HBA-ATS H.B. 784 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 784 By: Walker Pensions and Investments 2/23/1999 Introduced BACKGROUND AND PURPOSE The standard service retirement annuity for a public school teacher is computed using the following two-step formula. Step one involves the multiplication of the years of service credit by two percent. Step two involves the multiplication of the average of a teacher's three highest years of salary, whether or not consecutive, by the number from step one. A similar formula is used to calculate the standard service retirement annuity for a state employee, except that the years of service credit are multiplied by 2.25 percent instead of two percent. The discrepancy between multiplier percentages is the result of overpayment into the Employees Retirement System of Texas. Public school educators feel that the multiplier percentage used to calculate their annuities should equal the multiplier percentages used to calculate the annuities of state employees, given that salary schedules for public school teachers offer no additional benefits beyond twenty years of service. H.B. 784 establishes a new formula to compute the standard service retirement annuity payable for a member who has at least 20 years of credit service as a teacher, by increasing the multiplier percentage from two percent to 2.25 percent. This bill also defines who is a "teacher" eligible to benefit from the new formula. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 824.203, Government Code, by amending Subsection (a) and adding Subsection (f), as follows: (a) Includes Subsection (f) among the subsections that provide exceptions to the operation of Subsection (a). Makes a nonsubstantive change. (f) Defines "teacher" for purposes of this subsection. Establishes the formula used to compute the standard service retirement annuity payable for a member who has at least 20 years of credit service as a teacher. Provides that if the member is a teacher immediately before retirement, service credit for state personal or sick leave under Section 823.403 (Credit for Accumulated Personal or Sick Leave) is service credit as a teacher, for purposes of this subsection. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause.