount certified by the trustee.
42-15 (d) The trustee shall certify to the governing boards of
42-16 those state departments and institutions of higher education
42-17 participating in the program established under this Act who provide
42-18 contributions for their employees' individual and dependent
42-19 coverages [employees] from operating budgets provided from sources
42-20 other than the General Appropriations Act the proportionate amounts
42-21 required [needed] to pay their respective contributions. Such
42-22 certifications shall be made at least 30 days prior to the meeting
42-23 at which the governing board adopts its operating budget.
42-24 SECTION 58. Subsections (a) and (b), Section 18, Texas
42-25 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
43-1 Vernon's Texas Insurance Code), are amended to read as follows:
43-2 (a) The group benefits advisory committee is composed of 26
43-3 [27] voting members as provided by this section. The office of the
43-4 attorney general, [the office of the state treasurer,] the office
43-5 of the comptroller, the Railroad Commission of Texas, the General
43-6 Land Office, and the Department of Agriculture are entitled to be
43-7 represented by one member each on the committee, who may be
43-8 appointed by the governing body of the state agency or elected by
43-9 and from the employees of the agency, as determined by rule by the
43-10 governing body of the agency. One employee shall be elected from
43-11 each of the remaining eight largest state agencies that are
43-12 governed by appointed officers by and from the employees of those
43-13 agencies. One nonvoting member shall be the executive director of
43-14 the Employees Retirement System of Texas. One member shall be an
43-15 expert in employee benefit issues from the private sector,
43-16 appointed by the governor. One member shall be an expert in
43-17 employee benefits issues from the private sector, appointed by the
43-18 lieutenant governor. One member shall be a retired state employee
43-19 appointed by the trustee. One member shall be a state employee of
43-20 a state agency other than one of the eight largest state agencies,
43-21 appointed by the trustee. Not more than one employee from a
43-22 particular state agency may serve on the committee. Each of the
43-23 seven largest institutions of higher education, as determined by
43-24 the number of employees on the payroll of an institution, shall
43-25 elect one member of the committee from among persons who have each
44-1 been nominated by a petition signed by at least 300 employees. Two
44-2 members shall be employees of institutions of higher education,
44-3 other than the seven largest institutions of higher education, who
44-4 are appointed by the Texas Higher Education Coordinating Board, but
44-5 not more than one employee shall be from any one institution. The
44-6 members shall elect a presiding officer from their membership to
44-7 serve a one-year term.
44-8 (b) All members of the committee shall be appointed or
44-9 elected for three-year terms. During a term of appointment or
44-10 election, state employee vacancies shall be filled by an employee
44-11 of the same agency from which the vacancy occurred[, being]
44-12 appointed by the governing body of the agency or institution
44-13 [trustees] for the balance of the vacated term. A vacancy in a
44-14 position held by a member of the private sector shall be filled by
44-15 the officer who originally made the appointment to that position.
44-16 SECTION 59. Subsection (a), Section 19, Texas Employees
44-17 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
44-18 Texas Insurance Code), is amended to read as follows:
44-19 (a) Any employee or annuitant shall be entitled to secure
44-20 for his dependents any uniform group coverages provided for
44-21 employees under this Act, as shall be determined by the trustee,
44-22 except that a foster child is eligible for health insurance
44-23 coverage only if the child is not covered by another governmental
44-24 health program. If an employee or annuitant resides outside of a
44-25 health maintenance organization service area, the uniform group
45-1 coverages must be made available to a dependent without evidence of
45-2 insurability if the employee or annuitant applies for the coverage
45-3 for the dependent during the annual enrollment period. Payments
45-4 required of the employee in excess of employer contributions shall
45-5 be deducted from the monthly pay of the employee or from his
45-6 retirement benefits, or the employee's salary shall be reduced in
45-7 the appropriate amount, in such manner and form as the trustee
45-8 shall determine.
45-9 SECTION 60. (a) Sections 803.403, 813.105, 833.106,
45-10 838.103(i), and 838.106, Government Code, are repealed.
45-11 (b) Subsection (e), Section 5, Texas Employees Uniform Group
45-12 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
45-13 Code), is repealed.
45-14 SECTION 61. (a) The change in law made by this Act in
45-15 Subdivision (9), Section 811.001 and Subsection (b), Section
45-16 814.104, Government Code, is intended to reflect the current law
45-17 providing for the commissioning and administration of the Capitol
45-18 area security force by the Department of Public Safety. Service
45-19 credit previously accrued by a member of the Capitol area security
45-20 force as a commissioned law enforcement officer of the General
45-21 Services Commission, or a predecessor agency, remains credited as
45-22 service by a law enforcement officer unless canceled as otherwise
45-23 provided by Subtitle B, Title 8, Government Code.
45-24 (b) The Texas Higher Education Coordinating Board shall
45-25 transfer all property relating to its duties as general supervisor
46-1 of institutions of higher education under the optional retirement
46-2 program established by Chapter 830, Government Code, to the
46-3 Employees Retirement System of Texas on the effective date of this
46-4 Act. A rule adopted by the Texas Higher Education Coordinating
46-5 Board under Chapter 830, Government Code, in effect on the
46-6 effective date of this Act remains in effect until amended or
46-7 repealed by a rule adopted by the Employees Retirement System of
46-8 Texas.
46-9 SECTION 62. This Act takes effect September 1, 1997.
46-10 SECTION 63. The importance of this legislation and the
46-11 crowded condition of the calendars in both houses create an
46-12 emergency and an imperative public necessity that the
46-13 constitutional rule requiring bills to be read on three several
46-14 days in each house be suspended, and this rule is hereby suspended.