SRC-JXG S.B. 998 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 998
76R8664 GJH-FBy: Brown
Intergovernmental Relations
3/23/1999
As Filed


DIGEST 

Currently, Houston is the only city in Texas with a population greater than
1,600,000. In 1997, the 75th Legislature repealed Article 6243e2, V.T.C.S.,
and created Article 6243e.2(1), V.T.C.S., to benefit the City of Houston
Firefighters' Relief and Retirement Fund Board of Trustees (board), which
had independent statutory authority. Article 6243e.2(1), V.T.C.S.,
established and governed a pension fund for firefighters in cities with a
population of no less than 1,200,000. At that time, Houston was the only
city in Texas that met the population requirement. The Houston firefighter
fund continued to be the only fund governed by Article 6243e.2(1) until its
repeal. S.B. 998 would increase the benefits firefighters or their
beneficiaries are entitled to receive, and would change the operation of
the board of trustees. 
  
PURPOSE

As proposed, S.B. 998 increases benefits for firefighters or their
beneficiaries, and changes the operation of the Firefighters' Relief and
Retirement Fund Board of Trustees. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Firefighters' Relief and Retirement
Fund Board of Trustees in SECTION 9 (Section 10A(c), V.T.C.S.) of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 1(11), Article 6243e.2(1), V.T.C.S., to redefine
"firefighter." 

SECTION 2. Amends Section 2(l), Article 6243e.2(l), V.T.C.S., to require a
municipality to allow municipal employees who are trustees of the
Firefighters' Relief and Retirement Fund Board of Trustees (board) to
promptly attend all board and committee meetings. Requires each board
trustee who is an employee of the municipality to provide the municipality
with reasonable notice of the trustee's required attendance at regularly
scheduled board and committee meetings. Requires the municipality to allow
board trustees the time required to travel to and attend educational
workshops and legislative hearings and meetings regarding proposed
amendments to this article, if attendance is consistent with a board
trustee's duty to the board. Prohibits the municipality from using the
trustee's attendance or travel related to attendance described by this
subsection to reduce or withhold the wages that the trustee would otherwise
earn. Authorizes the board to reimburse from the fund the municipality for
costs incurred by the municipality for allowing a trustee's attendance
under this subsection. 

SECTION 3. Amends Section 3, Article 6243e.2(1), V.T.C.S., by adding
Subsections (h) and (i), as follows: 

(h) Authorizes the board to purchase with board funds a life insurance
policy from an insurer licensed to do business in this state to cover the
amount of lump-sum death benefits that may become payable to a member's
eligible survivor or estate. Prohibits the amount payable under a policy
under this subsection on the death of one member from exceeding the amount
of the lump-sum death benefits payable under this article. Requires the
board to be the policyholder of any life insurance purchased under this
subsection and to use any proceeds received from the insurer to satisfy any
lump-sum death benefits owed under this article. 
 
(i) Authorizes the board to pay with fund assets the reasonable expenses
incurred in providing  annual or semiannual meetings of retired members,
spouses of retired members, and eligible survivors that facilitate
communication regarding benefits paid under this article, if the expenses
do not materially affect the total assets of the fund. Authorizes
reasonable expenses to include the purchase of items or services necessary
to promote and facilitate these meetings. 

SECTION 4. Amends Section 4, Article 6243e.2(1), V.T.C.S., to delete
existing Subsections (d) and (f) regarding benefits. Makes a conforming
change. 

SECTION 5. Amends Section 5, Article 6243e.2(1), V.T.C.S., to provide that
an election to participate in the Deferred Retirement Option Plan (DROP),
once approved by the board, is irrevocable, except as provided by
Subsection (1), rather than (n), of this section. Prohibits subsequent
deductions from the member's salary under Section 13(c) of this article
from being credited to the member's DROP account and from increasing any
benefit payable from the fund for the member's service, if a DROP
participant remains in active service after the seventh, rather than fifth,
anniversary of the effective date of the member's DROP election. Requires
an election by a member concerning single lump-sum, rather than
installment, or partial payments as provided by Subsection (e) or (f) to
satisfy certain requirements. Provides that a member who has made a DROP
election is not classified as retired, eligible to be paid, or eligible to
accrue or to receive any benefit that is accrued or received by a member
who has terminated active service or by the eligible survivors of deceased
members, unless the member who has made the DROP election has terminated
active service. Redesignates existing Subsections (h)-(p) as Subsections
(g)-(o). Deletes text regarding a member's DROP account, and provisions of
Subsections (h) and (i). Makes conforming changes.  

SECTION 6. Amends Section 6(d), Article 6243e.2(1), V.T.C.S., to provide
that the pension amount that shall be used to determine the death benefit
payable with respect to that member, if a full-time active member with at
least six years of service becomes disabled or dies from heart or lung
disease or cancer and the amount of the disability benefit is presumed to
constitute unless the presumption is rebutted. Authorizes the on-duty
disability presumption to be rebutted only by clean and convincing
evidence.  

SECTION 7. Amends Section 7(e), Article 6243e.2(1), V.T.C.S., to entitle a
member's eligible survivors to a one-time $5,000 death benefit, payable as
a lump-sum, if the member is not survived by an eligible spouse, an
eligible child, or an eligible parent, the $5,000 death benefit shall be
divided equally among the eligible parents of the deceased member, or the
deceased member's estate. 

SECTION 8. Amends Section 10, Article 6243e.2(1), V.T.C.S., to authorize
the benefits provided by this article to be increased if a member of the
American Academy of Actuaries determines that the increase cannot
reasonably be viewed as posing a material risk of jeopardizing the fund's
ability to pay any existing benefit, or the State Pension Review Board
approved the determination by the actuary selected by the board that the
increase cannot reasonably be viewed as posing a material risk of
jeopardizing the fund's ability to pay any existing benefit. Deletes text
regarding approval from being unreasonably withheld. 

SECTION 9. Amends 6243e.2(1), V.T.C.S., by adding Sections 10A and 10B, as
follows: 

Sec. 10A. ANNUAL SUPPLEMENTAL BENEFIT FOR CERTAIN RETIRED MEMBERS AND
ELIGIBLE SURVIVORS. Requires the board to pay supplemental benefits under
this section to retired members, not including deferred retirees, and to
eligible survivors, not including survivors of deferred retirees, if the
requirements of Subsection (b) of this section are met. Requires the board
to pay the supplemental benefits in January following a fiscal year of the
fund in which the requirements of Subsection (b) of this section are met.
Requires the board to pay supplemental benefits under this section, if the
fund actuary determines that, as of the end of any fund fiscal year,
certain conditions exist. Authorizes the board to adopt rules and
procedures to govern the payment of benefits under this section and to
establish a minimum income level consistent with the national poverty level
set by the United States Department of Health and Human Services. Requires
the board to determine an aggregate  supplemental benefit amount that may
not exceed the lesser of certain conditions. Requires the board to
determine the amount of a lump-sum payment for each retired member or
eligible survivor, based on the aggregate supplemental benefit amount
determined under Subsection (d) of this section. Requires the total number
of years since the commencement date of each retired member's or eligible
survivor's annual retirement or survivor benefit to be divided by the total
number of years since the commencement date of all retired members' and
eligible survivors' annual retirement or survivor benefit to establish a
payment percentage for each retired member and eligible survivor, in
determining the lump-sum payment amount. Requires the payment percentage of
each retired member and eligible survivor to be multiplied by the aggregate
supplemental benefit less the total amount of any payments made under
Subsection (i) of this section. Provides that the product of the
computation under Subsection (g) of this section determines the lump-sum
payment to the retired member or eligible survivor unless the lump-sum
payment plus the annual retirement benefit is less than the minimum income
level established by the board. Entitles the retired member or eligible
survivor to receive an additional payment from the amount determined under
Subsection (d) of this section that will cause the recipient to meet but
not exceed the minimum income level, if the lump-sum payment plus the
annual retirement benefit is less than the minimum income level established
by the board. Provides that the benefits commencement date for a retired
member or the eligible survivor of a retired member is the first day on
which the retired member most recently began receiving  pension benefits
form the fund. Provides that the benefits commencement date for an eligible
survivor or an active member is the first day of receipt of benefits as an
eligible survivor. Provides that notwithstanding any other provision of
this section, if more than one eligible survivor is to receive a
supplemental benefit as a result of one deceased person under this section,
certain conditions must exist.  

Sec. 10B. ADDITIONAL LUMP-SUM RETIREMENT OR DEATH BENEFIT. Requires the
board to pay certain people a $4,000 lump-sum payment from the fund, in
addition to any other benefits, as soon as administratively practicable
after the date of the person's retirement, if the person's retirement
occurs or occurred after June 30, 1998. Requires the board to pay a $4,000
lump-sum payment from the fund, in addition to any other benefits, to an
eligible survivor of a member who meets certain conditions. Provides that
the amount of each survivor's benefit is determined in the same manner as
payment of death benefits is determined under Section 7(e) of this article,
if more than one eligible survivor of one deceased member exists. Requires
the board to make payments under Subsection (b) of this section as soon as
administratively practicable after the date of death of the member of whom
each recipient is an eligible survivor. 

SECTION 10. Amends Sections 13(b) and (h), Article 6243e.2(1), V.T.C.S., to
require each applicant to be provided written notice that a copy of the
results of the examination will be forwarded to the board for the purpose
of determining whether the applicant has a preexisting condition that would
be relevant to any determination under Section 6 of this article, if at the
time that physical examinations are administered on behalf of the
municipality. Authorizes the board to require additional physical
examinations if necessary in determining the presence or absence of any
preexisting condition. Deletes text regarding the board establishing
eligibility requirements for membership. Makes a conforming change.  

SECTION 11. Effective date: November 1, 1999.

SECTION 12. Emergency clause.