1-1     By:  Coleman (Senate Sponsor - Gallegos)              H.B. No. 3532
 1-2           (In the Senate - Received from the House April 26, 1999;
 1-3     April 27, 1999, read first time and referred to Committee on
 1-4     Intergovernmental Relations; May 6, 1999, reported favorably by the
 1-5     following vote:  Yeas 5, Nays 0; May 6, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to participation in, administration of, and benefits from
 1-9     certain public retirement systems for municipal employees.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 2, Chapter 358, Acts of the 48th
1-12     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
1-13     Civil Statutes), is amended by amending Subdivisions (b), (f), (g),
1-14     (j), and (l) and adding Subdivisions (m) and (n) to read as
1-15     follows:
1-16                 (b)  "Member" means each [city] employee included in
1-17     the Pension System provided for herein and becoming a member
1-18     thereof.
1-19                 (f)  "Separation from Service" or "separated from
1-20     service" means cessation of work for the city, whether caused by
1-21     death, discharge, resignation or any reason other than retirement.
1-22                 (g)  "Employee" means and includes any person eligible
1-23     under this Act whose name appears on a regular full time payroll of
1-24     any such city or Pension System and who is paid a regular salary
1-25     for his services.  Provided, that any elected official who becomes
1-26     a member of the Pension System as permitted by this amended Act
1-27     shall be considered to be and to have been an employee during the
1-28     period of any service as an elected official.
1-29                 (j)  "Previous Service" means all services and work as
1-30     an employee, other than "prior service" as herein defined, which
1-31     preceded a [Group A] member's current period of employment.
1-32                 (l)  "Pension Fund" or "fund" means assets consisting
1-33     of the contributions made by the city, contributions made by any
1-34     member [of Group A], and any income derived from investments made
1-35     from those contributions, which are held in trust for the sole
1-36     benefit of the members and retirees of the Pension System and their
1-37     survivors.
1-38                 (m)  "Effective Retirement Date" means the first day of
1-39     the month retirement begins for a member or former member who is
1-40     eligible for retirement.  If the Pension System receives a member's
1-41     application for normal retirement before the member's separation
1-42     from service or not later than the 30th day after the date of the
1-43     member's separation from service, the effective retirement date is
1-44     the later of the first day of the month following the month of
1-45     separation or the date specified on the application.  If the
1-46     Pension System does not receive the application within 30 days
1-47     after the date of the member's separation from service, the
1-48     effective retirement date is the later of the first day of the
1-49     month after the Pension System receives the application, or the
1-50     date specified on the application.  The effective retirement date
1-51     for a person who qualifies for a service or ordinary disability
1-52     retirement is the later of the day following the person's last day
1-53     of credited service or the date the Pension System receives a
1-54     request to apply for disability retirement.
1-55                 (n)  "Military Service" of any member means service in
1-56     the armed forces of the United States or wartime service in the
1-57     armed forces of the United States or in the Allied Forces, if
1-58     credit for military service has not been granted under any other
1-59     federal or state system or used in any other retirement system.
1-60           SECTION 2.  Section 3, Chapter 358, Acts of the 48th
1-61     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
1-62     Civil Statutes), is amended to read as follows:
1-63           Sec. 3.  PERSONS ELIGIBLE UNDER THIS ACT.  The following
1-64     persons are eligible under this Act:
 2-1                 (a)  Any person who is now a member of any such System
 2-2     under the terms of the original Act, as amended, and who does not
 2-3     make the election provided by Section 22 of this Act shall be a
 2-4     Group A member. A person who becomes an employee on or after
 2-5     September 1, 1999, becomes a Group A member of the Pension System
 2-6     as a condition of employment except as otherwise provided by this
 2-7     section or Section 4 of this Act [The disability and benefit
 2-8     provisions of Sections 11 through 16 of this Act shall apply to
 2-9     Group A members].
2-10                 (b)  Any person who becomes an employee [of such city]
2-11     after September 1, 1981, and before September 1, 1999, shall
2-12     automatically become a Group B member of the Pension System as a
2-13     condition of his employment except as otherwise provided by this
2-14     section or Section 4 of this Act.  A Group A member who has
2-15     terminated employment included in the Pension System, elected under
2-16     Section 16 of this Act to leave the member's contributions in the
2-17     Pension Fund, and met the minimum service requirements for
2-18     retirement at an attained age shall, if the member is reemployed in
2-19     a position included in the Pension System before September 1, 1999,
2-20     elect, not later than the 14th day after the date reemployment
2-21     begins, whether to continue as a Group A member or become a Group B
2-22     member.  [Except as expressly stated otherwise, the eligibility and
2-23     benefit provisions of Sections 22 through 31, inclusive, shall
2-24     apply to such Group B members.]
2-25                 (c)  Elected officials in office on September 1, 1981,
2-26     shall have the option of becoming members of the Pension System.
2-27     Any member or former member of the Pension System who shall
2-28     hereafter be elected to an office of said city shall have the right
2-29     to reinstatement and shall receive credit for prior service and
2-30     previous service as an employee on the same conditions as
2-31     reemployed Group A members;  except that no elected official who
2-32     has retired or does retire from the Pension System on a service or
2-33     disability retirement pension may receive pension payments while
2-34     serving in an elective city office and such payments shall be
2-35     suspended during the term of office.  However, upon leaving office
2-36     such payments shall be restored and credit given for the period
2-37     served.  Except as otherwise provided by this Act, an [Any] elected
2-38     official who is first elected after September 1, 1981, and before
2-39     September 1, 1999, shall become a Group B member and receive credit
2-40     for all previous service.  An elected official who is first elected
2-41     on or after September 1, 1999, becomes a Group A member and is
2-42     entitled to receive credit for all previous service on the same
2-43     conditions as reemployed Group A members, except as otherwise
2-44     provided under this Act.
2-45           SECTION 3.  Section 3A(a),  Chapter 358, Acts of the 48th
2-46     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
2-47     Civil Statutes), is amended to read as follows:
2-48           (a)  A person who, on or after a date determined by the
2-49     Pension Board and before September 1, 1999, becomes a member of, or
2-50     resumes membership in, the Pension System as an employee or elected
2-51     official of a city to which this Act applies shall elect:
2-52                 (1)  by submission of a signed and notarized form, to
2-53     become a Group A member and contribute a portion of the person's
2-54     salary to the Pension Fund as required by this Act; or
2-55                 (2)  to become a Group B member and make no
2-56     contributions to the Pension Fund.
2-57           SECTION 4.  Section 3B(a), Chapter 358, Acts of the 48th
2-58     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
2-59     Civil Statutes), is amended to read as follows:
2-60           (a)  Each member of the Pension System as an employee or
2-61     elected official of a city to which this Act applies may [shall]
2-62     make a one-time, irrevocable election on a date determined by the
2-63     Pension Board[:]
2-64                 [(1)  to retain membership in the group of which the
2-65     employee or official is currently a member;]
2-66                 [(2)  to change membership from Group A to Group B and
2-67     receive a refund of contributions, without interest, made by the
2-68     person to Group A; or]
2-69                 [(3)]  to change membership from Group B to Group A and
 3-1     comply with the requirements of Subsection (b) of this section.
 3-2           SECTION 5.  Section 5, Chapter 358, Acts of the 48th
 3-3     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
 3-4     Civil Statutes), is amended by amending Subsections (d) and (h) and
 3-5     adding Subsections (m), (n), and (o) to read as follows:
 3-6           (d)(1)  In each odd-numbered year, the [The] Board shall
 3-7     elect from the elected members of the Board [its membership
 3-8     annually] a Chairman, Vice-Chairman and Secretary.
 3-9                 (2)  Effective July 1, 1989, or on the effective date
3-10     of the 1989 amendment of this Act, whichever is later, the Pension
3-11     Board may hire or contract with one (1) or more persons to perform
3-12     administrative services for the Pension System.  The services
3-13     include clerical services, record keeping, and the performance of
3-14     such other related administrative functions as assigned by the
3-15     Board.  The Board shall fix and pay the compensation for persons
3-16     performing administrative services under this subdivision from the
3-17     Pension Fund.  Additionally, the Board may provide related benefits
3-18     that the Board considers proper.
3-19                 (3)  Any person employed by the Pension Board to serve
3-20     on the administrative staff who has service credits with the
3-21     Pension System at the time of the person's employment by the Board
3-22     retains the person's status in the System, and any person so
3-23     employed who does not have accrued service credits with the System
3-24     at the time of employment is a Group A member [entitled to join the
3-25     System as a Group B member].
3-26                 (4)  The Pension Board shall adopt a detailed annual
3-27     budget showing its proposed administrative expenditures under
3-28     Subdivision (2) of this subsection for the next fiscal year.
3-29           (h)  The Pension Board shall:
3-30                 (1)  adopt for the administration of the Pension Fund
3-31     written rules and guidelines not inconsistent with this Act;
3-32                 (2)  correct any defect, supply any omission, and
3-33     reconcile any inconsistency that may appear in this Act in a manner
3-34     and to the extent that the Board considers expedient for the
3-35     administration of this Act for the greatest benefit of all members;
3-36     [and]
3-37                 (3)  establish and maintain all records necessary or
3-38     appropriate for the proper administration of the Pension Fund; and
3-39                 (4)  have the authority to institute, conduct, and
3-40     maintain legal action in the name of the Board on behalf of the
3-41     Pension System.
3-42           (m)  The Board may by resolution make the implementation of a
3-43     provision of this Act contingent on receipt of a favorable private
3-44     letter ruling or favorable determination letter from the Internal
3-45     Revenue Service if the Board determines that the action is in the
3-46     best interest of the Pension System.
3-47           (n)  After separation from service or retirement, a member is
3-48     subject to the schedule of benefits and provisions in effect at the
3-49     time of the member's separation from service, except as otherwise
3-50     provided by this Act.
3-51           (o)  A person receiving or eligible for a survivor benefit
3-52     under this Act is subject to the schedule of benefits and
3-53     provisions in effect at the time of separation from service of the
3-54     deceased participant for whom the person is claiming survivor
3-55     status, except as expressly provided otherwise in this Act.
3-56           SECTION 6.  Section 7, Chapter 358, Acts of the 48th
3-57     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
3-58     Civil Statutes), is amended to read as follows:        
3-59           Sec. 7.  CONTRIBUTIONS BY MEMBERS.  Each Group A member of
3-60     the Pension System shall make periodic contributions during
3-61     employment [by the city] in an [the] amount determined by the Board
3-62     and expressed as a percentage [of four percent (4%)] of salary.
3-63     Such contributions shall be deducted by the employer [city] from
3-64     the salary of each such member and paid to the Pension System for
3-65     deposit in [Treasurer of] the Pension Fund [for deposit therein].
3-66           SECTION 7.  Sections 7A(a), (b), and (c), Chapter 358, Acts
3-67     of the 48th Legislature, Regular Session, 1943 (Article 6243g,
3-68     Vernon's Texas Civil Statutes), are amended to read as follows:           
3-69           (a)  The employer [city] shall pick up the contributions
 4-1     required of Group A members by Section 7 of this Act for all
 4-2     salaries earned after December 31, 1987.  The city shall pay the
 4-3     pick-up contributions to the Pension System from the same source of
 4-4     funds that is used in paying salaries to the members.  The pickup
 4-5     of contributions shall be in lieu of contributions by Group A
 4-6     members.  The city may pick up these contributions by a deduction
 4-7     from each Group A member's salary equal to the amount of the
 4-8     member's contributions picked up by the city.  Members do not have
 4-9     the option of choosing to receive the contributed amounts directly
4-10     instead of having them paid by the city to the Pension System.
4-11           (b)  Contributions picked up as provided by Subsection (a) of
4-12     this section shall be treated as employer contributions in
4-13     determining tax treatment of the amounts under the United States
4-14     Internal Revenue Code;  however, the employer [city] shall continue
4-15     to withhold federal income taxes on these picked-up contributions
4-16     until the Internal Revenue Service determines or the federal courts
4-17     rule that pursuant to  Section 414(h) of the Internal Revenue Code
4-18     of 1986 (26 U.S.C. Section 414(h)) these picked-up contributions
4-19     are not includable as gross income of the employee until the time
4-20     that they are distributed or made available.
4-21           (c)  An accounting of member [Member] contributions picked up
4-22     by the employer [city] shall be maintained [credited to the
4-23     individual account of the member] and the contributions shall be
4-24     treated for all other purposes as if the amount were a part of the
4-25     member's salary and had been deducted as provided by Section 7 of
4-26     this Act.
4-27           SECTION 8.  Section 8(b), Chapter 358, Acts of the 48th
4-28     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
4-29     Civil Statutes), is amended to read as follows:
4-30           (b)  Beginning January 1, 1983, the city shall make periodic
4-31     payments into the Pension Fund in an amount equal to the percentage
4-32     contribution rate multiplied by the salaries paid to Group A and
4-33     Group B members of the Fund.  Such contribution rate expressed as a
4-34     percentage shall be based on the results of actuarial valuations
4-35     made at least every three (3) years, with the first such actuarial
4-36     valuation to be made as of January 1, 1982.  The city's
4-37     contribution rate shall be comprised of the normal cost plus the
4-38     level percentage of salary payment required to amortize the
4-39     unfunded actuarial liability over a period of forty (40) years from
4-40     January 1, 1983, calculated on the basis of an acceptable actuarial
4-41     reserve funding method approved by the Pension Board.
4-42     Notwithstanding any other provision of this Act, the city's
4-43     contribution rate, when added to any contributions with respect to
4-44     a qualified governmental excess benefit arrangement maintained in
4-45     accordance with Section 31D of this Act, may not be an amount less
4-46     than the greater of 10 percent of the salaries paid to members or
4-47     two times the contribution rate of Group A members.
4-48           SECTION 9.  Section 9, Chapter 358, Acts of the 48th
4-49     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
4-50     Civil Statutes), is amended to read as follows:
4-51           Sec. 9.  INCREASE IN ANNUITIES.  (a)  In addition to the
4-52     postretirement increases provided by Section [Sections] 11 [and 31]
4-53     of this Act, the Pension Board may increase annuities payable under
4-54     this Act by an amount that does not exceed the annual increase in
4-55     the amount of premiums being paid under a group insurance program
4-56     provided for retirees of the city.
4-57           (b)  The Pension Board may distribute a supplemental payment
4-58     to all retirees, survivors, or DROP participants if:
4-59                 (1)  the Pension System is fully funded;
4-60                 (2)  the Pension System has met the actuarial
4-61     investment assumption for the previous fiscal year; and
4-62                 (3)  the issuance of the supplemental check will not
4-63     cause the city's contribution rate to increase.
4-64           SECTION 10.  Effective September 1, 1999, Sections 11(a) and
4-65     (b), Chapter 358, Acts of the 48th Legislature, Regular Session,
4-66     1943 (Article 6243g, Vernon's Texas Civil Statutes), are amended to
4-67     read as follows:
4-68           (a)  Any member of such Pension System who has attained fifty
4-69     (50) years of age and completed twenty-five (25) or more years of
 5-1     credited service, who has attained fifty-five (55) years of age and
 5-2     completed twenty (20) or more years of credited service, who has
 5-3     attained sixty (60) years of age and completed ten (10) or more
 5-4     years of credited service, or who has attained sixty-two (62) years
 5-5     of age and completed five (5) or more years of credited service
 5-6     shall be eligible for a normal retirement pension.
 5-7           (b)  The amount of the monthly pension for each Group A
 5-8     member shall equal the member's average monthly salary multiplied
 5-9     by two and one-quarter percent (2 1/4%) for each year of the
5-10     member's first twenty (20) years of credited service and two and
5-11     three-quarters percent (2 3/4%) for each additional year, prorated
5-12     to the nearest 12th of a year, of credited service of the member.
5-13     For purposes of this Subsection, such average salary shall be
5-14     computed by adding together the seventy-eight (78) highest biweekly
5-15     salaries paid to a member during his period of credited service and
5-16     dividing the sum by thirty-six (36).  Provided, however, that no
5-17     Group A member's pension shall be more than eighty percent (80%) of
5-18     such average salary; and no Group A member's pension shall be less
5-19     than Eight Dollars ($8) a month for each year of credited service,
5-20     or One Hundred Dollars ($100) a month total pension, whichever is
5-21     the greater amount.
5-22           SECTION 11.  Effective August 1, 2000, Sections 11(a) and
5-23     (b), Chapter 358, Acts of the 48th Legislature, Regular Session,
5-24     1943 (Article 6243g, Vernon's Texas Civil Statutes), are amended to
5-25     read as follows:
5-26           (a)  Any member of such Pension System who has [attained
5-27     fifty (50) years of age and completed twenty-five (25) or more
5-28     years of credited service, who has attained fifty-five (55) years
5-29     of age and completed twenty (20) or more years of credited service,
5-30     who has attained sixty (60) years of age and completed ten (10) or
5-31     more years of credited service, or who has attained sixty-two (62)
5-32     years of age and] completed five (5) or more years of credited
5-33     service and attained sixty-two (62) years of age or a combination
5-34     of years of age and years of credited service equal to the number
5-35     70 shall be eligible for a normal retirement pension.
5-36           (b)  The amount of the monthly pension for each Group A
5-37     member shall equal the member's average monthly salary multiplied
5-38     by two and one-half percent (2 1/2%) [one-quarter percent (2 1/4%)]
5-39     for each year of the member's first twenty (20) years of credited
5-40     service and three and one-quarter percent (3 1/4%) [two and
5-41     three-quarters percent (2 3/4%)] for each additional year, prorated
5-42     to the nearest 12th of a year, of credited service of the member.
5-43     For purposes of this Subsection, such average salary shall be
5-44     computed by adding together the seventy-eight (78) highest biweekly
5-45     salaries paid to a member during his period of credited service and
5-46     dividing the sum by thirty-six (36).  Provided, however, that no
5-47     Group A member's pension shall be more than eighty percent (80%) of
5-48     such average salary; and no Group A member's pension shall be less
5-49     than Eight Dollars ($8) a month for each year of credited service,
5-50     or One Hundred Dollars ($100) a month total pension, whichever is
5-51     the greater amount.
5-52           SECTION 12.  Section 11(g), Chapter 358, Acts of the 48th
5-53     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
5-54     Civil Statutes), is amended to read as follows:
5-55           (g)  Pensions for all [Group A] members, retirees, or their
5-56     survivors shall be adjusted annually upward by three and one-half
5-57     percent (3 1/2%), not compounded.
5-58           SECTION 13.  Section 12, Chapter 358, Acts of the 48th
5-59     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
5-60     Civil Statutes), is amended to read as follows:
5-61           Sec. 12.  DISABILITY PENSIONS.  (a)  Any [Group A] member who
5-62     has completed five (5) [ten (10)] or more years of service and who
5-63     becomes totally disabled for further duty shall, regardless of age,
5-64     be retired for "ordinary disability" and shall receive a monthly
5-65     pension computed in accordance with Section 11(b) for Group A
5-66     members and Section 24 for Group B members.
5-67           (b)  If any [Group A] member who becomes totally disabled for
5-68     further duty by reason of a personal injury sustained or a hazard
5-69     undergone as a result of, and while in the performance of, his
 6-1     duties at some definite place and at some definite time on or after
 6-2     the date of his becoming a [Group A] member, without serious and
 6-3     willful misconduct on his part, shall be retired for "service
 6-4     [accidental] disability" and shall receive a monthly pension equal
 6-5     to twenty percent (20%) of his monthly salary on the date such
 6-6     injury was sustained or such hazard was undergone plus, if a Group
 6-7     A member, one percent (1%) of the above salary for each year of
 6-8     credited service;  provided, that the total pension as so computed
 6-9     will not exceed forty percent (40%) of such monthly salary, or, if
6-10     greater, a monthly pension computed in accordance with Section
6-11     11(b) for a Group A member or with Section 24 for a Group B
6-12     member[, whichever is greater].
6-13           (c)  By "totally disabled" is meant the sustaining of such
6-14     disability as completely and permanently incapacitates a member
6-15     from performing the usual and customary duties which he has been
6-16     performing for such city or other full time duties that could be
6-17     performed by such member.  Before any disability pension is
6-18     allowed, the Pension Board shall require such medical examination
6-19     and such other evidence as it may see fit to establish such total
6-20     disability, as above provided.
6-21           (d)(1)  A person retired for disability under this Act or a
6-22     person receiving survivor benefits as a disabled child under this
6-23     Act must file an annual report of employment activities and
6-24     earnings with the Pension Board.  The Board shall establish the
6-25     form of the report and the time for filing the report [Any Group A
6-26     member receiving a disability pension in accordance with this
6-27     section or any Group B member receiving a disability pension in
6-28     accordance with Section 25 of this Act shall, each April 1, submit
6-29     a sworn affidavit stating his earnings for the previous calendar
6-30     year, if any, obtained from any gainful occupation].  If the
6-31     earnings together with the disability pension being received by any
6-32     member exceed the monthly salary of such member at the time of his
6-33     separation from service, as adjusted annually by cost-of-living
6-34     adjustments made in the manner provided by Section 11(g) [or
6-35     Section 31] of this Act, the Pension Board shall have authority to
6-36     reduce the amount of pension.  A disability pension recipient whose
6-37     disability does not cease after the recipient reaches the date on
6-38     which the recipient is eligible to retire under Section 11(a) or
6-39     sixty-five (65) years of age may not be required to submit the
6-40     annual affidavit of employment activities and earnings [Failure to
6-41     submit an affidavit of earnings or submission of a materially false
6-42     affidavit shall be cause for suspension of the pension upon proper
6-43     action by the Pension Board].
6-44                 (2)  No member shall receive a disability and service
6-45     pension at the same time.  If a member who is already eligible for
6-46     retirement is granted a disability pension and, thereafter,
6-47     although his disability ceases to exist, he does not return to work
6-48     for the city, he shall be entitled to receive a service pension,
6-49     calculated in accordance with Section 11 for Group A members and
6-50     Section 24 for Group B members.  Such service pension shall be
6-51     based on actual service up to the time of disability.  [If a
6-52     disability does not cease before a member becomes sixty-five (65)
6-53     years of age while continuing to receive a disability pension, the
6-54     Pension System shall reclassify the pension as a service pension,
6-55     without regard to whether the person is otherwise eligible to
6-56     receive a service pension.]
6-57                 (3)  When any member has been retired for disability or
6-58     a person is receiving survivor benefits as a disabled child under
6-59     this Act, he shall be subject at all times to re-examination by the
6-60     Pension Board and shall submit himself to such further examination
6-61     as the Pension Board may require.  If any such member shall refuse
6-62     to submit himself to any such examination, the Pension Board may,
6-63     within its discretion, order said payments stopped.  If such a
6-64     member who has been retired under the provisions of this Section
6-65     should thereafter recover so that in the opinion of the Pension
6-66     Board he is able to perform the usual and customary duties formerly
6-67     handled by him for said city, [and such member is reinstated or
6-68     tendered reinstatement to the position he had at the time of his
6-69     retirement, then] the Pension Board shall order such pension
 7-1     payments stopped.
 7-2                 (4)  The result of an examination, report by a
 7-3     physician, or report of employment activities and earnings shall be
 7-4     considered by the Board in determining whether the benefits shall
 7-5     be continued, increased if less than the maximum provided,
 7-6     decreased, or discontinued.  The Board may reduce, suspend, or
 7-7     entirely discontinue all benefits to a person receiving benefits
 7-8     under this Act who, after notice from the Board, fails to appear
 7-9     for a required examination, fails to file a report of employment
7-10     activities and earnings, or files a materially false or misleading
7-11     report of employment activities and earnings or examination result
7-12     or report, as determined by the Board.
7-13           (e)  To apply for a disability pension, a person must be an
7-14     employee or a former employee whose separation from service
7-15     occurred not more than 30 days before the date the Pension System
7-16     receives the person's request to apply for a disability pension as
7-17     a result of a disability that arose during employment.
7-18           SECTION 14.  Effective September 1, 1999, Section 13, Chapter
7-19     358, Acts of the 48th Legislature, Regular Session, 1943 (Article
7-20     6243g, Vernon's Texas Civil Statutes), is amended to read as
7-21     follows:
7-22           Sec. 13.  MONTHLY ALLOWANCE TO SURVIVING SPOUSES AND
7-23     CHILDREN.  (a)  If any [Group A or Group B] member of the Pension
7-24     System, as herein defined, shall die from any cause whatsoever
7-25     after having completed five (5) years of service with the city, or
7-26     if, while in the service of the city, any such member shall die
7-27     from any cause directly resulting from a specific incident in
7-28     [growing out of or in consequence of] the performance of his duty,
7-29     or shall die after he has been retired on pension because of length
7-30     of service or disability and shall leave a surviving spouse, or a
7-31     qualifying child or children, or both a surviving spouse and a
7-32     qualifying child or children, said Board shall order paid monthly
7-33     allowances under this section. [as follows:]
7-34           (b)  A [(a)  To the] surviving spouse of a member who dies
7-35     after having completed five (5) years of active service with the
7-36     city but before beginning to receive retirement benefits, provided
7-37     she or he shall have married such member before the decedent
7-38     terminated employment [with the city], is entitled to a sum equal
7-39     to eighty-five percent (85%) [one-half (1/2)] of the retirement
7-40     benefits that the deceased member would have been entitled to had
7-41     she or he been totally disabled at the time of her or his
7-42     retirement or death, but the allowance payable to the surviving
7-43     spouse shall not in any event be less than Fifty Dollars ($50) a
7-44     month.
7-45           (c)  A [(b)  To the] surviving spouse of a member who dies
7-46     from a cause directly resulting from a specific incident in
7-47     [growing out of or in consequence of] the performance of duty is
7-48     entitled to [with the city,] a sum equal to one hundred percent
7-49     (100%) [eighty percent (80%)] of the deceased member's final
7-50     average salary.
7-51           (d)  A [(c)  To the] surviving spouse of a member who dies
7-52     after having begun to receive retirement benefits is entitled to[,]
7-53     a sum equal to eighty-five percent (85%) [seventy-five percent
7-54     (75%)] of the retirement benefits being received at the time of the
7-55     retiree's death, if the surviving spouse married the decedent
7-56     before the decedent terminated employment [with the city].
7-57           (e) [(d)]  If there is a surviving spouse, each dependent
7-58     child shall receive a death benefit equal to ten percent (10%) of
7-59     the pension the member would have received if the member had been
7-60     disabled at the time of death, to a maximum of twenty percent (20%)
7-61     for all dependent children, with a proportionate reduction in the
7-62     percentage of benefit payable to the surviving spouse until no
7-63     benefit is payable to a dependent child.
7-64           (f) [(e)]  If there is no surviving spouse, each dependent
7-65     child shall receive a death benefit equal to fifty percent (50%)
7-66     [twenty percent (20%)] of what the surviving spouse benefit [the
7-67     pension the member] would have been had there been a surviving
7-68     spouse [received if the member had been disabled at the time of
7-69     death], to a maximum of one hundred percent (100%) of the benefit
 8-1     [forty percent (40%)] for all dependent children.
 8-2           (g) [(f)]  Benefits payable to each dependent child shall be
 8-3     paid if the child is unmarried and:
 8-4                 (1)  is younger than twenty-one (21) [eighteen (18)]
 8-5     years of age [and unmarried]; or
 8-6                 (2)  [is a full-time student and younger than
 8-7     twenty-three (23) years of age; or]
 8-8                 [(3)]  is permanently and totally disabled because of
 8-9     illness, injury, or retardation that began before the death of the
8-10     member and before the child reached eighteen (18) years of age.
8-11           (h) [(g)]  Benefits for a dependent child are payable to the
8-12     guardian of the child.  The term "guardian," as used in this
8-13     subsection, means the person who has the primary responsibility for
8-14     a child's care and support, for example, the surviving spouse,
8-15     legal guardian, managing conservator, or any other person with a
8-16     similar legal relationship to the child.
8-17           SECTION 15.  Effective August 1, 2001, Section 13, Chapter
8-18     358, Acts of the 48th Legislature, Regular Session, 1943 (Article
8-19     6243g, Vernon's Texas Civil Statutes), is amended to read as
8-20     follows:
8-21           Sec. 13.  MONTHLY ALLOWANCE TO SURVIVING SPOUSES AND
8-22     CHILDREN.  (a)  If any [Group A or Group B] member of the Pension
8-23     System, as herein defined, shall die from any cause whatsoever
8-24     after having completed five (5) years of service with the city, or
8-25     if, while in the service of the city, any such member shall die
8-26     from any cause directly resulting from a specific incident in
8-27     [growing out of or in consequence of] the performance of his duty,
8-28     or shall die after he has been retired on pension because of length
8-29     of service or disability and shall leave a surviving spouse, or a
8-30     qualifying child or children, or both a surviving spouse and a
8-31     qualifying child or children, said Board shall order paid monthly
8-32     allowances under this section. [as follows:]
8-33           (b)  A [(a)  To the] surviving spouse of a member who dies
8-34     after having completed five (5) years of active service with the
8-35     city but before beginning to receive retirement benefits, provided
8-36     she or he shall have married such member before the decedent
8-37     terminated employment with the city is entitled to[,] a sum equal
8-38     to one hundred percent (100%) [one-half (1/2)] of the retirement
8-39     benefits that the deceased member would have been entitled to had
8-40     she or he been totally disabled at the time of her or his
8-41     retirement or death, but the allowance payable to the surviving
8-42     spouse shall not in any event be less than Fifty Dollars ($50) a
8-43     month.
8-44           (c)  A [(b)  To the] surviving spouse of a member who dies
8-45     from a cause directly resulting from a specific incident in
8-46     [growing out of or in consequence of] the performance of duty is
8-47     entitled to [with the city,] a sum equal to one hundred percent
8-48     (100%) [eighty percent (80%)] of the deceased member's final
8-49     average salary.
8-50           (d)  A [(c)  To the] surviving spouse of a member who dies
8-51     after having begun to receive retirement benefits is entitled to[,]
8-52     a sum equal to one hundred percent (100%) [seventy-five percent
8-53     (75%)] of the retirement benefits being received at the time of the
8-54     retiree's death, if the surviving spouse married the decedent
8-55     before the decedent terminated employment [with the city].
8-56           (e) [(d)]  If there is a surviving spouse, each dependent
8-57     child shall receive a death benefit equal to ten percent (10%) of
8-58     the pension the member would have received if the member had been
8-59     disabled at the time of death, to a maximum of twenty percent (20%)
8-60     for all dependent children, with a proportionate reduction in the
8-61     percentage of benefit payable to the surviving spouse until no
8-62     benefit is payable to a dependent child.
8-63           (f) [(e)]  If there is no surviving spouse, each dependent
8-64     child shall receive a death benefit equal to fifty percent (50%)
8-65     [twenty percent (20%)] of what the surviving spouse benefit [the
8-66     pension the member] would have been had there been a surviving
8-67     spouse [received if the member had been disabled at the time of
8-68     death], to a maximum of one hundred percent (100%) of the benefit
8-69     [forty percent (40%)] for all dependent children.
 9-1           (g) [(f)]  Benefits payable to each dependent child shall be
 9-2     paid if the child is unmarried and:
 9-3                 (1)  is younger than twenty-one (21) [eighteen (18)]
 9-4     years of age [and unmarried]; or
 9-5                 (2)  [is a full-time student and younger than
 9-6     twenty-three (23) years of age; or]
 9-7                 [(3)]  is permanently and totally disabled because of
 9-8     illness, injury, or retardation that began before the death of the
 9-9     member and before the child reached eighteen (18) years of age.
9-10           (h) [(g)]  Benefits for a dependent child are payable to the
9-11     guardian of the child.  The term "guardian," as used in this
9-12     subsection, means the person who has the primary responsibility for
9-13     a child's care and support, for example, the surviving spouse,
9-14     legal guardian, managing conservator, or any other person with a
9-15     similar legal relationship to the child.
9-16           SECTION 16.  Section 14, Chapter 358, Acts of the 48th
9-17     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
9-18     Civil Statutes), is amended to read as follows:
9-19           Sec. 14.  REFUND OF CONTRIBUTIONS.  If any member's
9-20     employment by the city is terminated for other than a service
9-21     [total and permanent] disability [arising as a result of or as a
9-22     consequence of the performance of his duties] prior to his having
9-23     completed five (5) [ten (10)] years of service with the city, he
9-24     shall not be paid any pension whatsoever, but he shall receive the
9-25     amount paid by him into the Pension Fund by way of salary deduction
9-26     or other authorized contributions without interest as provided in
9-27     Section 16 of this Act.  In the event of his death, if there are no
9-28     widow or children to receive the allowance provided for in Section
9-29     13 above, his beneficiary, and if none, his estate, shall receive
9-30     the said amount.
9-31           SECTION 17.  Section 15, Chapter 358, Acts of the 48th
9-32     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
9-33     Civil Statutes), is amended to read as follows:
9-34           Sec. 15.  In the computation of the years of service of an
9-35     employee who is a [Group A] member, the following rules shall
9-36     apply:
9-37                 (a)  Interruptions of service of three (3) months or
9-38     less shall be treated as continuous service, but such employee
9-39     shall be required to pay into the Pension Fund any contributions
9-40     withdrawn at the time of separation plus the amount of the employee
9-41     contributions allocable to each such period of interruption.
9-42                 (b)  If[, before September 1, 1981,] there were
9-43     interruptions of service of more than three (3) months, no credit
9-44     shall be allowed for the period of an interruption, except as
9-45     otherwise expressly provided in this Act [but credit shall be
9-46     allowed for previous service and prior service if (1) such employee
9-47     shall have repaid to the Pension Fund after resumption of service
9-48     all moneys theretofore withdrawn by him upon separation from
9-49     service, plus interest thereon at the rate of six percent (6%) per
9-50     annum, or (2) if such employee shall at any time have made payments
9-51     to the Pension Fund which, under then existing provisions of law,
9-52     entitled him to credit for previous service].
9-53           SECTION 18.  Section 16, Chapter 358, Acts of the 48th
9-54     Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
9-55     Civil Statutes), is amended to read as follows:
9-56           Sec. 16.  (a)  A [Group A] member who terminates employment
9-57     with the city involuntarily due to a reduction in work force before
9-58     becoming eligible either for a normal retirement pension or for
9-59     vesting may, by written notice to the Pension Board, make an
9-60     irrevocable election to leave the person's contributions in the
9-61     Pension Fund for a period of one (1) year after the date of
9-62     termination.  If, during that period, the person is reemployed by
9-63     the city, all rights and service credit as a [Group A] member shall
9-64     be restored immediately without penalty.  If reemployment with the
9-65     city is not attained within one (1) year after the date of
9-66     termination, [the person ceases to be eligible for reemployment as
9-67     a Group A member, and] all of the payments made by the person into
9-68     the Pension Fund by way of salary deductions or other authorized
9-69     contributions shall be refunded to the person, without interest.
 10-1    If the person is subsequently reemployed [as a Group B member], the
 10-2    person shall be given credit subject to the provisions applicable
 10-3    at the time of reemployment [immediately, without penalty, for all
 10-4    previous service as a Group A member].  When any [Group A] member
 10-5    shall leave [the] employment [of such  city] voluntarily, before
 10-6    becoming eligible for a retirement or disability pension, he shall
 10-7    thereupon cease to be a member of such Pension System, and shall
 10-8    have refunded to him all of the eligible payments made by him into
 10-9    said Pension Fund by way of salary deductions or other authorized
10-10    contributions, without interest, subject to this section.
10-11          (b)  A member whose employment is terminated for a reason
10-12    other than death or receipt of a retirement or disability pension
10-13    after the completion of five (5) years of creditable service may
10-14    elect, in a manner determined by the board, to receive a deferred
10-15    retirement benefit that begins on the effective retirement date.
10-16    The amount of monthly benefit shall be computed in the same manner
10-17    as for a service retirement benefit, but based on average monthly
10-18    salary and creditable service as of the date of separation from
10-19    service and subject to the provisions of this Act in effect on the
10-20    date of separation from service.  [the following provisos:]
10-21                [(a)  If such member has completed twenty-five (25) or
10-22    more years of service at the time of termination of employment but
10-23    has not yet attained the age of fifty (50) years he may, by written
10-24    notice to the Pension Board, make an irrevocable election to leave
10-25    his contributions in the Pension Fund, in which event he shall,
10-26    upon reaching the age of fifty (50) years, be entitled to a pension
10-27    on the basis of the schedule of benefits for retiring Group A
10-28    members that was in effect at the time of his separation from the
10-29    service.]
10-30                [(b)  If such member has completed twenty (20) or more
10-31    years of service at the time of termination of employment but has
10-32    not yet attained the age of fifty-five (55) years he may, by
10-33    written notice to the Pension Board, make an irrevocable election
10-34    to leave his contributions in the Pension Fund, in which event he
10-35    shall, upon reaching the age of fifty-five (55) years, be entitled
10-36    to a pension on the basis of the schedule of benefits for retiring
10-37    Group A members that was in effect at the time of his separation
10-38    from service.]
10-39                [(c)  If such member has completed ten (10) or more
10-40    years of service at the time of termination of employment but has
10-41    not yet attained the age of sixty (60) years he may, by written
10-42    notice to the Pension Board, make an irrevocable election to leave
10-43    his contributions in the Pension Fund, in which event he shall,
10-44    upon reaching the age of sixty (60) years, be entitled to a pension
10-45    on the basis of the schedule of benefits for retiring Group A
10-46    members that was in effect at the time of his separation from
10-47    service.]
10-48          (c) [(d)]  If, while still employed by the city, whether
10-49    eligible for a pension or not, a [Group A] member dies, then,
10-50    unless the provisions of Section 13 hereof are applicable, all of
10-51    his rights in the Pension Fund shall be satisfied by the refund to
10-52    his designated beneficiary, if any, or if none, to his estate, of
10-53    all the payments, if any, theretofore made by him into the Pension
10-54    Fund [by way of employee's contributions], without interest.
10-55          (d) [(e)]  The provisions of Section 13 concerning payments
10-56    to widows, widowers and children shall apply in the case of any
10-57    former [Group A] member who has made the election permitted by
10-58    Subsection [(a),] (b) of this section [or (c), above,] and who dies
10-59    before reaching the age at which he would be entitled to a pension.
10-60    If there be no surviving widow, widower or children, then all of
10-61    such member's rights in the Pension Fund shall be satisfied by the
10-62    refund to his designated beneficiary, if any, or if none, to his
10-63    estate, of all the eligible payments theretofore made by him into
10-64    the Pension Fund by way of employee's contributions, without
10-65    interest.
10-66          (e) [(f)]  It is not the intention of an [this] Amendatory
10-67    Act to change the status of any former member of the Pension System
10-68    whose services with the city were terminated under a previous Act,
10-69    except as otherwise expressly provided. Refunds of contributions
 11-1    above provided  for shall be paid such departing member, his
 11-2    beneficiary or estate in a lump sum, but if, in the opinion of the
 11-3    Pension Board, the funds on hand are too low to justify such lump
 11-4    sum payment, said payment shall be refunded on a monthly basis in
 11-5    such amounts as may be determined by the Pension Board.
 11-6          (f) [(g)]  If any [Group A] member of the pension system,
 11-7    after having made the election permitted by Subsection [(a),] (b)
 11-8    of this section [or (c), above], at the time of separation from the
 11-9    service of the city, shall be reemployed by the city before
11-10    becoming eligible to receive pension benefits, the following
11-11    provisions shall apply to the computation of the pension due such
11-12    member upon his subsequent separation from service [retirement]:
11-13                (1) [1.]  The portion of such member's pension
11-14    attributable to his period of credited service accrued prior to his
11-15    making the aforesaid election shall be calculated on the basis of
11-16    the schedule of benefits for [retiring] members that was in effect
11-17    at the time the member terminated employment attributable to that
11-18    period of credited service [said election was made].
11-19                (2) [2.]  The portion of such member's pension
11-20    attributable to his period of credited service accrued after his
11-21    reemployment by the city shall be calculated on the basis of the
11-22    schedule of benefits for [retiring] members that is in effect at
11-23    the time of such subsequent separation from service [retirement].
11-24    If a member has more than two (2) years of continuous credited
11-25    service following the date of reemployment, any retirement,
11-26    disability, or survivor benefit payable shall be computed under
11-27    this subdivision for all previous  periods of credited service
11-28    without giving effect to Subdivision (1) of this subsection.  If a
11-29    member has two (2) years or less of continuous credited service
11-30    following the date of reemployment, any disability or survivor
11-31    benefit payable shall be computed on the basis of the schedule of
11-32    benefits in effect at the time of the member's previous separation
11-33    from service.
11-34          (g)  A retiree who is reemployed by the city and becomes a
11-35    member shall cease receiving a pension under this Act on
11-36    reemployment.  On subsequent separation, benefits payable shall be
11-37    computed as set forth in Subsections (f)(1) and (2) of this
11-38    section.
11-39          SECTION 19.  Section 20, Chapter 358, Acts of the 48th
11-40    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
11-41    Civil Statutes), is amended to read as follows:
11-42          Sec. 20.  EXEMPTION FROM EXECUTION, ATTACHMENT OR OTHER WRIT.
11-43    No portion of any such Pension Fund, either before or after its
11-44    order of disbursement by said Pension Board, and no amounts due or
11-45    to become due any beneficiary or pensioner, under this Act, shall
11-46    ever be held, seized, taken, subjected to, detained, or levied upon
11-47    by virtue of any execution, attachment, garnishment, injunction, or
11-48    other writ, and no order or decree, or any process or proceeding
11-49    whatsoever, shall issue out of or by any court of this state for
11-50    the payment or satisfaction in whole or in part out of said Pension
11-51    Fund, of any debt, damage, claim, demand, or judgment against any
11-52    such members, pensioners, dependents, or any person whomsoever, nor
11-53    shall such Pension or any part thereof, or any claim thereto, be
11-54    directly or indirectly assigned or transferred and any attempt to
11-55    transfer or assign the same or any part thereof, or any claim
11-56    thereto, shall be void.  Said Fund shall be sacredly held, kept,
11-57    and disbursed for the purposes provided by this Act and for no
11-58    other purpose whatsoever, except that the pensioner, survivor, or
11-59    dependent, at his discretion, may have deducted from his pension an
11-60    amount required by law or a voluntary amount authorized by law and
11-61    the board [the monthly premium cost of the city's group
11-62    hospitalization and life insurance plan].
11-63          SECTION 20.  Section 21, Chapter 358, Acts of the 48th
11-64    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
11-65    Civil Statutes), is amended to read as follows:
11-66          Sec. 21.  MEMBERS IN MILITARY SERVICE.  (a)  Members of the
11-67    Pension System engaged in active military service shall not be
11-68    required to make the [monthly] payments into the Pension Fund
11-69    provided for in this Act, nor shall they lose credit for any
 12-1    previous years of service with the city as a result of such
 12-2    military service.  Furthermore, the city shall not be required to
 12-3    make any [monthly] payments into the Pension Fund for such member
 12-4    while he is engaged in the military service.
 12-5          (b)  A member shall receive credited service for military
 12-6    service if:
 12-7                (1)  the member is employed in a position in the city
 12-8    covered by the pension system immediately before the military
 12-9    service and leaves the position to enter the armed forces of the
12-10    United States;
12-11                (2)  the member's discharge from military service is
12-12    other than dishonorable;
12-13                (3)  the member applies for reemployment within a
12-14    period established by the board, not later than ninety (90) days
12-15    after the date of discharge unless the period is extended by the
12-16    board, and is reemployed by the city;
12-17                (4)  the member makes the required employee
12-18    contributions, if any, and the city makes the required employer
12-19    contributions for the employee's membership for each month of
12-20    service credit during the military service, based on the employee's
12-21    rate of monthly compensation as of the date the employee left the
12-22    employee's position, plus six (6) percent interest on the
12-23    contributions from the date due until the payment is made to the
12-24    fund, with the payments beginning on the date of reemployment and
12-25    completed in the lesser of a period of three times the period of
12-26    the person's military service or before the fifth anniversary of
12-27    reemployment;
12-28                (5)  the period of service claimed under this
12-29    subsection does not exceed five (5) years; and
12-30                (6)  the period of service claimed is in the group in
12-31    which the person was a member immediately before military service.
12-32          (c)  Any member who has military service and who is not
12-33    eligible to claim the service under Subsection (b) may receive
12-34    credited service for the military service on proper action by the
12-35    board, if:
12-36                (1)  the member has completed a minimum of five (5)
12-37    years of credited service;
12-38                (2)  the military service, not to exceed a total of
12-39    sixty (60) months, is claimed only as service earned in the group
12-40    in which the member belongs at the time the member claims the
12-41    service;
12-42                (3)  the member obtains, at the member's cost, a report
12-43    approved by the board of the actuarially determined cost of the
12-44    service for which the member requests credit with service time
12-45    expressed as a number of whole months; and
12-46                (4)  the member pays the actuarially determined cost of
12-47    the service under Subsection (c)(3) of this section, plus all
12-48    administrative costs associated with crediting the service, plus
12-49    six (6) percent interest from the due date of the amounts until
12-50    payment is made to the fund, with the payments made before the
12-51    fifth anniversary of the date the claim for service is made.  [Any
12-52    member who engages in active military service shall, if he returns
12-53    to employment by the city within three (3) months after termination
12-54    of such service, receive credit for his time in such service and
12-55    shall immediately at the beginning of his first full pay period
12-56    begin repaying to the Pension Fund the equivalent of all monthly
12-57    contributions for the total number of months elapsed since he went
12-58    into such service, such repayment to be completed within
12-59    twenty-four (24) months of reemployment, and the city shall pay
12-60    into the Fund one and one-half (1 1/2) times such amount.  Credit
12-61    for military service shall be limited to twenty-four (24) months,
12-62    unless such period is extended by the Pension Board.]
12-63          SECTION 21.  Section 22(a), Chapter 358, Acts of the 48th
12-64    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
12-65    Civil Statutes), is amended to read as follows:
12-66          (a)  Any employee initially hired or reemployed after
12-67    September 1, 1981, and before September 1, 1999, shall become a
12-68    Group B member, except as otherwise provided by this Act.  On or
12-69    after September 1, 1981, any Group A member may irrevocably elect
 13-1    to become a Group B member effective January 1, 1982, by filing an
 13-2    election form with the Board.  Such election must be made prior to
 13-3    December 1, 1981.  A Group A member who makes such an election
 13-4    shall be refunded his or her accumulated contributions without
 13-5    interest and shall not be required to make further contributions as
 13-6    a Group B member.  Such refund shall be made by March 1, 1982.
 13-7    Upon the effective date of the election, all rights as a Group A
 13-8    member shall be extinguished;  however, pensions and benefits shall
 13-9    be based on total credited service as a Group A and Group B member.
13-10    Any former Group A member who was entitled to purchase service
13-11    credit for previous employment under the provisions of this Act in
13-12    effect prior to the date of this amendment and who becomes a Group
13-13    B member may purchase such service credit at any time after
13-14    September 1, 1981, by paying into the fund an amount equal to six
13-15    percent (6%) interest on any contributions previously withdrawn for
13-16    the period from the date of withdrawal to the date of purchase.
13-17          SECTION 22.  Effective August 1, 2000, Section 24, Chapter
13-18    358, Acts of the 48th Legislature, Regular Session, 1943 (Article
13-19    6243g, Vernon's Texas Civil Statutes), is amended to read as
13-20    follows:
13-21          Sec. 24.  AMOUNT OF PENSION.  The amount of the normal
13-22    pension payable to a retired Group B member shall equal the
13-23    member's average monthly salary multiplied by one and
13-24    three-quarters percent (1 3/4%) [one and one-half percent (1 1/2%)]
13-25    for each of the member's first ten (10) years of credited service,
13-26    two percent (2%) [one and three-quarters percent (1 3/4%)] for each
13-27    of the next ten (10) years of credited service, and two and
13-28    one-half percent (2 1/2%) [(2%)] for each additional year, taken to
13-29    the nearest twelfth (12th) of a year, in the period of credited
13-30    service.  The normal pension of a retired Group B member may not
13-31    exceed eighty percent (80%) of the member's average monthly salary
13-32    computed under this section.  Average monthly salary shall be the
13-33    average of the seventy-eight (78) highest biweekly salaries during
13-34    a member's period of credited service.
13-35          SECTION 23.  Section 30, Chapter 358, Acts of the 48th
13-36    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
13-37    Civil Statutes), is amended to read as follows:
13-38          Sec. 30.  Any Group B member who separates from service
13-39    [terminates employment] before completing five (5) years of
13-40    credited service shall have all service credit canceled at the time
13-41    of separation [termination].  However, if such member is reemployed
13-42    by the city within one (1) year of the date of separation
13-43    [termination], then all credit for previous service shall be
13-44    restored.  Further, any member who is reemployed by the city more
13-45    than one (1) year from the date of separation [termination] shall
13-46    receive credit for one (1) year of previous [prior] service for
13-47    each full year of subsequent service.
13-48          SECTION 24.  Section 31A(a), Chapter 358, Acts of the 48th
13-49    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
13-50    Civil Statutes), is amended to read as follows:
13-51          (a)  The Pension Board may pay a member or other beneficiary,
13-52    in lieu of any other benefit payable under this Act and
13-53    notwithstanding anything in this Act to the contrary, in a lump sum
13-54    the present value as a lump sum of any benefit payable to a Group A
13-55    or Group B member that is less than $10,000.  If the lump sum
13-56    present value of the benefit is at least $3,500 but less than
13-57    $10,000, the Board may make a lump sum payment only on written
13-58    request by the member or other beneficiary.  The Board shall make
13-59    any payments under this subsection as soon as practicable after
13-60    eligibility under this section has been determined by the Board [a
13-61    member's termination of employment, death, divorce, or  election to
13-62    receive a previously deferred pension].
13-63          SECTION 25.  Sections 31B(a), (c), (d), (e), and (h), Chapter
13-64    358, Acts of the 48th Legislature, Regular Session, 1943 (Article
13-65    6243g, Vernon's Texas Civil Statutes), are amended to read as
13-66    follows:
13-67          (a)  In this section:
13-68                (1)  "DROP" means the deferred retirement option plan
13-69    established under this Act.
 14-1                (2)  "DROP benefit" means a member's total DROP account
 14-2    balance at the time the member terminates active service.
 14-3                (3)  "DROP member" means a Pension System member who is
 14-4    participating in the DROP.
 14-5                (4)  "DROP entry date" means the date a member ceases
 14-6    to earn service credit and begins earning credit for the member's
 14-7    DROP account.
 14-8                (5)  "DROP election date" means the date the pension
 14-9    system receives a member's election to participate in the DROP in
14-10    the manner and form determined by the pension system and approved
14-11    by the board.
14-12          (c)  A member who is eligible to receive a normal retirement
14-13    pension under this Act and who is [remains] in active service with
14-14    the city, or a person who is eligible to receive a normal
14-15    retirement pension under this Act and who has been separated from
14-16    service within the last thirty (30) days and has not otherwise
14-17    applied for a benefit, may file with the Pension System an election
14-18    to participate in the DROP and receive a DROP benefit.  The period
14-19    of a member's DROP participation, unless revoked as provided under
14-20    this section, ceases when the member terminates employment.  A
14-21    member's DROP entry date, subject to approval by the board, is the
14-22    later of the date the member is eligible to participate in the
14-23    DROP, the DROP entry date requested by the member, or October 1,
14-24    1997.  An [Except as otherwise provided by this section, an]
14-25    election to participate in the DROP is irrevocable, except that any
14-26    active member who elected to participate in the DROP before
14-27    September 1, 1999, may make a one-time revocation of an election,
14-28    in a manner determined by the board.  The effective date of a
14-29    member's participation in the DROP is the first day of the first
14-30    month following the month in which the Board approves the member's
14-31    DROP election.
14-32          (d)  Credits to a member's DROP account consist of:
14-33                (1)  a monthly amount equal to the member's normal
14-34    accrued monthly retirement based on the member's credited service
14-35    and average monthly salary as of the DROP entry date and the
14-36    provisions of this Act applicable on the DROP election date
14-37    [benefit on the effective date of the member's participation in the
14-38    DROP], adjusted for cost-of-living adjustments that would apply if
14-39    the member's DROP entry date had been the person's date of
14-40    eligibility for a normal retirement benefit [occur on or after the
14-41    effective date of the DROP and that otherwise would apply to the
14-42    benefit];
14-43                (2)  a Group [Plan] A member's regular biweekly
14-44    contributions; and
14-45                (3)  interest on the member's DROP account balance
14-46    computed at a rate determined by the Board and compounded at
14-47    intervals designated by the Board, but at least once in each
14-48    thirteen-month period.
14-49          (e)  The accumulation period for credits [Credits] to a
14-50    member's DROP account includes each month beginning with [begin on
14-51    the effective date of] the member's [participation in the] DROP
14-52    entry date through the date [and continue until] the DROP member
14-53    terminates active service with the city.  Amounts are creditable
14-54    for partial crediting periods.  Credits may not be made to a
14-55    member's DROP account for a period that occurs after the member
14-56    terminates active service with the city, except that interest at a
14-57    rate determined by the board may be paid on the amount remaining in
14-58    a person's DROP account after the person terminates active service.
14-59          (h)  A DROP member is ineligible for disability benefits
14-60    provided by this Act, except that a DROP member who incurs a
14-61    service [an on-duty, service-related] disability may revoke the
14-62    member's DROP election.
14-63          SECTION 26.  Section 31C(e), Chapter 358, Acts of the 48th
14-64    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
14-65    Civil Statutes), is amended to read as follows:
14-66          (e)  Accrued benefits under this Act become 100 percent
14-67    vested for a member on the date the member has completed five (5)
14-68    years of credited service, except as otherwise provided by law.
14-69          SECTION 27.  Section 33, Chapter 358, Acts of the 48th
 15-1    Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
 15-2    Civil Statutes), is amended to read as follows:
 15-3          Sec. 33.  CITIES WITH PENSION PROVISIONS IN THEIR CHARTERS.
 15-4    The terms of this Act shall not apply to any city operating a
 15-5    municipal employees pension program under the terms and provisions
 15-6    of its charter, unless a city's municipal employees are already
 15-7    covered by this Act.
 15-8          SECTION 28.  Sections 25, 26, 27, and 31, Chapter 358, Acts
 15-9    of the 48th Legislature, Regular Session, 1943 (Article 6243g,
15-10    Vernon's Texas Civil Statutes), are repealed.
15-11          SECTION 29.  Except as otherwise expressly provided by this
15-12    Act, this Act takes effect September 1, 1999.
15-13          SECTION 30.  The importance of this legislation and the
15-14    crowded condition of the calendars in both houses create an
15-15    emergency and an imperative public necessity that the
15-16    constitutional rule requiring bills to be read on three several
15-17    days in each house be suspended, and this rule is hereby suspended.
15-18                                 * * * * *