By Greenberg H.B. No. 2520
76R1859 GCH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to programs and systems administered by the Employees
1-3 Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 812.101(a), Government Code, is amended
1-6 to read as follows:
1-7 (a) A member of the retirement system may withdraw all of
1-8 the member's accumulated contributions for service credited in the
1-9 employee class of membership if:
1-10 (1) the member does not hold a position included in
1-11 that class;
1-12 (2) the member does not assume or resume, during the
1-13 30 days after the date on [calendar month following the month in]
1-14 which the member terminates employment, a position included in
1-15 that class; and
1-16 (3) the member's application for withdrawal is filed
1-17 before the member assumes or resumes a position included in that
1-18 class.
1-19 SECTION 2. Section 812.104, Government Code, is amended by
1-20 amending Subsection (a) and adding Subsection (c) to read as
1-21 follows:
1-22 (a) Except as provided by Subsection (c), deposits
1-23 [Deposits] representing interest or membership fees that are
1-24 required of a member to establish service credit under Section
2-1 813.202, 813.302, 813.402, or 813.502 are not refundable.
2-2 (c) At the time a service retirement, disability retirement,
2-3 or death benefit annuity becomes payable, the retirement system
2-4 shall refund any contributions, interest, or membership fees used
2-5 to establish service credit that is not used in computing the
2-6 amount of the annuity.
2-7 SECTION 3. Section 813.104(b), Government Code, is amended
2-8 to read as follows:
2-9 (b) Except as provided by Subsection (c), payments may not
2-10 be made under a rule adopted under this section:
2-11 (1) to establish or reestablish service credit of a
2-12 person who is currently [has] retired or has died; [or]
2-13 (2) to establish current service under Section
2-14 813.201; or
2-15 (3) to establish service credit under Section 813.511.
2-16 SECTION 4. Section 813.201(b), Government Code, is amended
2-17 to read as follows:
2-18 (b) A member may not, after August 31, 1997 [1991], accrue
2-19 or establish [a total of more than 50 years of] service credit in
2-20 the employee class of membership when the total amount of service
2-21 credit, multiplied by the percentage in effect for computing
2-22 annuities under Section 814.105, would exceed the number 100. When
2-23 the maximum amount [a total of 50 years] of service credit is
2-24 accrued or established by a member in the employee class, member
2-25 and state contributions cease, although the member retains
2-26 membership subject to Section 812.005.
2-27 SECTION 5. Subchapter F, Chapter 813, Government Code, is
3-1 amended by adding Section 813.511 to read as follows:
3-2 Sec. 813.511. CREDIT FOR ACCUMULATED ANNUAL LEAVE. (a) A
3-3 member who holds a position included in the employee class of
3-4 membership during the month that includes the effective date of the
3-5 member's retirement and who retires based on service or a
3-6 disability is entitled to service credit in the retirement system
3-7 for the member's annual leave that has accumulated and is unused on
3-8 the last day of employment. Annual leave is creditable in the
3-9 retirement system at the rate of one month of service credit for
3-10 each 20 days, or 160 hours, of accumulated annual leave and one
3-11 month for each fraction of days or hours remaining after division
3-12 of the total hours of accumulated annual leave by 160.
3-13 (b) A member who holds a position included in the employee
3-14 class may use annual leave creditable under this section to satisfy
3-15 service requirements for retirement under Section 814.104 or
3-16 814.107 if the annual leave attributed to the eligibility
3-17 requirements remains otherwise unused on the last day of
3-18 employment.
3-19 (c) Except as provided by Subsection (d), the disbursing
3-20 officer of each department or agency shall, before the 11th day
3-21 after the effective date of retirement of one or more employees of
3-22 the department or agency, certify to the retirement system:
3-23 (1) the name of each person whose retirement from the
3-24 department or agency, and from state service, became effective
3-25 during the preceding month; and
3-26 (2) the amount of the person's accumulated annual
3-27 leave on the last day of employment.
4-1 (d) The disbursing officer of a department or agency that
4-2 employs a member who applies for retirement under Subsection (b)
4-3 shall, not more than 90 or less than 30 days before the effective
4-4 date of the member's retirement, certify to the retirement system
4-5 the amount of the member's accumulated and unused annual leave.
4-6 The officer shall immediately notify the retirement system if the
4-7 member uses annual leave after the date of certification.
4-8 (e) On receipt of a certification under Subsection (c) or
4-9 (d), the retirement system shall grant any credit to which a
4-10 retiring member or retiree who is a subject of the certification is
4-11 entitled. An increase in the computation of an annuity because of
4-12 credit provided by this section after a certification under
4-13 Subsection (d) begins with the first payment that becomes due after
4-14 certification.
4-15 (f) The retirement system shall cancel the retirement of a
4-16 person who used annual leave creditable under this section to
4-17 qualify for service retirement if the annual leave is otherwise
4-18 used by the person before the effective date of retirement.
4-19 SECTION 6. Section 814.104, Government Code, is amended by
4-20 amending Subsection (a) and adding Subsection (c) to read as
4-21 follows:
4-22 (a) Except as provided by Section 814.102 or by rule adopted
4-23 under Section 813.304(d) or 803.202(2), a member who has service
4-24 credit in the retirement system is eligible to retire and receive a
4-25 service retirement annuity if the member:
4-26 (1) [if the member] is at least 60 years old and has
4-27 at least 5 years of service credit in the employee class; or
5-1 (2) has at least five years of service credit in the
5-2 employee class and [if] the sum of the member's age and amount of
5-3 service credit in the employee class, including months of age and
5-4 credit, equals or exceeds the number 80.
5-5 (c) For the sole purpose of determining eligibility to
5-6 receive a service retirement annuity, the retirement system shall
5-7 consider service performed as a participant in the optional
5-8 retirement program under Chapter 830 as if it were service for
5-9 which credit is established in the retirement system.
5-10 SECTION 7. Subchapter B, Chapter 814, Government Code, is
5-11 amended by adding Section 814.1042 to read as follows:
5-12 Sec. 814.1042. SERVICE FOR CERTAIN GOVERNMENTAL EMPLOYERS.
5-13 (a) For the sole purpose of determining eligibility to receive a
5-14 service retirement annuity under Section 814.104(a)(2), the
5-15 retirement system shall consider not more than 60 months, or
5-16 portions of months, of service performed for a Texas governmental
5-17 employer that does not participate in the proportionate retirement
5-18 program under Chapter 803 by a member who has at least five years
5-19 of service credit, excluding military service, in the employee
5-20 class as if it were service for which credit is established in the
5-21 retirement system.
5-22 (b) A member who seeks the application of this section must
5-23 provide documentation satisfactory to the retirement system of the
5-24 amount of service performed for the governmental employer.
5-25 (c) Service described by this section may not be used in
5-26 determining eligibility for participation in the Texas Employees
5-27 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
6-1 Texas Insurance Code).
6-2 SECTION 8. Sections 814.107(c), (d), and (e), Government
6-3 Code, are amended to read as follows:
6-4 (c) The standard combined service retirement annuity that is
6-5 payable under this section is based on retirement on or after the
6-6 attainment of the earlier of the age of 50 or the normal retirement
6-7 age, which for purposes of this section is the age at which the sum
6-8 of the member's age and amount of service credit in the employee
6-9 class equals the number 80 [at the age of 50 or older]. A law
6-10 enforcement or custodial officer who retires before attaining the
6-11 normal retirement age [of 50] is entitled to an annuity that is
6-12 actuarially reduced from the annuity available at the normal
6-13 retirement age [of 50] to the law enforcement or custodial officer
6-14 service credit annuity amount available at the sum of the member's
6-15 age and amount of employee class service credit. The annuity
6-16 [earlier retirement age and] is payable from the law enforcement
6-17 and custodial officer supplemental retirement fund.
6-18 (d) A member who retires under this section retires
6-19 simultaneously from the employee class of membership. Benefits for
6-20 service in the employee class of membership become payable from the
6-21 trust fund established by Section 815.310 at the normal retirement
6-22 age [of 50] under the computation provided by Section 814.105.
6-23 Optional retirement annuities provided by Section 814.108 are
6-24 available to a member eligible to receive a service retirement
6-25 annuity under this section, but the same optional plan and designee
6-26 must be selected for the portion of the annuity payable from the
6-27 law enforcement and custodial officer supplemental retirement fund
7-1 and the portion payable from the trust fund established by Section
7-2 815.310.
7-3 (e) The amount payable from the law enforcement and
7-4 custodial officer supplemental retirement fund is reducible by the
7-5 amount paid from the trust fund established by Section 815.310 for
7-6 service as a law enforcement or custodial officer. The total
7-7 combined amount of an annuity under this section may not be less
7-8 than the authorized benefit under Subsection (b) subtracted by any
7-9 amount necessary because of selection of an optional annuity,
7-10 because of retirement before the normal retirement age [of 50], or
7-11 as provided by Subsection (f).
7-12 SECTION 9. Subchapter B, Chapter 814, Government Code, is
7-13 amended by adding Section 814.1082 to read as follows:
7-14 Sec. 814.1082. PARTIAL LUMP SUM OPTION. (a) A member who
7-15 is eligible for an unreduced service retirement annuity may select
7-16 a standard retirement annuity or an optional retirement annuity
7-17 described by Section 814.108 together with a partial lump sum
7-18 distribution.
7-19 (b) The amount of the lump sum distribution under this
7-20 section may not exceed the sum of 36 months of a standard service
7-21 retirement annuity computed without regard to this section.
7-22 (c) The service retirement annuity selected by the member
7-23 shall be actuarially reduced to reflect the lump sum option
7-24 selected by the member and shall be actuarially equivalent to a
7-25 standard or optional service retirement annuity, as applicable,
7-26 without the partial lump sum distribution. The annuity and lump
7-27 sum shall be computed to result in no actuarial loss to the
8-1 retirement system.
8-2 (d) Unless otherwise specified in rules adopted by the board
8-3 of trustees, the lump sum distribution will be made as a single
8-4 payment payable at the time that the first monthly annuity payment
8-5 is paid to the retiree.
8-6 (e) The amount of the lump sum distribution will be deducted
8-7 from any amount otherwise payable under Section 814.505.
8-8 (f) The partial lump sum option under this section may be
8-9 elected only once by a member and may not be elected by a retiree.
8-10 A member retiring under the proportionate retirement program under
8-11 Chapter 803 is not eligible for the partial lump sum option.
8-12 (g) The board of trustees may adopt rules for the
8-13 implementation of this section.
8-14 SECTION 10. Section 814.202, Government Code, is amended by
8-15 adding Subsection (d) to read as follows:
8-16 (d) For the sole purpose of determining eligibility to
8-17 receive a disability retirement annuity under Subsection (a)(3),
8-18 the retirement system shall consider service performed as a
8-19 participant in the optional retirement program under Chapter 830 as
8-20 if it were service for which credit is established in the
8-21 retirement system.
8-22 SECTION 11. Section 814.302(b), Government Code, is amended
8-23 to read as follows:
8-24 (b) If a person dies who, at the time of death, was a
8-25 contributing member of a retirement program administered by the
8-26 board of trustees and was eligible, having met the requirements of
8-27 service credit and attained age, for a service retirement annuity
9-1 based on service in one or more board-administered programs or was
9-2 a contributing member of the employee class, had at least three
9-3 years of service credit in that class, and would have been eligible
9-4 to retire under the proportionate retirement program under Chapter
9-5 803, but was not eligible to select a death benefit plan, the
9-6 person's surviving spouse may select a plan in the same manner that
9-7 the decedent could have made the selection if the decedent had
9-8 retired on the last day of the month in which the person died. If
9-9 there is no surviving spouse, the guardian of the decedent's
9-10 surviving minor children may select a plan. If the decedent is not
9-11 survived by a spouse or minor children, an annuity may not be paid
9-12 under this subsection.
9-13 SECTION 12. Section 815.103, Government Code, is amended by
9-14 adding Subsection (d) to read as follows:
9-15 (d) The board of trustees may accept on behalf of the
9-16 retirement system gifts of money or other property from any public
9-17 or private source.
9-18 SECTION 13. Section 815.110(e), Government Code, is amended
9-19 to read as follows:
9-20 (e) The board of trustees [annually] shall select an
9-21 independent auditor to perform an annual [a] financial audit of the
9-22 retirement system. The selection shall be in accordance with the
9-23 requirements of Chapter 2254 for obtaining the services of a
9-24 certified public accountant [made under a competitive bidding
9-25 process in which the state auditor is eligible to bid].
9-26 SECTION 14. Section 815.202(f), Government Code, is amended
9-27 to read as follows:
10-1 (f) The board of trustees may specifically delegate any
10-2 right, power, or duty imposed or conferred on the executive
10-3 director by law to another employee of the retirement system. If
10-4 not so specifically delegated, the executive director may delegate
10-5 to another employee of the retirement system any right, power, or
10-6 duty assigned to the executive director.
10-7 SECTION 15. Section 815.208, Government Code, is amended by
10-8 adding Subsection (d) to read as follows:
10-9 (d) The board of trustees may compensate employees of the
10-10 retirement system, whether subject to or exempt from the overtime
10-11 provisions of the Fair Labor Standards Act of 1938 (29 U.S.C.
10-12 Section 201 et seq.), at the rate equal to the employees' regular
10-13 rate of pay for work performed on a legal holiday or for other
10-14 compensatory time accrued, when taking compensatory time off would
10-15 be disruptive to the system's normal business functions.
10-16 SECTION 16. Section 815.322, Government Code, is amended to
10-17 read as follows:
10-18 Sec. 815.322. TRANSFER OF ASSETS TO ADJUST AMOUNT IN
10-19 RETIREMENT ANNUITY RESERVE ACCOUNT. After making the transfers
10-20 required by Section 815.318, the executive director [board of
10-21 trustees] shall make a transfer to make the amount in the
10-22 retirement annuity reserve account equal, as of the last day of
10-23 each fiscal year, to the actuarial present value of the annuities
10-24 for which a transfer of assets has been made as required by Section
10-25 815.319. The transfer shall be:
10-26 (1) a transfer from the retirement annuity reserve
10-27 account to the state accumulation account of the amount by which
11-1 the amount in the retirement annuity reserve account exceeds the
11-2 actuarial present value of the annuities; or
11-3 (2) a transfer from the state accumulation account to
11-4 the retirement annuity reserve account of the amount by which the
11-5 actuarial present value of the annuities exceeds the amount in the
11-6 retirement annuity reserve account.
11-7 SECTION 17. Section 815.511, Government Code, is amended to
11-8 read as follows:
11-9 Sec. 815.511. [APPEAL OF] ADMINISTRATIVE DECISION; APPEAL.
11-10 (a) The board of trustees may modify or delete a proposed finding
11-11 of fact or conclusion of law contained in a proposal for decision
11-12 submitted by an administrative law judge or other hearing examiner,
11-13 or make alternative findings of fact and conclusions of law, in a
11-14 proceeding considered to be a contested case under Chapter 2001.
11-15 The retirement system shall state in writing the specific reason
11-16 for its determination and may adopt rules for the implementation of
11-17 this subsection.
11-18 (b) A person aggrieved by a decision of any retirement
11-19 system administered by the board of trustees denying or limiting
11-20 membership, service credit, or eligibility for or the amount of
11-21 benefits payable by a system may appeal the decision to the board.
11-22 The appeal is considered to be an appeal of a contested case under
11-23 the administrative procedure law, Chapter 2001. On judicial appeal
11-24 the standard of review is by substantial evidence.
11-25 SECTION 18. Section 840.103(b), Government Code, is amended
11-26 to read as follows:
11-27 (b) Not later than December 31 [Before November 2] of each
12-1 even-numbered year, the retirement system shall certify to the
12-2 Legislative Budget Board and to the budget division of the
12-3 governor's office for review:
12-4 (1) an actuarial valuation of the retirement system to
12-5 determine the percentage of annual payroll required from the state
12-6 to finance fully the retirement system as provided by Section
12-7 840.106;
12-8 (2) an estimate of the amount necessary to pay the
12-9 state's contribution under Subdivision (1) for the following
12-10 biennium; and
12-11 (3) as a separate item, an estimate of the amount, in
12-12 addition to anticipated receipts from membership fees, required to
12-13 administer the retirement system for the following biennium.
12-14 SECTION 19. Section 3(a)(18), Texas Employees Uniform Group
12-15 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
12-16 Code), is amended to read as follows:
12-17 (18) "Institution of higher education" means any
12-18 public community/junior college or senior college or university, or
12-19 any other agency of higher education within the meaning and
12-20 jurisdiction of Chapter 61, Education Code, except The University
12-21 of Texas System and The Texas A&M University System. [The term
12-22 does not include Texas Tech University and the University of
12-23 Houston System unless either of these entities elects to
12-24 participate in accordance with Section 3A of this Act.]
12-25 SECTION 20. Section 3A, Texas Employees Uniform Group
12-26 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
12-27 Code), is amended to read as follows:
13-1 Sec. 3A. PARTICIPATION BY CERTAIN ENTITIES [CERTAIN
13-2 INSTITUTIONS MAY ELECT TO PARTICIPATE]. (a) The Texas Municipal
13-3 Retirement System and the Texas County and District Retirement
13-4 System shall [Texas Tech University, the University of Houston
13-5 System, or both may] participate in the Texas Employees Uniform
13-6 Group Insurance [Benefits] Program administered by the Employees
13-7 Retirement System of Texas under this Act. Participation is
13-8 limited to the members of the governing bodies of the systems, the
13-9 officers and employees of the systems, and eligible dependents of
13-10 the governing body members, officers, and employees. Participation
13-11 under this subsection does not include the municipalities or
13-12 subdivisions participating in either system or the trustees,
13-13 officers, or employees, or their dependents, of the participating
13-14 municipalities or subdivisions. The Texas Municipal Retirement
13-15 System and the Texas County and District Retirement System are
13-16 required to pay all contributions that would be paid by the state
13-17 if their participants were state employees [The university or
13-18 system must notify the trustee of its election to participate not
13-19 later than April 1, 1992].
13-20 (b) A person who began employment with, or became an officer
13-21 of, the Texas Turnpike Authority within the three-year period
13-22 preceding August 31, 1997, who was an officer or employee of the
13-23 Texas Turnpike Authority on that date, who became an officer or
13-24 employee of the North Texas Tollway Authority on September 1, 1997,
13-25 and who retires or is eligible to retire with at least 10 years of
13-26 service credit under the proportionate retirement program
13-27 established by Chapter 803, Government Code, or under one of the
14-1 public retirement systems to which Chapter 803 applies may
14-2 participate in the programs and coverages provided by this Act as
14-3 an annuitant and may obtain coverage for the person's dependents as
14-4 any other participating annuitant. The North Texas Tollway
14-5 Authority is responsible for payment of the contributions the state
14-6 would make if the annuitants were state employees.
14-7 SECTION 21. Section 4B, Texas Employees Uniform Group
14-8 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
14-9 Code), is amended by adding Subsection (c-1) to read as follows:
14-10 (c-1) The board of trustees may modify or delete a proposed
14-11 finding of fact or conclusion of law contained in a proposal for
14-12 decision submitted by an administrative law judge or other hearing
14-13 examiner, or make alternative findings of fact and conclusions of
14-14 law, in a proceeding considered to be a contested case under
14-15 Chapter 2001. The executive director shall state in writing the
14-16 specific reason for the determination and may adopt rules for the
14-17 implementation of this subsection.
14-18 SECTION 22. Section 5, Texas Employees Uniform Group
14-19 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
14-20 Code), is amended by amending Subsections (a), (d), and (f) and
14-21 adding Subsection (e) to read as follows:
14-22 (a) The trustee is authorized, empowered, and directed to
14-23 establish plans of group coverages for active employees and retired
14-24 employees which in the trustee's discretion may include but are not
14-25 necessarily limited to the following: group life coverages,
14-26 accidental death and dismemberment, health benefits plans,
14-27 including but not limited to hospital care and benefits, surgical
15-1 care and treatment, medical care and treatment, dental care,
15-2 obstetrical benefits, prescribed drugs, medicines, and prosthetic
15-3 devices and supplemental benefits, supplies, and services in
15-4 conformity with the provisions of this Act, protection against
15-5 either long or short term loss of salary and any other group
15-6 coverages which in the discretion of the trustee with consultation
15-7 from the advisory committee shall be deemed advisable. All rules
15-8 and regulations shall be promulgated pursuant thereto. The trustee
15-9 shall determine the coverages desired for state employees and other
15-10 eligible participants [will submit this information to the State
15-11 Board of Insurance for any recommendations as to the types and
15-12 sufficiency of such coverages. The State Board of Insurance will
15-13 notify the board of trustees within 30 days as to any such
15-14 recommendations and will furnish the board of trustees with a list
15-15 of all carriers authorized to do business in the State of Texas who
15-16 would be eligible to bid on the coverages that are to be insured by
15-17 a carrier]. The trustee will notify eligible [those] carriers that
15-18 competitive bidding will be conducted and that they are to submit
15-19 their bids to the trustee [State Board of Insurance] by a specified
15-20 date if they wish to bid on the contract. An actuary selected by
15-21 the trustee shall advise the trustee as to the actuarial soundness
15-22 of the bids received. [The State Board of Insurance will, after
15-23 the designated closing date of receiving bids, examine and evaluate
15-24 the bidding contracts and certify their actuarial soundness to the
15-25 trustee within 15 days from the closing date.] The trustee shall
15-26 select the desired carrier or carriers and will notify the bidding
15-27 eligible carriers as to the results of the bidding. The trustee
16-1 shall select the desired carrier or carriers to provide services
16-2 that will [which shall] be in the best interest of the employees
16-3 covered by this Act. The trustee is not required to select the
16-4 lowest bid but shall take into consideration other factors such as
16-5 ability to service contracts, past experience, financial ability,
16-6 and other relevant criteria. Should the trustee select a carrier
16-7 whose bid differs from that advertised, such deviation shall be
16-8 recorded and the reasons for such deviation shall be fully
16-9 justified and explained in the minutes of the next meeting of the
16-10 trustee. The trustee shall submit the coverages provided by the
16-11 group plan for competitive bidding at least every six years.
16-12 (d) No department shall establish, continue, or authorize
16-13 payroll deductions or reductions for any benefits or coverage as
16-14 provided in this Act without the express approval of the trustee[,
16-15 except for benefits from the deferred compensation program
16-16 established pursuant to Chapter 197, Acts of the 63rd Legislature,
16-17 Regular Session, 1973 (Article 6252-3b, Vernon's Texas Civil
16-18 Statutes)].
16-19 (e) Before the first day of each state fiscal biennium, the
16-20 trustee shall estimate for an average 60-day period during the
16-21 biennium the expenditures from the fund anticipated for self-funded
16-22 plans, considering claims and administrative expenses for those
16-23 plans that are projected to be incurred. The trustee shall place
16-24 the estimated amount in a contingency reserve fund to provide for
16-25 adverse fluctuations in claims or administrative expenses. The
16-26 trustee shall include in each request for legislative
16-27 appropriations to the program the amount the trustee determines to
17-1 be necessary to maintain the contingency reserve fund at the level
17-2 required by this subsection. The trustee may invest and reinvest
17-3 any portion of the contingency reserve fund under the standard of
17-4 care provided by Section 815.307, Government Code, considering the
17-5 functional need to provide for adverse fluctuations in claims or
17-6 administrative expenses. The interest on, earnings of, and
17-7 proceeds from the sale of investments of assets in the contingency
17-8 reserve fund shall be credited to the fund.
17-9 (f) The trustee, in its sole discretion and in accordance
17-10 with the requirements of this section, shall determine those plans
17-11 of coverages for which the trustee does not intend to purchase
17-12 insurance and which it intends to provide directly from the
17-13 Employees Life, Accident, and Health Insurance and Benefits Fund.
17-14 Any plan of coverages for which the trustee does not purchase
17-15 insurance but provides under this Act on a self-funded basis is
17-16 exempt from any other insurance law unless the law expressly
17-17 applies to this plan or this Act. A qualified actuary selected by
17-18 the trustee shall advise the trustee as to an actuarially sound
17-19 level of contributions required to provide coverages directly from
17-20 the fund. [The trustee shall make an estimate of the unrestricted
17-21 balance of the fund. Unless such estimated unrestricted balance
17-22 is equal to at least 10 percent of the total benefits expected to
17-23 be provided directly from the fund as a result of claims incurred
17-24 during the fiscal year, the trustee shall include in the
17-25 contributions required the amount necessary to establish an
17-26 unrestricted balance in the fund of not less than 10 percent. The
17-27 unrestricted balance shall be placed in a contingency reserve fund
18-1 to provide for adverse fluctuations in future charges, claims,
18-2 costs, or expenses of the program.]
18-3 SECTION 23. Section 8, Texas Employees Uniform Group
18-4 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
18-5 Code), is amended to read as follows:
18-6 Sec. 8. REINSURANCE. The trustee, in its sole discretion
18-7 and under conditions it approves, may reinsure any coverage that it
18-8 has determined will be provided directly from the fund in
18-9 accordance with Section 5(f) of this Act. [(a) The trustee shall
18-10 arrange with any carrier or carriers issuing any policy or policies
18-11 under this Act for the reinsurance, under conditions approved by
18-12 the trustee, of portions of the total amount of insurance under
18-13 such policy or policies, with other qualified carriers which elect
18-14 to participate in the reinsurance.]
18-15 [(b) The trustee shall determine for and in advance of a
18-16 policy year which qualified carriers are eligible to participate as
18-17 reinsurers and the amount of insurance under a policy or policies
18-18 which is to be allocated to the issuing company and reinsurers.
18-19 The trustee shall make this determination when a participating
18-20 company withdraws.]
18-21 SECTION 24. Section 10, Texas Employees Uniform Group
18-22 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
18-23 Code), is amended by adding Subsection (c) to read as follows:
18-24 (c) The records of a participant in the Texas Employees
18-25 Uniform Group Insurance Program in the custody of the trustee, or
18-26 of an administrator or carrier acting on behalf of the trustee, are
18-27 confidential and not subject to disclosure and are exempt from the
19-1 public access provisions of Chapter 552, Government Code, except as
19-2 provided by this subsection. Records may be released to a
19-3 participant or to an authorized attorney, family member, or
19-4 representative acting on behalf of the participant. The trustee
19-5 may release the records to an administrator, carrier, or agent or
19-6 attorney acting on behalf of the trustee, to another governmental
19-7 entity, or to a medical provider of the participant for the purpose
19-8 of carrying out the purposes of this Act, or to a party in response
19-9 to a subpoena issued under applicable law. The records of a
19-10 participant remain confidential after release to a person as
19-11 authorized by this subsection. The records of a participant may
19-12 become part of the public record of an administrative or judicial
19-13 proceeding related to a contested case under this Act, unless the
19-14 records are closed to public access by a protective order issued
19-15 under applicable law.
19-16 SECTION 25. Section 11(e)(3), Texas Employees Uniform Group
19-17 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
19-18 Code), is amended to read as follows:
19-19 (3) An annuitant [A retiree] participating in optional
19-20 term life insurance coverage is not eligible for premium-waived
19-21 extended insurance benefits [or accelerated life insurance
19-22 benefits] if the total disability [or terminal condition,
19-23 respectively,] begins after the date of retirement. Accidental
19-24 death and dismemberment insurance coverage ceases on the date of
19-25 retirement, regardless of age. An annuitant participating in
19-26 optional term life insurance coverage is eligible for accelerated
19-27 life insurance benefits as provided by rules adopted under the
20-1 authority of Subsection (d) of this section, as added by Chapter
20-2 1048, Acts of the 75th Legislature, Regular Session, 1997.
20-3 SECTION 26. Section 11A, Texas Employees Uniform Group
20-4 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
20-5 Code), is amended to read as follows:
20-6 Sec. 11A. PAYMENT OF ACCELERATED BENEFITS; IRREVOCABLE
20-7 DESIGNATION OF BENEFICIARY. [(a)] The trustee shall adopt rules
20-8 requiring a group life insurance program provided to employees,
20-9 including annuitants or dependents, to include a provision allowing
20-10 the employee, annuitant, or dependent to make, in conjunction with
20-11 receipt of a viatical settlement, an irrevocable designation of
20-12 beneficiary for part or all of the group life coverage benefits. A
20-13 viatical settlement is not valid for any coverage under the Texas
20-14 Employees Uniform Group Insurance Program unless the employee,
20-15 annuitant, or dependent has a terminal illness or terminal injury,
20-16 as defined by rules adopted by the trustee, at the time application
20-17 for benefits is made. [:]
20-18 [(1) elect to receive an accelerated benefit under
20-19 Article 3.50-6, Insurance Code, subject to the provisions of that
20-20 article; or]
20-21 [(2) make, in conjunction with receipt of a viatical
20-22 settlement, an irrevocable designation of a beneficiary for all or
20-23 a part of the group life coverage benefits.]
20-24 [(b)] In this section, "viatical settlement" has the meaning
20-25 assigned by Article 3.50-6A, Insurance Code.
20-26 SECTION 27. Section 13, Texas Employees Uniform Group
20-27 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
21-1 Code), is amended by adding Subsection (e) to read as follows:
21-2 (e) Except as provided by Section 13A of this Act, on
21-3 application to the trustee and arrangement for payment of
21-4 contributions, a former member of a board or commission described
21-5 by Section 3(a)(5)(A)(vi) of this Act or a former member of the
21-6 governing body of an institution of higher education remains
21-7 eligible for participation in a group health coverage plan offered
21-8 under this Act as long as no lapse in coverage occurs after the end
21-9 of the former member's term. The participant's contribution for
21-10 coverage under a group health coverage plan may not be greater than
21-11 the contribution for continuation coverage under the Consolidated
21-12 Omnibus Reconciliation Act of 1985 (Pub. L. 99-272).
21-13 SECTION 28. The Texas Employees Uniform Group Insurance
21-14 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is
21-15 amended by adding Section 16A to read as follows:
21-16 Sec. 16A. MANAGEMENT OF ASSETS. The trustee may commingle
21-17 for investment purposes the assets of any fund created under this
21-18 Act with any other fund created under this Act or any other trust
21-19 fund administered by the trustee, as long as proportionate
21-20 ownership records are maintained and credited.
21-21 SECTION 29. Section 18(a), Texas Employees Uniform Group
21-22 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
21-23 Code), is amended to read as follows:
21-24 (a) The group benefits advisory committee is composed of 26
21-25 voting members as provided by this section. The office of the
21-26 attorney general, the office of the comptroller, the Railroad
21-27 Commission of Texas, the General Land Office, and the Department of
22-1 Agriculture are entitled to be represented by one member each on
22-2 the committee, who may be appointed by the governing body of the
22-3 state agency or elected by and from the employees of the agency, as
22-4 determined by rule by the governing body of the agency. One
22-5 employee shall be elected from each of the remaining eight largest
22-6 state agencies that are governed by appointed officers by and from
22-7 the employees of those agencies. One nonvoting member shall be the
22-8 executive director of the Employees Retirement System of Texas.
22-9 One member shall be an expert in employee benefit issues from the
22-10 private sector, appointed by the governor. One member shall be an
22-11 expert in employee benefits issues from the private sector,
22-12 appointed by the lieutenant governor. One member shall be a
22-13 retired state employee appointed by the trustee. One member shall
22-14 be a state employee of a state agency eligible for membership in
22-15 the Texas Small State Agency Task Force [other than one of the
22-16 eight largest state agencies], appointed by the trustee. Not more
22-17 than one employee from a particular state agency may serve on the
22-18 committee. Each of the seven largest institutions of higher
22-19 education, as determined by the number of employees on the payroll
22-20 of an institution, shall elect one member of the committee from
22-21 among persons who have each been nominated by a petition signed by
22-22 at least 300 employees. Two members shall be employees of
22-23 institutions of higher education, other than the seven largest
22-24 institutions of higher education, who are appointed by the Texas
22-25 Higher Education Coordinating Board, but not more than one employee
22-26 shall be from any one institution. The members shall elect a
22-27 presiding officer from their membership to serve a one-year term.
23-1 SECTION 30. Section 19(b), Texas Employees Uniform Group
23-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
23-3 Code), is amended to read as follows:
23-4 (b) A surviving spouse of an employee or a retiree who is
23-5 entitled to monthly benefits paid by a retirement system named in
23-6 this Act may, following the death of the employee or retiree, elect
23-7 to retain the spouse's authorized coverages and also retain
23-8 authorized coverages for any dependent of the spouse, at the group
23-9 rate for employees, provided such coverage was previously secured
23-10 by the employee or retiree for the spouse or dependent, and the
23-11 spouse directs the applicable retirement system to deduct required
23-12 contributions from the monthly benefits paid the surviving spouse
23-13 by the retirement system. A surviving dependent of a retiree who
23-14 was receiving monthly benefits paid by a retirement system named in
23-15 this Act may, after the death of the retiree and if the retiree
23-16 leaves no surviving spouse, elect to retain any coverage previously
23-17 secured by the retiree, at the group rate for employees, until the
23-18 dependent becomes ineligible for coverage for a reason other than
23-19 the death of the member of the group. A dependent who makes an
23-20 election under this subsection and who is entitled to monthly
23-21 benefits from a retirement system named in this Act based on the
23-22 service of the deceased retiree must direct the applicable
23-23 retirement system to deduct required contributions for the coverage
23-24 from the monthly benefits paid the surviving dependent by the
23-25 retirement system. If funds are specifically appropriated for the
23-26 purpose, the state shall pay the same portion of the cost of the
23-27 required contributions for a deceased retiree's surviving spouse or
24-1 other surviving dependent who elects to retain coverage under this
24-2 subsection as it pays for similar dependent coverage for an
24-3 employee or retiree participating in the program.
24-4 SECTION 31. Section 403.026(a), Government Code, as added by
24-5 Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
24-6 is amended to read as follows:
24-7 (a) The comptroller shall conduct a study each biennium to
24-8 determine the number and type of fraudulent claims for medical or
24-9 health care benefits submitted:
24-10 (1) under the state Medicaid program; or
24-11 (2) [under group health insurance programs
24-12 administered through the Employees Retirement System of Texas for
24-13 active and retired state employees; or]
24-14 [(3)] by or on behalf of a state employee and
24-15 administered by the attorney general under Chapter 501, Labor Code.
24-16 SECTION 32. Section 609.007, Government Code, is amended by
24-17 adding Subsection (d) to read as follows:
24-18 (d) A contract created under this section need not be in
24-19 writing and may be communicated to the plan administrator
24-20 electronically or by any other means approved by the plan's
24-21 trustees.
24-22 SECTION 33. Section 615.001, Government Code, is amended to
24-23 read as follows:
24-24 Sec. 615.001. DEFINITION. In this chapter, "minor child"
24-25 means a child who, on the date of the death of an individual listed
24-26 under Section 615.003, is younger than 18 [21] years of age.
24-27 SECTION 34. (a) Monthly payments of a retirement or death
25-1 benefit annuity by the Employees Retirement System of Texas under
25-2 Subtitle B, Title 8, Government Code, are increased beginning with
25-3 the first payment of the annuities that becomes due on or after the
25-4 effective date of this section.
25-5 (b) The increase does not apply to annuities payable under
25-6 Section 814.103, Government Code.
25-7 (c) The amount of the monthly increase is computed by
25-8 multiplying the previous monthly benefit by a percentage determined
25-9 in accordance with the following table:
25-10 LATEST RETIREMENT DATE OR,
25-11 IF APPLICABLE, DATE OF DEATH INCREASE
25-12 Before September 1, 1972 24%
25-13 On or after September 1, 1972, but before September 1, 1973 20%
25-14 On or after September 1, 1973, but before September 1, 1976 18%
25-15 On or after September 1, 1976, but before September 1, 1977 15%
25-16 On or after September 1, 1977, but before September 1, 1978 13%
25-17 On or after September 1, 1978, but before September 1, 1979 10%
25-18 On or after September 1, 1979, but before September 1, 1980 8%
25-19 On or after September 1, 1980, but before September 1, 1981 5%
25-20 On or after September 1, 1981, but before September 1, 1995 2%
25-21 On or after September 1, 1995, but before September 1, 1999 1%
25-22 SECTION 35. Sections 5(b), (c), and (g), Texas Employees
25-23 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
25-24 Texas Insurance Code), are repealed.
25-25 SECTION 36. (a) Except as provided by Subsection (b) of
25-26 this section, Section 814.302(b), Government Code, as amended by
25-27 this Act, applies only to deaths of contributing members of the
26-1 Employees Retirement System of Texas that occur on or after the
26-2 effective date of this Act.
26-3 (b) The surviving spouse of a contributing member of the
26-4 retirement system who died before the effective date of this Act
26-5 and whose account has not been refunded may apply for and receive a
26-6 death benefit annuity under Section 814.302(b), Government Code, as
26-7 amended by this Act. The effective date of an annuity under this
26-8 subsection is the last day of the month in which the member died.
26-9 The amount of an annuity payable under this subsection will be
26-10 determined under the plan terms in effect in the month in which the
26-11 member died. The retirement system shall make a lump sum payment
26-12 of all unpaid annuity payments under this subsection at the time
26-13 the first payment of the annuity becomes due on or after the
26-14 effective date of this Act. This subsection expires December 31,
26-15 1999.
26-16 SECTION 37. Section 814.1082, Government Code, as added by
26-17 this Act, applies only to retirements that occur on or after
26-18 January 1, 2000.
26-19 SECTION 38. This Act takes effect September 1, 1999, except
26-20 Sections 25, 26, and 34, which take effect January 1, 2000.
26-21 SECTION 39. The importance of this legislation and the
26-22 crowded condition of the calendars in both houses create an
26-23 emergency and an imperative public necessity that the
26-24 constitutional rule requiring bills to be read on three several
26-25 days in each house be suspended, and this rule is hereby suspended.