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 transfers from the Texas Department of
2-7 Criminal Justice to the managed health care unit of The University
2-8 of Texas Medical Branch or the Texas Tech University Health
2-9 Sciences Center pursuant to Section 9.01, Chapter 238, Acts of the
2-10 73rd Legislature, 1993, elects at the time of transfer to retain
2-11 membership in the retirement system, and is certified by the
2-12 managed health care unit or the health sciences center as having a
2-13 normal job assignment described by this subdivision.
2-14 (9) "Law enforcement officer" means a member of the
2-15 retirement system who has been commissioned as a law enforcement
2-16 officer by the Department of Public Safety, the Texas Alcoholic
2-17 Beverage Commission, [the State Purchasing and General Services
2-18 Commission, Capitol Area Security Force,] the State Board of
2-19 Pharmacy, or the Parks and Wildlife Department and who is
2-20 recognized as a commissioned law enforcement officer by the
2-21 Commission on Law Enforcement Officer Standards and Education.
2-22 SECTION 3. Section 813.104, Government Code, is amended to
2-23 read as follows:
2-24 Sec. 813.104. ALTERNATIVE PAYMENTS TO ESTABLISH OR
2-25 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
3-1 rules to provide procedures for making installment payments to
3-2 establish or reestablish credit in the retirement system as
3-3 alternatives to lump-sum payments otherwise authorized or required
3-4 by this subtitle. The methods may include payment by payroll
3-5 deduction. [A member who is otherwise eligible may establish or
3-6 reestablish service creditable in the retirement system by making
3-7 payments as provided by this section in lieu of lump-sum payments
3-8 otherwise authorized or required by this subtitle.]
3-9 (b) [A payment authorized by this section consists of the
3-10 contribution required to establish or reestablish at least one year
3-11 of service credit, including any required interest and membership
3-12 fees, except that a person's last in a series of payments under
3-13 this section may be for a period of remaining service that is less
3-14 than one year.]
3-15 [(c) The retirement system shall grant the applicable amount
3-16 of service credit after each payment is made under this section.]
3-17 [(d)] Except as provided by Subsection (c) [(e)], payments
3-18 may not be made under a rule adopted under this section:
3-19 (1) to establish or reestablish service credit of a
3-20 person who has retired or died; or
3-21 (2) to establish current service under Section
3-22 813.201.
3-23 (c) Under a rule adopted under this section, the [(e) The]
3-24 designated beneficiary of a deceased member or, if none exists, the
3-25 personal representative of the decedent's estate may establish or
4-1 reestablish service for which the member was eligible at the time
4-2 of death if the establishment of the service would result in the
4-3 payment of a death benefit annuity or an increase in the amount of
4-4 a death benefit annuity.
4-5 (d) [(f)] The payment for the establishment or
4-6 reestablishment of service under Subsection (c) [(e)] must be made
4-7 in a lump sum and completed before the first payment of a death
4-8 benefit annuity, but not later than the 60th day after the date the
4-9 retirement system receives notice of the death.
4-10 [(g) The retirement system may adopt rules to administer
4-11 this section.]
4-12 SECTION 4. Section 813.106, Government Code, is amended to
4-13 read as follows:
4-14 Sec. 813.106. SERVICE NOT PREVIOUSLY ESTABLISHED. The state
4-15 shall make contributions for service not previously established
4-16 that is established under Section 813.104 [or 813.105] in the
4-17 amount provided by Section 813.202(c) [813.202(e)] for membership
4-18 service or the amount provided by Section 813.302(d) for military
4-19 service, as applicable. The state contributions will be made at
4-20 the time the service credit is granted.
4-21 SECTION 5. Section 813.202, Government Code, is amended to
4-22 read as follows:
4-23 Sec. 813.202. MEMBERSHIP SERVICE NOT PREVIOUSLY ESTABLISHED.
4-24 (a) Except as provided by Section 813.402 [and Subsection (b)],
4-25 any member may establish service credit in the retirement system
5-1 for membership service not previously established.
5-2 (b) A [Membership service not previously credited because of
5-3 a waiting period required before September 1, 1958, may be
5-4 established only by a contributing member.]
5-5 [(c) Except as provided by Subsection (d), a] member may
5-6 establish credit under this section by depositing with the
5-7 retirement system in a lump sum a contribution computed as provided
5-8 by Section 813.404 or 813.505, plus all membership fees due, plus
5-9 interest computed on the basis of the state fiscal year at an
5-10 annual rate of 10 percent from the date the service was performed
5-11 to the date of deposit.
5-12 (c) [(d) A member claiming credit for service not previously
5-13 creditable because of a waiting period required before September 1,
5-14 1958, is exempt from the payment of interest on the required
5-15 contribution if the member establishes the credit before the first
5-16 anniversary of the person's becoming a member of the retirement
5-17 system.]
5-18 [(e)] The state shall contribute for service established
5-19 under this section an amount in the same ratio to the member's
5-20 contribution for the service as the state's contribution bears to
5-21 the contribution for current service required of a member of the
5-22 employee class at the time the service is established under this
5-23 section. The state's contribution must be paid from the fund or
5-24 account from which the member receives compensation at the time the
5-25 service is established or, if the member does not hold a position
6-1 at the time the service is established, from the fund or account
6-2 from which the member received compensation when the member most
6-3 recently held a position.
6-4 SECTION 6. Subsection (b), Section 813.301, Government Code,
6-5 is amended to read as follows:
6-6 (b) A member may [not] establish one month of service credit
6-7 for each month or fraction of a month of duty, but not more than 60
6-8 months of service credit in the retirement system for military
6-9 service.
6-10 SECTION 7. Section 813.402, Government Code, is amended to
6-11 read as follows:
6-12 Sec. 813.402. CREDIT FOR YEAR IN WHICH ELIGIBLE FOR OFFICE.
6-13 (a) A [contributing] member may establish service credit in the
6-14 elected class for any calendar year during any part of which:
6-15 (1) the member held an office included in that class;
6-16 or
6-17 (2) the member was eligible to take the oath for an
6-18 office included in that class.
6-19 (b) A [contributing] member may establish credit under this
6-20 section by depositing with the retirement system in a lump sum a
6-21 contribution computed as provided by Section 813.404, plus all
6-22 membership fees due, plus interest computed at an annual rate of 10
6-23 percent from the fiscal year in which the service was performed to
6-24 the date of deposit.
6-25 SECTION 8. Section 813.504, Government Code, is amended to
7-1 read as follows:
7-2 Sec. 813.504. ELIGIBILITY FOR SERVICE CREDIT PREVIOUSLY
7-3 CANCELED. (a) A member of the employee class may reestablish
7-4 service credit previously canceled in the retirement system if at
7-5 least six months have elapsed since the end of the month in which
7-6 the cancellation became effective [the member, after cancellation
7-7 of the credit, holds a position for six months that is included in
7-8 the employee class].
7-9 (b) A former member of the employee class who does not
7-10 receive a disability retirement annuity from the retirement system
7-11 but who presents evidence satisfactory to the retirement system
7-12 that the person is disabled and cannot resume state employment may
7-13 reestablish service credit previously canceled in the retirement
7-14 system for the purpose of retiring with a service retirement
7-15 annuity.
7-16 SECTION 9. Subsections (a) and (c), Section 813.506,
7-17 Government Code, are amended to read as follows:
7-18 (a) The Texas Department of Criminal Justice, the managed
7-19 health care unit of The University of Texas Medical Branch, and the
7-20 Texas Tech University Health Sciences Center by rule shall adopt
7-21 standards for determining eligibility for service credit as a
7-22 custodial officer, based on the need to encourage early retirement
7-23 of persons whose duties are hazardous and require them to have
7-24 routine contact with inmates of or defendants confined in the state
7-25 jail division of the Texas Department of Criminal Justice on a
8-1 regular basis.
8-2 (c) The Texas Department of Criminal Justice, the managed
8-3 health care unit of The University of Texas Medical Branch, or the
8-4 Texas Tech University Health Sciences Center, as applicable, shall
8-5 determine a person's eligibility to receive credit as a custodial
8-6 officer. A determination of the department or unit may not be
8-7 appealed by an employee but is subject to change by the retirement
8-8 system.
8-9 SECTION 10. Subsection (a), Section 813.509, Government
8-10 Code, is amended to read as follows:
8-11 (a) A member who holds a position included in the employee
8-12 class of membership during the month that includes the effective
8-13 date of the member's retirement and who retires based on service or
8-14 a disability is entitled to service credit in the retirement system
8-15 for the member's sick leave that has accumulated and is unused on
8-16 the last day of employment. Sick leave is creditable in the
8-17 retirement system at the rate of one month of service credit for
8-18 each 20 days, or 160 hours, of accumulated sick leave and one month
8-19 for each fraction of days or hours remaining after division of the
8-20 total hours of accumulated sick leave by 160. [An increment of
8-21 less than 20 days is not creditable.]
8-22 SECTION 11. Subsection (a), Section 814.005, Government
8-23 Code, is amended to read as follows:
8-24 (a) A person may, on a form prescribed by and filed with the
8-25 retirement system, waive all or a portion of any benefits from the
9-1 retirement system to which the person is entitled. The retirement
9-2 system also shall give effect as a waiver to a full or partial
9-3 disclaimer executed in accordance with Section 37A, Texas Probate
9-4 Code, unless the benefit to be disclaimed is a lifetime annuity. A
9-5 person may revoke a waiver of benefits in the same manner as the
9-6 original waiver was made, unless the original waiver by its terms
9-7 was made irrevocable.
9-8 SECTION 12. Section 814.104, Government Code, is amended to
9-9 read as follows:
9-10 Sec. 814.104. ELIGIBILITY OF MEMBER FOR SERVICE RETIREMENT.
9-11 (a) Except as provided by Section 814.102 or by rule adopted under
9-12 Section 813.304(d) or 803.202(2), a member who has service credit
9-13 in the retirement system is eligible to retire and receive a
9-14 service retirement annuity[, if the member]:
9-15 (1) if the member is at least 60 years old and has 5
9-16 years of service credit in the employee class; or
9-17 (2) if the sum of the member's age and amount of
9-18 service credit in the employee class, including months of age and
9-19 credit, equals the number 80 [is at least 55 years old and has 25
9-20 years of service credit in the retirement system; or]
9-21 [(3) is at least 50 years old and has 30 years of
9-22 service credit in the retirement system].
9-23 (b) A member who is at least 55 years old and who has at
9-24 least 10 years of service credit as a commissioned peace officer
9-25 engaged in criminal law enforcement activities of the Department of
10-1 Public Safety, the Texas Alcoholic Beverage Commission, [the State
10-2 Purchasing and General Services Commission Capitol Area Security
10-3 Force,] the State Board of Pharmacy, or the Parks and Wildlife
10-4 Department, as an employee of the Railroad Commission of Texas who
10-5 is licensed by the Commission on Law Enforcement Officer Standards
10-6 and Education and has served at least five years as an investigator
10-7 for the oil field theft detection division, or as a custodial
10-8 officer, is eligible to retire and receive a service retirement
10-9 annuity.
10-10 SECTION 13. Subchapter B, Chapter 814, Government Code, is
10-11 amended by adding Section 814.1041 to read as follows:
10-12 Sec. 814.1041. TEMPORARY SERVICE RETIREMENT OPTION FOR
10-13 MEMBERS AFFECTED BY PRIVATIZATION OR OTHER REDUCTION IN WORKFORCE.
10-14 (a) This section applies only to members of the employee class
10-15 whose positions with the Texas Workforce Commission, the Texas
10-16 Department of Human Services, or the Texas Department of Mental
10-17 Health and Mental Retardation are eliminated as a result of
10-18 contracts with private service providers or other reductions in
10-19 services provided by those agencies and who separate from state
10-20 service at that time.
10-21 (b) A member described by Subsection (a) is eligible to
10-22 retire and receive a service retirement annuity if the member's age
10-23 and service credit, each increased by three years, would meet age
10-24 and service requirements for service retirement under Section
10-25 814.104(a) at the time the member separates from state service as
11-1 described by Subsection (a). The annuity of a person who retires
11-2 under this subsection is computed on the person's accrued service
11-3 credit increased by three years.
11-4 (c) A member described by Subsection (a) becomes eligible to
11-5 retire and receive a service retirement annuity on the date on
11-6 which the member would have met the age and service requirements
11-7 for service retirement under Section 814.104(a) had the member
11-8 remained employed by the state if, on the date of separation from
11-9 state service, the member's age and service credit, each increased
11-10 by five years, would meet age and service requirements for service
11-11 retirement under Section 814.104(a). The annuity of a person who
11-12 retires under this subsection is computed on the person's accrued
11-13 service credit.
11-14 (d) If a member described by Subsection (c) is reemployed by
11-15 the state before retirement, the time between the member's
11-16 separation from state service and reemployment may be used only to
11-17 compute eligibility for service retirement and may not be used to
11-18 compute the amount of any service retirement annuity.
11-19 (e) A member who applies to retire under this section and
11-20 the state agency from which the member separated from service shall
11-21 provide documentation required by the retirement system to
11-22 establish eligibility to retire under this section.
11-23 (f) This section applies only to positions eliminated by
11-24 privatization or other reductions in workforce before September 1,
11-25 1999.
12-1 SECTION 14. Subsection (a), Section 814.105, Government
12-2 Code, is amended to read as follows:
12-3 (a) Except as otherwise provided by this section, the
12-4 standard service retirement annuity for service credited in the
12-5 employee class of membership is an amount computed as the member's
12-6 average monthly compensation for service in that class for the 36
12-7 highest months of compensation multiplied by 2.25 [2] percent for
12-8 each year of service credit in that class.
12-9 SECTION 15. Subsection (a), Section 814.1081, Government
12-10 Code, is amended to read as follows:
12-11 (a) A person who retired and selected an optional service
12-12 retirement annuity approved by the board of trustees or an optional
12-13 service retirement annuity described by Section 814.108(c)(1) or
12-14 (c)(2)[, and who designated a person as beneficiary who was not at
12-15 the time of designation and is not currently the retiree's spouse
12-16 or child] may change the optional annuity selection to the
12-17 selection of a standard service retirement annuity by filing with
12-18 the retirement system a request to change the annuity selection, if
12-19 the retiree designated a person as beneficiary who:
12-20 (1) was not at the time of designation and is not
12-21 currently the retiree's spouse or child; or
12-22 (2) has executed since the designation a transfer and
12-23 release, approved by a court of competent jurisdiction pursuant to
12-24 a divorce decree, of the beneficiary's interest in the annuity and
12-25 is not currently the retiree's spouse or child.
13-1 SECTION 16. Subsection (d), Section 815.003, Government
13-2 Code, is amended to read as follows:
13-3 (d) The board shall hold elections for the members and
13-4 retirees to nominate and elect a trustee before August 31 [1] of
13-5 each odd-numbered year. The board shall make ballots available to
13-6 members of the retirement system and retirees and all votes must be
13-7 cast on those ballots.
13-8 SECTION 17. Subchapter B, Chapter 815, Government Code, is
13-9 amended by adding Section 815.106 to read as follows:
13-10 Sec. 815.106. INFORMATION TO LEGISLATURE. (a) The
13-11 retirement system may not use any money under its control to
13-12 influence the outcome of an election or to support the passage or
13-13 defeat of legislation.
13-14 (b) This section does not prohibit the board of trustees, as
13-15 fiduciaries of the trust fund and as trustees of other programs
13-16 administered by the board, or the officers or employees of the
13-17 retirement system, as designees of the board, from making
13-18 recommendations to the legislature concerning the actuarial
13-19 soundness of a retirement system administered by the board, the
13-20 fiscal or legal implications of proposed legislation, or statutory
13-21 changes designed to more efficiently administer and effectuate the
13-22 purposes of a retirement system or other program administered by
13-23 the board. In addition, the board or an officer or employee of the
13-24 retirement system may provide to a member of the legislature or a
13-25 legislative committee, at the request of the member or committee,
14-1 any factual information that is not made confidential by law.
14-2 SECTION 18. Subsection (b), Section 815.303, Government
14-3 Code, is amended to read as follows:
14-4 (b) To be eligible to lend securities under this section, a
14-5 bank or brokerage firm must:
14-6 (1) be experienced in the operation of a fully secured
14-7 securities loan program;
14-8 (2) maintain adequate capital in the prudent judgment
14-9 of the retirement system to assure the safety of the securities;
14-10 (3) execute an indemnification agreement satisfactory
14-11 in form and content to the retirement system fully indemnifying the
14-12 retirement system against loss resulting from borrower default in
14-13 its operation of a securities loan program for the system's
14-14 securities; and
14-15 (4) require any securities broker or dealer to whom it
14-16 lends securities belonging to the retirement system to deliver to
14-17 and maintain with the custodian collateral in the form of cash or
14-18 United States government securities in an amount equal to not less
14-19 than 100 percent of the market value, from time to time, of the
14-20 loaned securities.
14-21 SECTION 19. Section 815.307, Government Code, is amended to
14-22 read as follows:
14-23 Sec. 815.307. DUTY OF CARE. The assets of the retirement
14-24 system shall be invested and reinvested without distinction as to
14-25 their source in accordance with Section 67, Article XVI, Texas
15-1 Constitution. Investment decisions are subject to the standard
15-2 provided in the Texas Trust Code by Section 113.056(a), Property
15-3 Code. [In making investments for the retirement system, the board
15-4 of trustees or the executive director shall exercise the judgment
15-5 and care, under the circumstances prevailing at the time of the
15-6 investment, that persons of ordinary prudence, discretion, and
15-7 intelligence exercise in the management of their own affairs, not
15-8 in speculation but when making a permanent disposition of their
15-9 funds, considering the probable income from the disposition and the
15-10 probable safety of their capital.]
15-11 SECTION 20. Subsection (a), Section 815.403, Government
15-12 Code, is amended to read as follows:
15-13 (a) During each fiscal year, the state shall contribute to
15-14 the retirement system:
15-15 (1) an amount equal to 7.4 percent of the total
15-16 compensation of all members of the retirement system for that year;
15-17 (2) money to pay lump-sum death benefits for retirees
15-18 under Section 814.501;
15-19 (3) an amount for the law enforcement and custodial
15-20 officer supplemental retirement fund equal to 2.13 percent of the
15-21 aggregate state compensation of all custodial and law enforcement
15-22 officers for that year;
15-23 (4) money necessary for the administration of the law
15-24 enforcement and custodial officer supplemental retirement fund; and
15-25 (5) money for service credit not previously
16-1 established, as provided by Section 813.202(c) [813.202(e)] or
16-2 813.302(d).
16-3 SECTION 21. Subchapter F, Chapter 815, Government Code, is
16-4 amended by adding Section 815.5072 to read as follows:
16-5 Sec. 815.5072. EXCESS BENEFIT ARRANGEMENT. (a) A separate,
16-6 nonqualified, unfunded excess benefit arrangement is created
16-7 outside the trust fund of the retirement system. This excess
16-8 benefit arrangement shall be administered as a governmental excess
16-9 benefit arrangement under Section 415(m) of the Internal Revenue
16-10 Code of 1986 (26 U.S.C. Section 415(m)). The purpose of the excess
16-11 benefit arrangement is to pay to annuitants of the retirement
16-12 system benefits otherwise payable by the retirement system that
16-13 exceed the limitations on benefits imposed by Section 415(b)(1)(A)
16-14 of the Internal Revenue Code of 1986 (26 U.S.C. Section
16-15 415(b)(1)(A)).
16-16 (b) The board of trustees is responsible for the
16-17 administration of this arrangement. Except as otherwise provided
16-18 by this section, the board has the same rights, duties, and
16-19 responsibilities concerning the excess benefit arrangement as it
16-20 has to the trust fund.
16-21 (c) Benefits under this section are exempt from execution to
16-22 the same extent as provided by Section 811.005, except that the
16-23 benefits are completely unassignable. Contributions to this
16-24 arrangement are not held in trust and may not be commingled with
16-25 other funds of the retirement system.
17-1 (d) An annuitant is entitled to a monthly benefit under this
17-2 section in an amount equal to the amount by which the benefit
17-3 otherwise payable by the retirement system has been reduced by the
17-4 limitation on benefits imposed by Section 415(b)(1)(A) of the
17-5 Internal Revenue Code of 1986 (26 U.S.C. Section 415(b)(1)(A)).
17-6 The benefit payable by this arrangement is payable at the times and
17-7 in the form that the benefit payable under the trust fund is paid.
17-8 (e) The benefit payable under this section shall be paid
17-9 from state contributions that otherwise would be made to the trust
17-10 fund under Section 815.403. In lieu of deposit in the state
17-11 accumulation account, an amount determined by the retirement system
17-12 to be necessary to pay benefits under this section shall be paid
17-13 monthly to the credit of a dedicated account in the general revenue
17-14 fund maintained only for the excess benefit arrangement. The
17-15 account may include amounts needed to pay reasonable and necessary
17-16 expenses of administering this arrangement. The monthly amount to
17-17 be paid to the credit of the account shall be transferred to the
17-18 account at least 15 days before the date of a monthly disbursement
17-19 under this section.
17-20 (f) The board of trustees may adopt rules governing the
17-21 excess benefit arrangement that are necessary for the efficient
17-22 administration of the arrangement in compliance with Section 415(m)
17-23 of the Internal Revenue Code of 1986 (26 U.S.C. Section 415(m)).
17-24 SECTION 22. Subsection (a), Section 815.510, Government
17-25 Code, is amended to read as follows:
18-1 (a) The Employees Retirement System of Texas shall submit a
18-2 report not later than the 25th day of the month following the end
18-3 of each fiscal year to the governor, the lieutenant governor, the
18-4 speaker of the house of representatives, the executive director of
18-5 the State Pension Review Board, the appropriate oversight
18-6 committees of the house and senate, and the Legislative Budget
18-7 Board. The report shall include the following:
18-8 (1) the current end-of-fiscal-year market value of the
18-9 trust fund;
18-10 (2) [the current book value of the trust fund;]
18-11 [(3)] the asset allocations of the trust fund
18-12 expressed in percentages of stocks, fixed income, cash, or other
18-13 financial investments; and
18-14 (3) [(4)] the investment performance of the trust fund
18-15 utilizing accepted industry measurement standards.
18-16 SECTION 23. Subchapter F, Chapter 815, Government Code, is
18-17 amended by adding Section 815.512 to read as follows:
18-18 Sec. 815.512. PROTECTION FROM DOUBLE OR MULTIPLE LIABILITY.
18-19 The executive director may cause a suit concerning a claim to be
18-20 filed on behalf of the retirement system in a district court in
18-21 Travis County to protect the system from double or multiple
18-22 liability if the executive director determines that a claim may
18-23 expose the retirement system to such liability.
18-24 SECTION 24. (a) Annuities that are described by Section
18-25 814.107, 814.207, 814.305, or 814.601(a), Government Code, and are
19-1 based on service retirements, disability retirements, or deaths
19-2 that occurred or occur after August 31, 1996, but before September
19-3 1, 1997, are increased by 12.5 percent.
19-4 (b) The increase in annuities under Subsection (a) of this
19-5 section is payable beginning with the first monthly payments of the
19-6 annuities that become due after the effective date of this Act.
19-7 (c) Except as provided by Subsection (d) of this section,
19-8 the board of trustees of the Employees Retirement System of Texas
19-9 shall pay the increased annuities provided by this section from the
19-10 retirement annuity reserve account of the retirement system and may
19-11 transfer to that account from the state accumulation account of the
19-12 retirement system any portion of the amount that exceeds the amount
19-13 in the retirement annuity reserve account available to finance the
19-14 increases in benefits, and that is actuarially determined to be
19-15 necessary to finance the increases, for the duration of the
19-16 annuities to which the increases apply.
19-17 (d) The increase in benefits payable to a law enforcement or
19-18 custodial officer who retired before the age of 50 or for service
19-19 established under Section 813.509, Government Code, is payable from
19-20 the law enforcement and custodial officer supplemental retirement
19-21 fund.
19-22 (e) The increase provided by Subsection (a) of this section
19-23 shall be computed on the service percentage value described by
19-24 Section 814.105(a), Government Code.
19-25 SECTION 25. The board of trustees of the Employees
20-1 Retirement System of Texas shall authorize a supplemental payment
20-2 under Section 814.603(d), Government Code, to be made in the fiscal
20-3 year beginning September 1, 1997, if the conditions required by
20-4 that subsection are met.
20-5 SECTION 26. Subsection (d), Section 833.103, Government
20-6 Code, is amended to read as follows:
20-7 (d) A member may [not] establish one month of service credit
20-8 for each month or fraction of a month of duty, but not more than 48
20-9 months of service credit in the retirement system for military
20-10 service.
20-11 SECTION 27. Section 833.105, Government Code, is amended to
20-12 read as follows:
20-13 Sec. 833.105. ALTERNATIVE PAYMENTS TO ESTABLISH OR
20-14 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
20-15 rules to provide procedures for making installment payments to
20-16 establish or reestablish credit in the retirement system as
20-17 alternatives to lump-sum payments otherwise authorized or required
20-18 by this subtitle. The methods may include payment by payroll
20-19 deduction. [A member who is otherwise eligible may establish or
20-20 reestablish service creditable in the retirement system by making
20-21 payments as provided by this section in lieu of lump-sum payments
20-22 otherwise authorized or required by this subtitle.]
20-23 (b) Except as provided by Subsection (c), payments [A
20-24 payment authorized by this section consists of the contribution
20-25 required to establish or reestablish at least one year of service
21-1 credit, including any required interest and membership fees, except
21-2 that a person's last in a series of payments under this section may
21-3 be for a period of remaining service that is less than one year.]
21-4 [(c) The retirement system shall grant the applicable amount
21-5 of service credit after each payment is made under this section.]
21-6 [(d) Payments] may not be made under a rule adopted under
21-7 this section:
21-8 (1) to establish or reestablish service credit of a
21-9 person who has retired or died; or
21-10 (2) to establish current service under Section
21-11 833.101.
21-12 (c) Under a rule adopted under this section, the designated
21-13 beneficiary of a deceased member or, if none exists, the personal
21-14 representative of the decedent's estate may establish or
21-15 reestablish service for which the member was eligible at the time
21-16 of death if the establishment or reestablishment of the service
21-17 would result in the payment of a death benefit annuity.
21-18 (d) The payment for the establishment or reestablishment of
21-19 service under Subsection (c) must be made in a lump sum and
21-20 completed before the first payment of a death benefit annuity but
21-21 not later than the 60th day after the date the retirement system
21-22 receives notice of the death.
21-23 [(e) The retirement system may adopt rules to administer
21-24 this section.]
21-25 SECTION 28. Subchapter A, Chapter 834, Government Code, is
22-1 amended by adding Section 834.005 to read as follows:
22-2 Sec. 834.005. DISCLAIMER OF BENEFITS. The retirement system
22-3 shall give effect to a full or partial disclaimer of benefits
22-4 executed in accordance with Section 37A, Texas Probate Code, unless
22-5 the benefit to be disclaimed is a lifetime annuity.
22-6 SECTION 29. Subsection (a), Section 834.101, Government
22-7 Code, is amended to read as follows:
22-8 (a) A member is eligible to retire and receive a base
22-9 service retirement annuity if the member:
22-10 (1) is at least 65 years old, currently holds a
22-11 judicial office, and has at least 10 years of service credited in
22-12 the retirement system[, the most recently performed of which was
22-13 for a continuous period of at least one year];
22-14 (2) is at least 65 years old and has at least 12 years
22-15 of service[, continuous or otherwise,] credited in the retirement
22-16 system, regardless of whether the member currently holds a judicial
22-17 office; or
22-18 (3) has at least 20 years of service credited in the
22-19 retirement system, [the most recently performed of which was for a
22-20 continuous period of at least 10 years,] regardless of whether the
22-21 member currently holds a judicial office.
22-22 SECTION 30. Section 834.302, Government Code, is amended to
22-23 read as follows:
22-24 Sec. 834.302. SELECTION OF DEATH BENEFIT PLAN BY SURVIVOR OF
22-25 MEMBER. (a) If a member eligible to select a death benefit plan
23-1 under Section 834.301(a) dies without having made a selection or if
23-2 a selection cannot be made effective, the member's designated
23-3 beneficiary [surviving spouse] may select a plan in the same manner
23-4 as if the member had made the selection. If there is no designated
23-5 beneficiary [surviving spouse], the personal representative of the
23-6 decedent's estate may make the selection.
23-7 (b) If a person dies who meets the description in Section
23-8 814.302(b), the person's designated beneficiary [surviving spouse]
23-9 or the guardian of surviving minor children may select a death
23-10 benefit plan under that subsection.
23-11 SECTION 31. Subsection (d), Section 838.103, Government
23-12 Code, is amended to read as follows:
23-13 (d) A member may [not] establish one month of service credit
23-14 for each month or fraction of a month of duty, but not more than 48
23-15 months of service credit in the retirement system for military
23-16 service.
23-17 SECTION 32. Section 838.105, Government Code, is amended to
23-18 read as follows:
23-19 Sec. 838.105. ALTERNATIVE PAYMENTS TO ESTABLISH OR
23-20 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
23-21 rules to provide procedures for making installment payments to
23-22 establish or reestablish credit in the retirement system as
23-23 alternatives to lump-sum payments otherwise authorized or required
23-24 by this subtitle. The methods may include payment by payroll
23-25 deduction. [A member who is otherwise eligible may establish or
24-1 reestablish service creditable in the retirement system by making
24-2 payments as provided by this section in lieu of lump-sum payments
24-3 otherwise authorized or required by this subtitle.]
24-4 (b) Except as provided by Subsection (c), payments [A
24-5 payment authorized by this section consists of the contribution
24-6 required to establish or reestablish at least one year of service
24-7 credit, including any required interest and membership fees, except
24-8 that a person's last in a series of payments under this section may
24-9 be for a period of remaining service that is less than one year.]
24-10 [(c) The retirement system shall grant the applicable amount
24-11 of service credit after each payment is made under this section.]
24-12 [(d) Payments] may not be made under a rule adopted under
24-13 this section:
24-14 (1) to establish or reestablish service credit of a
24-15 person who has retired or died; or
24-16 (2) to establish current service under Section
24-17 838.101.
24-18 (c) Under a rule adopted under this section, the designated
24-19 beneficiary of a deceased member or, if none exists, the personal
24-20 representative of the decedent's estate may establish or
24-21 reestablish service for which the member was eligible at the time
24-22 of death if the establishment or reestablishment of the service
24-23 would result in the payment of a death benefit annuity.
24-24 (d) The payment for the establishment or reestablishment of
24-25 service under Subsection (c) must be made in a lump sum and
25-1 completed before the first payment of a death benefit annuity, but
25-2 not later than the 60th day after the date the retirement system
25-3 receives notice of the death.
25-4 [(e) The retirement system may adopt rules to administer
25-5 this section.]
25-6 SECTION 33. Subchapter A, Chapter 839, Government Code, is
25-7 amended by adding Section 839.004 to read as follows:
25-8 Sec. 839.004. DISCLAIMER OF BENEFITS. The retirement system
25-9 shall give effect to a full or partial disclaimer of benefits
25-10 executed in accordance with Section 37A, Texas Probate Code, unless
25-11 the benefit to be disclaimed is a lifetime annuity.
25-12 SECTION 34. Subsection (a), Section 839.101, Government
25-13 Code, is amended to read as follows:
25-14 (a) A member is eligible to retire and receive a service
25-15 retirement annuity if the member:
25-16 (1) is at least 65 years old, currently holds a
25-17 judicial office, and has at least 10 years of service credited in
25-18 the retirement system[, the most recently performed of which was
25-19 for a continuous period of at least one year];
25-20 (2) is at least 65 years old and has at least 12 years
25-21 of service[, continuous or otherwise,] credited in the retirement
25-22 system, regardless of whether the member currently holds a judicial
25-23 office; or
25-24 (3) has at least 20 years of service credited in the
25-25 retirement system, [the most recently performed of which was for a
26-1 continuous period of at least 10 years,] regardless of whether the
26-2 member currently holds a judicial office.
26-3 SECTION 35. Section 839.302, Government Code, is amended to
26-4 read as follows:
26-5 Sec. 839.302. SELECTION OF DEATH BENEFIT PLAN BY SURVIVOR OF
26-6 MEMBER. If a member eligible to select a death benefit plan under
26-7 Section 839.301 dies without having made a selection or if a plan
26-8 selected cannot be made effective, the member's designated
26-9 beneficiary [surviving spouse] may select a plan in the same manner
26-10 as if the member had made the selection. If there is no designated
26-11 beneficiary [surviving spouse], the personal representative of the
26-12 decedent's estate may make the selection.
26-13 SECTION 36. Subsection (b), Section 840.3012, Government
26-14 Code, is amended to read as follows:
26-15 (b) To be eligible to lend securities under this section, a
26-16 bank or brokerage firm must:
26-17 (1) be experienced in the operation of a fully secured
26-18 securities loan program;
26-19 (2) maintain adequate capital in the prudent judgment
26-20 of the retirement system to assure the safety of the securities;
26-21 (3) execute an indemnification agreement satisfactory
26-22 in form and content to the retirement system fully indemnifying the
26-23 retirement system against loss resulting from borrower default in
26-24 its operation of a securities loan program for the system's
26-25 securities; and
27-1 (4) require any securities broker or dealer to whom it
27-2 lends securities belonging to the retirement system to deliver to
27-3 and maintain with the custodian collateral in the form of cash or
27-4 United States government securities in an amount equal to not less
27-5 than 100 percent of the market value, from time to time, of the
27-6 loaned securities.
27-7 SECTION 37. Section 840.303, Government Code, is amended to
27-8 read as follows:
27-9 Sec. 840.303. DUTY OF CARE. The assets of the retirement
27-10 system shall be invested and reinvested without distinction as to
27-11 their source in accordance with Section 67, Article XVI, Texas
27-12 Constitution. Investment decisions are subject to the standard
27-13 provided in the Texas Trust Code by Section 113.056(a), Property
27-14 Code. [In making investments for the retirement system, the board
27-15 of trustees shall exercise the judgment and care, under the
27-16 circumstances prevailing at the time of the investment, that
27-17 persons of ordinary prudence, discretion, and intelligence exercise
27-18 in the management of their own affairs, not in speculation but when
27-19 making a permanent disposition of their funds, considering the
27-20 probable income from the disposition and the probable safety of
27-21 their capital.]
27-22 SECTION 38. Section 609.009, Government Code, is amended to
27-23 read as follows:
27-24 Sec. 609.009. TRUST FOR [OWNERSHIP UNDER] 457 PLAN. An
27-25 employee's deferred amounts and investment income under a 457 plan
28-1 and the qualified investment products in which the amounts are
28-2 invested are held in trust for the exclusive benefit of
28-3 participants and their beneficiaries in accordance with Section 457
28-4 of the Internal Revenue Code of 1986 (26 U.S.C. Section 457). For
28-5 purposes of this section, custodial accounts and contracts
28-6 described by Section 457 are treated as trusts. A trust does not
28-7 have to be established before January 1, 1999, for a 457 plan in
28-8 existence on August 20, 1996 [the property of the employing
28-9 political subdivision or state agency, as appropriate, until the
28-10 deferred amounts and investment income are distributed to the
28-11 employee].
28-12 SECTION 39. Subsections (a) and (b), Section 609.502,
28-13 Government Code, are amended to read as follows:
28-14 (a) The board of trustees of the Employees Retirement System
28-15 of Texas is the trustee and the plan administrator of a 401(k) plan
28-16 known as TexaSaver established under this subchapter.
28-17 (b) The board of trustees is the trustee and the plan
28-18 administrator of a 457 plan established under this subchapter.
28-19 SECTION 40. Subsection (b), Section 609.509, Government
28-20 Code, is amended to read as follows:
28-21 (b) In a contract under Subsection (a), the board of
28-22 trustees may provide for the board to audit periodically the person
28-23 with whom the contract is made. The audit may cover:
28-24 (1) the proper handling and accounting of state or
28-25 trust funds; and
29-1 (2) other matters related to the proper performance of
29-2 the contract.
29-3 SECTION 41. Subsection (b), Section 609.512, Government
29-4 Code, is amended to read as follows:
29-5 (b) The deferred compensation trust fund is in the state
29-6 treasury. The fund is for the benefit of the deferred compensation
29-7 plan described by Section 609.502(b) [609.502(a)].
29-8 SECTION 42. Subdivisions (2), (8), and (9), Subsection (a),
29-9 Section 3, Texas Employees Uniform Group Insurance Benefits Act
29-10 (Article 3.50-2, Vernon's Texas Insurance Code), are amended to
29-11 read as follows:
29-12 (2) "Annuitant" shall mean an officer or employee who
29-13 has at least three years of service as an eligible employee with a
29-14 department whose employees are authorized to participate in the
29-15 Texas employees uniform group insurance benefits program and who
29-16 retires under:
29-17 (A) the jurisdiction of the Employees Retirement
29-18 System of Texas and either receives an annuity or is eligible to
29-19 receive an annuity, pursuant to Subtitle B, D, or E of Title 8,
29-20 Government Code, or Chapter 803, Government Code, that is based on
29-21 at least 10 years of service credit or eligibility under Section
29-22 814.002 or 814.102, Government Code;
29-23 (B) the jurisdiction of the Teacher Retirement
29-24 System of Texas and either receives an annuity or is eligible to
29-25 receive an annuity, pursuant to Subtitle C, Title 8, Government
30-1 Code, or Chapter 803, Government Code, that is based on at least 10
30-2 years of service credit, whose last state employment prior to
30-3 retirement, including employment by a public community/junior
30-4 college, was as an employee of a department whose employees are
30-5 authorized to participate in the Texas employees uniform group
30-6 insurance program;
30-7 (C) the optional retirement program established
30-8 by Chapter 830, Government Code, and either receives an annuity or
30-9 is eligible to receive an annuity under that program, if the
30-10 [person's last state employment before retirement, including
30-11 employment by a public community/junior college, was as an employee
30-12 of a department whose employees are authorized to participate in
30-13 the Texas employees uniform group insurance program and if the]
30-14 person either:
30-15 (i) would have been eligible to retire and
30-16 receive a service retirement annuity from the Teacher Retirement
30-17 System of Texas or the Employees Retirement System of Texas based
30-18 on at least 10 years of service credit had the person not elected
30-19 to participate in the optional retirement program; or
30-20 (ii) is disabled as determined by the
30-21 Employees Retirement System of Texas; or
30-22 (D) any other federal or state statutory
30-23 retirement program to which an institution of higher education has
30-24 made employer contributions, if the employee has met service
30-25 requirements, age requirements, and other applicable requirements
31-1 comparable to the requirements for retirement under the Teacher
31-2 Retirement System of Texas, based on at least 10 years of service
31-3 credit.
31-4 (8) "Dependent" shall mean the spouse of an employee
31-5 or retired employee and:
31-6 (A) an unmarried child under 25 years of age,
31-7 including[: (A)] an adopted child and [(B)] a stepchild, foster
31-8 child, or other child who is in a regular parent-child
31-9 relationship;
31-10 (B) [and (C)] any such child, regardless of age,
31-11 who lives with or whose care is provided by an employee or
31-12 annuitant on a regular basis if such child is mentally retarded or
31-13 physically incapacitated to such an extent as to be dependent upon
31-14 the employee or retired employee for care or support, as the
31-15 trustee shall determine; and
31-16 (C) any such child who is unmarried, regardless
31-17 of age, for purposes of health benefits coverage under this Act, on
31-18 expiration of the child's continuation coverage under the
31-19 Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L.
31-20 99-272).
31-21 (9) "Qualified carrier" shall mean:
31-22 (A) any insurance company authorized to do
31-23 business in this state by the Texas Department [State Board] of
31-24 Insurance to provide any of the types of insurance coverages,
31-25 benefits, or services provided for in this Act under any of the
32-1 insurance laws of the State of Texas, which has a surplus of $1
32-2 million, a successful operating history, and which has had
32-3 successful experience in providing and servicing any of the types
32-4 of group coverage provided for in this Act as determined by the
32-5 Texas Department [State Board] of Insurance;
32-6 (B) any corporation operating under Chapter 20
32-7 of the Insurance Code or under the Texas Health Maintenance
32-8 Organization Act (Chapter 20A, Vernon's Texas Insurance Code) which
32-9 provides any of the types of coverage, benefits, or services
32-10 provided for in this Act, a successful operating history, and which
32-11 has had successful experience in providing and servicing any of the
32-12 types of group coverage provided for in this Act as determined by
32-13 the Texas Department [State Board] of Insurance; or
32-14 (C) any combination or carriers as herein
32-15 defined, upon such terms and conditions as may be prescribed by the
32-16 trustee, providing, however, that for purposes of this Act carriers
32-17 combining for the purpose of bidding and/or underwriting this
32-18 program shall not be considered in violation of Sections 15.01
32-19 through 15.34, Chapter 15, Title 2, Competition and Trade
32-20 Practices, Texas Business & Commerce Code.
32-21 SECTION 43. (a) Subsection (e), Section 4B, Texas Employees
32-22 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
32-23 Texas Insurance Code), as added by Chapter 242, Acts of the 72nd
32-24 Legislature, Regular Session, 1991, is amended to read as follows:
32-25 (e) The trustee may delegate [the duties of the executive
33-1 director under this section to another employee of the Employees
33-2 Retirement System of Texas and may delegate] its duties to hear
33-3 appeals to the executive director.
33-4 (b) Subsection (e), Section 4B, Texas Employees Uniform
33-5 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
33-6 Insurance Code), as added by Chapter 391, Acts of the 72nd
33-7 Legislature, Regular Session, 1991, is redesignated as Subsection
33-8 (f) of Section 4B to read as follows:
33-9 (f) [(e)] The executive director may delegate the duties of
33-10 the executive director under this section to another person who is
33-11 employed by the Employees Retirement System of Texas.
33-12 SECTION 44. Subsection (a), Section 4C, Texas Employees
33-13 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
33-14 Texas Insurance Code), is amended to read as follows:
33-15 (a) The trustee may develop a system for an employee[,
33-16 school district employee,] or annuitant to electronically
33-17 authorize:
33-18 (1) enrollment in a coverage or benefit program;
33-19 (2) contributions to a coverage or benefit program;
33-20 and
33-21 (3) deductions or reductions to the compensation or
33-22 annuity of the employee[, school district employee,] or annuitant
33-23 for participation in a coverage or benefit program.
33-24 SECTION 45. Subsections (b), (h), (i), and (j), Section 5,
33-25 Texas Employees Uniform Group Insurance Benefits Act (Article
34-1 3.50-2, Vernon's Texas Insurance Code), are amended to read as
34-2 follows:
34-3 (b) In the event the trustee shall select a [as the] carrier
34-4 [one] whose bid was not the lowest of all bids submitted, such
34-5 selection shall be submitted together with justifications and
34-6 reasons therefor to the commissioner of insurance [State Board of
34-7 Insurance]. Such deviating selection shall not be deemed final and
34-8 binding unless and until the commissioner of insurance [a majority
34-9 of the State Board of Insurance] has certified [its] approval in
34-10 writing to the trustee, or upon the expiration of 30 days after
34-11 receipt thereof by the commissioner [State Board of Insurance] such
34-12 deviating selection shall be deemed approved.
34-13 (h) In the event the trustee determines that benefits shall
34-14 be provided from the Employees Life, Accident, and Health Insurance
34-15 and Benefits Fund, the trustee may contract with one or more [a]
34-16 qualified and experienced administering firms [firm] on a
34-17 competitive bid basis to administer the plans of coverage [claims
34-18 arising from the coverages] provided in Section 5 of the Act.
34-19 (i) The trustee shall select one or more [the desired]
34-20 administering firms [firm] to provide services which shall be in
34-21 the best interests of the employees covered by the Act. The
34-22 trustee is not required to select the lowest bid but shall take
34-23 into consideration such other factors as ability to service large
34-24 group programs, past experience, and other relevant criteria.
34-25 Should the trustee select a firm whose bid was not the lowest or
35-1 one whose bid differs from that specified, the reasons for such
35-2 action shall be fully justified and explained in the minutes of the
35-3 next meeting of the trustee.
35-4 (j) The trustee may not contract for or provide a plan of
35-5 [group] coverage [or with a health maintenance organization or
35-6 provide coverage directly from the fund] that:
35-7 (1) excludes or limits coverage or services for
35-8 acquired immune deficiency syndrome, as defined by the Centers for
35-9 Disease Control of the United States Public Health Service, or
35-10 human immunodeficiency virus infection; or
35-11 (2) provides coverage for serious mental illness that
35-12 is less extensive than the coverage provided for any [other]
35-13 physical illness.
35-14 SECTION 46. Subsection (a), Section 5A, Texas Employees
35-15 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
35-16 Texas Insurance Code), is amended to read as follows:
35-17 (a) The trustee may define the basic coverage in which every
35-18 full-time employee and every annuitant participates unless
35-19 participation is specifically waived. The trustee may define
35-20 different basic coverage plans for active full-time employees and
35-21 for annuitants. Basic coverage must include basic health coverage.
35-22 Basic health coverage may be offered through any health benefits
35-23 plan. [Basic coverage shall include, but not be limited to,
35-24 benefits and health care service required by state and federal
35-25 law.]
36-1 SECTION 47. Section 9, Texas Employees Uniform Group
36-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
36-3 Code), is amended to read as follows:
36-4 Sec. 9. ANNUAL ACCOUNTING; SPECIAL CONTINGENCY RESERVE.
36-5 (a) A carrier [Carriers] providing any policy purchased under this
36-6 Act shall provide an accounting to the trustee not later than 90
36-7 days after the end of each policy year. The accounting shall set
36-8 forth, in a form approved by the trustee:
36-9 (1) the amounts of premiums actually accrued under the
36-10 policy from its date of issue to the end of the policy year;
36-11 (2) the total of all mortality and other claims,
36-12 charges, losses, costs, and expenses incurred for that period; and
36-13 (3) the amounts of the carrier's [insurers'] allowance
36-14 for a reasonable profit and contingencies for that period.
36-15 (b) An excess of the total of Subdivision (a)(1) of this
36-16 section over the sum of Subdivisions (a)(2) and (a)(3) of this
36-17 section shall be held by the carrier issuing a participating [the]
36-18 policy as a special contingency reserve to be used by the carrier
36-19 only for charges, claims, costs, and expenses under the policy.
36-20 The reserve shall bear interest at a rate determined in advance of
36-21 each policy year by the carrier and approved by the trustee as
36-22 being consistent with the rates generally used by the carrier for
36-23 similar funds held under other group insurance policies. When the
36-24 trustee determines that the special contingency reserve has
36-25 attained an amount estimated by it to make satisfactory provision
37-1 for adverse fluctuations in future charges, claims, costs, or
37-2 expenses under the policy, any further excess shall be deposited in
37-3 the State Treasury to the credit of the Employees Life, Accident,
37-4 and Health Insurance and Benefits Fund. When a policy is
37-5 discontinued, any balance remaining in the special contingency
37-6 reserve after all charges have been made shall be deposited in the
37-7 State Treasury to the credit of the fund. The carrier may make the
37-8 deposit in equal monthly installments over a period of not more
37-9 than two years.
37-10 SECTION 48. Subsection (b), Section 10, Texas Employees
37-11 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
37-12 Texas Insurance Code), is amended to read as follows:
37-13 (b) Policies [Exemption from Taxes on Premiums. Premiums or
37-14 contributions on policies], insurance contracts, certificates of
37-15 coverage, evidence of coverage, and agreements with health
37-16 maintenance organizations and plan administrators, or any other
37-17 coverages established under this Act, [or other coverages] shall
37-18 not be subject to any state tax, regulatory fee, or surcharge,
37-19 including premium or maintenance taxes or fees.
37-20 SECTION 49. Section 11, Texas Employees Uniform Group
37-21 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
37-22 Code), is amended by adding Subsections (d) and (e) to read as
37-23 follows:
37-24 (d) In addition to the authority granted under Article
37-25 3.50-6, Insurance Code, the trustee may adopt rules to provide for
38-1 payment of accelerated life insurance benefits to a terminally ill,
38-2 terminally injured, or permanently disabled participant in amounts
38-3 that benefit the participants without increasing the cost of
38-4 providing the benefits. The amount of any payment of an
38-5 accelerated benefit under rules adopted under this subsection must
38-6 be deducted from the amount that would otherwise be payable as a
38-7 death benefit.
38-8 (e)(1) In addition to retiree basic term life insurance
38-9 coverage, a participant in the optional group term life insurance
38-10 program may maintain optional term life insurance coverage after
38-11 retirement. The trustee may adopt rules for the implementation and
38-12 administration of this subsection.
38-13 (2) A participant may maintain after retirement the
38-14 amount of optional term life insurance coverage on the
38-15 participant's life on the date of retirement, not to exceed two
38-16 times the participant's annual salary on the last September 1
38-17 before retirement and subject to benefit reduction factors based on
38-18 age as determined by the trustee. The trustee shall determine the
38-19 rate for retiree optional term life insurance coverage. The rate
38-20 must be comparable to the rate for optional term life insurance
38-21 coverage for an active employee of the same age. Alternatively, a
38-22 retiree may choose another minimum optional term life insurance
38-23 coverage amount not subject to benefit reduction factors based on
38-24 age, with a coverage amount and premium rate determined by the
38-25 trustee.
39-1 (3) A retiree participating in optional term life
39-2 insurance coverage is not eligible for premium-waived extended
39-3 insurance benefits or accelerated life insurance benefits if the
39-4 total disability or terminal condition, respectively, begins after
39-5 the date of retirement. Accidental death and dismemberment
39-6 insurance coverage ceases on the date of retirement, regardless of
39-7 age.
39-8 (4) A participant who retired on or after December 31,
39-9 1995, but before September 1, 1997, and who elected at the time of
39-10 retirement to continue the maximum optional term life insurance
39-11 amount available to a retiree at the time, may reinstate,
39-12 prospectively, the level of optional group term life insurance in
39-13 force on the participant's life immediately before the
39-14 participant's retirement, not to exceed the maximum coverage set
39-15 for retirees in Subdivision (2) of this subsection. This
39-16 subdivision expires December 31, 1997.
39-17 SECTION 50. Section 12, Texas Employees Uniform Group
39-18 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
39-19 Code), is amended by adding Subsection (e) to read as follows:
39-20 (e) The trustee shall give effect to a full or partial
39-21 disclaimer of benefits executed in accordance with Section 37A,
39-22 Texas Probate Code.
39-23 SECTION 51. Subsections (b) and (c), Section 13, Texas
39-24 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
39-25 Vernon's Texas Insurance Code), are amended to read as follows:
40-1 (b) Unless participation is waived specifically or unless an
40-2 employee or employee-annuitant is expelled from the program under
40-3 Section 13A of this Act, every full-time employee except one who is
40-4 described by Section 3(a)(5)(A)(x) of this Act shall be covered
40-5 automatically by the basic plan for active full-time employees and
40-6 every employee-annuitant shall be covered by the basic plan for
40-7 retired employee-annuitants. Coverage shall begin on the date he
40-8 becomes eligible, and each policy of insurance purchased by the
40-9 trustee shall provide for such automatic coverage.
40-10 (c) Unless expelled from the program under Section 13A of
40-11 this Act, each part-time employee and each employee of an
40-12 institution of higher education who is described by Section
40-13 3(a)(5)(A)(x) [3(a)(5)(A)(viii)] of this Act is eligible for
40-14 participation in the group programs provided under this Act upon
40-15 execution of appropriate application for coverage [payroll
40-16 deduction authorization for the required payment of premiums]. An
40-17 institution of higher education shall, at the time of employment,
40-18 notify each employee of the institution who is described by Section
40-19 3(a)(5)(A)(x) [3(a)(5)(A)(viii)] of this Act of the employee's
40-20 eligibility to participate in the group programs provided under
40-21 this Act.
40-22 SECTION 52. Subsection (f), Section 13A, Texas Employees
40-23 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
40-24 Texas Insurance Code), is amended to read as follows:
40-25 (f) An employee, annuitant, or dependent expelled from the
41-1 Texas employees uniform group insurance program may not participate
41-2 in any [a health maintenance organization or be insured under any
41-3 insurance or benefits] plan of coverage offered by the program for
41-4 a period determined by the trustee of not more than five years from
41-5 the date the expulsion from the program takes effect.
41-6 SECTION 53. Subsections (b), (c), and (d), Section 15, Texas
41-7 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
41-8 Vernon's Texas Insurance Code), are amended to read as follows:
41-9 (b) The state shall contribute to the cost of each
41-10 employee's individual and dependent group coverages the amounts
41-11 appropriated for the coverages in the General Appropriations Act.
41-12 The governing board of each state department and institution of
41-13 higher education participating in the program established under
41-14 this Act shall pay the trustee a like amount for each employee's
41-15 individual or dependent group coverages for their employees who
41-16 are, and retirees who were, compensated from funds not
41-17 appropriated in the General Appropriations Act. The departments
41-18 and institutions shall include the required contributions from
41-19 funds not appropriated in the General Appropriations Act in their
41-20 annual operating budgets. Each state department and institution of
41-21 higher education participating in the program shall assure current
41-22 participant coverages based on the records of the trustee, make
41-23 timely payments of amounts due the trustee from all fund sources
41-24 under the control of the department or institution, and reconcile
41-25 trustee and agency records of coverages and payments monthly.
42-1 There [From and after the effective date of this Act, there] is
42-2 hereby allocated [and appropriated] to the trustee, in accordance
42-3 with the provisions of this Act, from the several funds from which
42-4 [state] employees receive their respective salaries, a sum equal to
42-5 the total of all employer contributions computed in accordance with
42-6 the provisions of this Act and the rules and regulations of the
42-7 trustee promulgated pursuant thereto.
42-8 (c) All money hereby allocated [and appropriated] by the
42-9 state, including institutions of higher education, to the trustee
42-10 under this Act shall be paid to the trustee in monthly installments
42-11 based on the annual estimate by the trustee of the contributions to
42-12 be received for all [state] employees during said year; provided,
42-13 however, that in the event said estimate of the contributions of
42-14 the [state] employees shall vary from the actual amount of the
42-15 employer contributions during the year, such adjustments shall be
42-16 made at the close of each fiscal year as may be required. Each of
42-17 said monthly installments shall be paid into the appropriate fund
42-18 created by this Act in the amount certified by the trustee.
42-19 (d) The trustee shall certify to the governing boards of
42-20 those state departments and institutions of higher education
42-21 participating in the program established under this Act who provide
42-22 contributions for their employees' individual and dependent
42-23 coverages [employees] from operating budgets provided from sources
42-24 other than the General Appropriations Act the proportionate amounts
42-25 required [needed] to pay their respective contributions. Such
43-1 certifications shall be made at least 30 days prior to the meeting
43-2 at which the governing board adopts its operating budget.
43-3 SECTION 54. Subsections (a) and (b), Section 18, Texas
43-4 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
43-5 Vernon's Texas Insurance Code), are amended to read as follows:
43-6 (a) The group benefits advisory committee is composed of 26
43-7 [27] voting members as provided by this section. The office of the
43-8 attorney general, [the office of the state treasurer,] the office
43-9 of the comptroller, the Railroad Commission of Texas, the General
43-10 Land Office, and the Department of Agriculture are entitled to be
43-11 represented by one member each on the committee, who may be
43-12 appointed by the governing body of the state agency or elected by
43-13 and from the employees of the agency, as determined by rule by the
43-14 governing body of the agency. One employee shall be elected from
43-15 each of the remaining eight largest state agencies that are
43-16 governed by appointed officers by and from the employees of those
43-17 agencies. One nonvoting member shall be the executive director of
43-18 the Employees Retirement System of Texas. One member shall be an
43-19 expert in employee benefit issues from the private sector,
43-20 appointed by the governor. One member shall be an expert in
43-21 employee benefits issues from the private sector, appointed by the
43-22 lieutenant governor. One member shall be a retired state employee
43-23 appointed by the trustee. One member shall be a state employee of
43-24 a state agency other than one of the eight largest state agencies,
43-25 appointed by the trustee. Not more than one employee from a
44-1 particular state agency may serve on the committee. Each of the
44-2 seven largest institutions of higher education, as determined by
44-3 the number of employees on the payroll of an institution, shall
44-4 elect one member of the committee from among persons who have each
44-5 been nominated by a petition signed by at least 300 employees. Two
44-6 members shall be employees of institutions of higher education,
44-7 other than the seven largest institutions of higher education, who
44-8 are appointed by the Texas Higher Education Coordinating Board, but
44-9 not more than one employee shall be from any one institution. The
44-10 members shall elect a presiding officer from their membership to
44-11 serve a one-year term.
44-12 (b) All members of the committee shall be appointed or
44-13 elected for three-year terms. During a term of appointment or
44-14 election, state employee vacancies shall be filled by an employee
44-15 of the same agency from which the vacancy occurred[, being]
44-16 appointed by the governing body of the agency or institution
44-17 [trustees] for the balance of the vacated term. A vacancy in a
44-18 position held by a member of the private sector shall be filled by
44-19 the officer who originally made the appointment to that position.
44-20 SECTION 55. Section 19, Texas Employees Uniform Group
44-21 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
44-22 Code), is amended by amending Subsection (a) and adding Subsection
44-23 (d) to read as follows:
44-24 (a) Any employee or annuitant shall be entitled to secure
44-25 for his dependents any uniform group coverages provided for
45-1 employees under this Act, as shall be determined by the trustee,
45-2 except that a foster child is eligible for health insurance
45-3 coverage only if the child is not covered by another governmental
45-4 health program. If an employee or annuitant resides outside of a
45-5 health maintenance organization service area, the uniform group
45-6 coverages must be made available to a dependent without evidence of
45-7 insurability if the employee or annuitant applies for the coverage
45-8 for the dependent during the annual enrollment period. Payments
45-9 required of the employee in excess of employer contributions shall
45-10 be deducted from the monthly pay of the employee or from his
45-11 retirement benefits, or the employee's salary shall be reduced in
45-12 the appropriate amount, in such manner and form as the trustee
45-13 shall determine.
45-14 (d) A dependent child who is unmarried and whose coverage
45-15 under this Act ceases when the child reaches the age of 25 may, on
45-16 expiration of continuation coverage under the Consolidated Omnibus
45-17 Budget Reconciliation Act of 1985 (Pub. L. 99-272), reinstate
45-18 health benefits coverage under this Act if the child, or the
45-19 child's participating parent, pays the full cost of the health
45-20 benefits coverage. A state contribution is not payable for
45-21 coverage described by this subsection. Coverage under this
45-22 subsection ceases at the end of the month in which the child
45-23 marries.
45-24 SECTION 56. (a) Sections 803.403, 813.105, 833.106,
45-25 838.103(i), and 838.106, Government Code, are repealed.
46-1 (b) Subsection (e), Section 5, Texas Employees Uniform Group
46-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
46-3 Code), is repealed.
46-4 SECTION 57. (a) The change in law made by this Act in
46-5 Sections 811.001(9) and 814.104(b), Government Code, is intended to
46-6 reflect the current law providing for the commissioning and
46-7 administration of the Capitol area security force by the Department
46-8 of Public Safety. Service credit previously accrued by a member of
46-9 the Capitol area security force as a commissioned law enforcement
46-10 officer of the General Services Commission, or a predecessor
46-11 agency, remains credited as service by a law enforcement officer
46-12 unless canceled as otherwise provided by Subtitle B, Title 8,
46-13 Government Code.
46-14 (b) An employee of the Texas Education Agency whose
46-15 membership was transferred from the Teacher Retirement System of
46-16 Texas to the Employees Retirement System of Texas under Section 43,
46-17 Chapter 812, Acts of the 73rd Legislature, 1993, who was a retiree
46-18 of the Employees Retirement System of Texas at the time of the
46-19 transfer and who continued to make contributions to the Teacher
46-20 Retirement System of Texas after the transfer may remain as a
46-21 member of the Teacher Retirement System of Texas exempt from the
46-22 transfer that occurred in 1993.
46-23 SECTION 58. This Act takes effect September 1, 1997.
46-24 SECTION 59. The importance of this legislation and the
46-25 crowded condition of the calendars in both houses create an
47-1 emergency and an imperative public necessity that the
47-2 constitutional rule requiring bills to be read on three several
47-3 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1102 passed the Senate on
April 18, 1997, by a viva-voce vote; and that the Senate concurred
in House amendments on May 28, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1102 passed the House, with
amendments, on May 25, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor