1-1     By:  Turner of Coleman (Senate Sponsor - Lucio)       H.B. No. 3642
 1-2           (In the Senate - Received from the House May 11, 1999;
 1-3     May 12, 1999, read first time and referred to Committee on State
 1-4     Affairs; May 14, 1999, reported favorably by the following vote:
 1-5     Yeas 6, Nays 0; May 14, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to certain administrative procedures of the Teacher
 1-9     Retirement System of Texas.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 822.005, Government Code, is amended by
1-12     adding Subsection (d) to read as follows:
1-13           (d)  The retirement system shall adopt procedures to track
1-14     and compile information of all applications filed under this
1-15     section from the time an application is made until any warrant for
1-16     the refund is issued by the retirement system.
1-17           SECTION 2.  Section 824.004, Government Code, is amended by
1-18     adding Subsection (e) to read as follows:
1-19           (e)  The retirement system may not require a person filing a
1-20     waiver of benefits under this section to submit a sworn affidavit
1-21     in order to receive the accumulated contributions.
1-22           SECTION 3.  Section 825.307, Government Code, is amended to
1-23     read as follows:
1-24           Sec. 825.307.  Member Savings Account.  (a)  The retirement
1-25     system shall deposit in a member's individual account in the member
1-26     savings account:
1-27                 (1)  the amount of contributions to the retirement
1-28     system that is deducted from the member's compensation;
1-29                 (2)  the portion of a deposit made on or after
1-30     resumption of membership that represents the amount of retirement
1-31     benefits received;
1-32                 (3)  the portion of a deposit to reinstate service
1-33     credit previously canceled that represents the amount withdrawn or
1-34     refunded;
1-35                 (4)  the portion of a deposit to establish membership
1-36     service credit previously waived that is required by Section
1-37     823.202(b)(1);
1-38                 (5)  the portion of a deposit to establish membership
1-39     service credit for service performed after retirement that is
1-40     required by Section 823.502(c)(3) or (c)(5);
1-41                 (6)  the portion of a deposit to establish military
1-42     service credit required by Section 823.302(c);
1-43                 (7)  the portion of a deposit to establish equivalent
1-44     membership service credit required by Section 823.401(d),
1-45     823.402(e)(1) or (e)(2), or 823.3021(f)(1); and
1-46                 (8)  interest earned on money in the account as
1-47     provided by Subsections (b) and (c) and Section 825.313(c)
1-48     [825.313(b)(1)].
1-49           (b)  Interest on a member's contribution is earned monthly
1-50     and computed at the rate of five percent a year.  Except as
1-51     provided by Subsection (c), interest is computed based on the mean
1-52     [average] balance in the member's account during that [the
1-53     preceding] fiscal year and[.  The retirement system] shall be
1-54     credited [credit interest] on August 31 of each year.
1-55           (c)  If a person's membership in the retirement system is
1-56     terminated during a fiscal year, the interest on the member's
1-57     account is computed based on the mean balance in the account from
1-58     September 1 of the fiscal year until:
1-59                 (1)  the last day of the month that preceded the month
1-60     in which the membership termination occurred if termination was
1-61     caused by the member's death or the withdrawal of contributions; or
1-62                 (2)  the effective date of retirement if membership
1-63     termination was caused by retirement.
1-64           (d)  Accumulated contributions in an individual's account on
 2-1     the date that the individual's membership in the retirement system
 2-2     is terminated do not earn interest after that date.
 2-3           SECTION 4.  Section 825.309(a), Government Code, is amended
 2-4     to read as follows:
 2-5           (a)  The retirement system shall transfer to the retired
 2-6     reserve account:
 2-7                 (1)  from the member savings account, an amount equal
 2-8     to the accumulated contributions in a member's individual account
 2-9     when the member retires or when the retirement system approves the
2-10     payment of any benefit authorized under this subtitle on the
2-11     member's retirement or death;
2-12                 (2)  from the state contribution account, an amount
2-13     certified by the actuary or determined under actuarial tables
2-14     adopted by the board of trustees pursuant to Section 825.105 as
2-15     necessary to provide for the payment of the benefit as it becomes
2-16     due; and
2-17                 (3)  from the interest account, the amount required by
2-18     Section 825.313(b)(1) [825.313(b)(2)].
2-19           SECTION 5.  Section 825.312(a), Government Code, is amended
2-20     to read as follows:
2-21           (a)  The retirement system shall deposit in the expense
2-22     account:
2-23                 (1)  money transferred from the interest account under
2-24     Section 825.313(d) [825.313(c)] and
2-25                 (2)  money received from the Texas Public School
2-26     Employees Group Insurance Program for service performed for the
2-27     program by the retirement system.
2-28           SECTION 6.  Section 825.313, Government Code, is amended to
2-29     read as follows:
2-30           Sec. 825.313.  Transfers From Interest or State Contribution
2-31     Account.  (a)  Annually, the retirement system shall transfer from
2-32     the interest account to the state contribution account amounts
2-33     accumulated under Section 825.311(2).
2-34           (b)  On August 31 of each year, the retirement system shall
2-35     make the following transfers from the interest account:
2-36                 (1)  [to the member savings account, an amount computed
2-37     using the rate prescribed by Section 825.307(b);]
2-38                 [(2)]  to the retired reserve account, an amount equal
2-39     to 4-3/4  percent of the average balance of the retired reserve
2-40     account for that fiscal year or, if the transfer is authorized by
2-41     resolution of the board, an amount computed at a greater rate if
2-42     the actuary recommends the greater rate to adequately fund the
2-43     retired reserve account; and
2-44                 (2) [(3)]  to the state contribution account, the
2-45     amount remaining in the interest account after the other transfers
2-46     required or authorized by this section are made.
2-47           (c)  On August 31 of each year, the retirement system shall
2-48     transfer from the interest account to the member savings account an
2-49     amount computed under Section 825.307(b) unless membership is
2-50     terminated in that fiscal year.  If membership is terminated during
2-51     the fiscal year, the retirement system shall transfer from the
2-52     interest account to the member savings account an amount computed
2-53     under Section 825.307(c).
2-54           (d)  The board of trustees, by resolution recorded in its
2-55     minutes, may transfer from the interest account to the expense
2-56     account an amount necessary to cover the expenses of the retirement
2-57     system for the fiscal year that exceed the amount of operating
2-58     expenses appropriated under Section 825.404(d) and that are
2-59     required to perform the fiduciary duties of the board, including
2-60     the expense of servicing mortgages insured by the Federal Housing
2-61     Administration under the National Housing Act (12 U.S.C. Section
2-62     1701 et seq.).
2-63           SECTION 7.  Section 825.314(b), Government Code, is amended
2-64     to read as follows:
2-65           (b)  The staff of the retirement system shall report to the
2-66     board at each board meeting the amounts and uses since the
2-67     preceding board meeting of any money expended by the system from
2-68     amounts transferred under Section 825.313(d) [825.313(c)] and
2-69     include an explanation of why the amounts were needed to perform
 3-1     the fiduciary duties of the board.  The retirement system annually
 3-2     shall prepare and issue to each contributing member and annuitant
 3-3     and to the governor, lieutenant governor, and speaker of the house
 3-4     of representatives a summary of the reports presented during the
 3-5     preceding year to the board.
 3-6           SECTION 8.  Section 825.407(f), Government Code, is amended
 3-7     to read as follows:
 3-8           (f)  Any portion of the reimbursement required under this
 3-9     section to be made for a fiscal year by a general academic teaching
3-10     institution or a medical and dental unit that remains unpaid on the
3-11     first day of the next fiscal year accrues interest, beginning on
3-12     that day or the due date for the portion, whichever is later, at an
3-13     annual rate, compounded monthly, equal to the rate established
3-14     under Section 825.313(b)(1) [825.313(b)], plus two percent.
3-15           SECTION 9.  Section 825.408(a), Government Code, is amended
3-16     to read as follows:
3-17           (a)  An employing district that fails to remit, before the
3-18     11th day after the last day of a month, all member and employer
3-19     deposits required by this subchapter to be remitted by the district
3-20     for the month shall pay to the retirement system, in addition to
3-21     the deposits, interest on the unpaid amounts at an annual rate
3-22     compounded monthly.  The rate of interest is the rate established
3-23     under Section 825.313(b)(1) [825.313(b)(2)], plus two percent.
3-24     Interest required under this section is creditable to the interest
3-25     account.
3-26           SECTION 10.  Subchapter F, Chapter 825, Government Code, is
3-27     amended by adding Section 825.518 to read as follows:
3-28           Sec. 825.518.  ANNUAL REPORT.  The Teacher Retirement System
3-29     of Texas shall submit a statistical analysis based on information
3-30     compiled under Section 822.005(d) not later than the 25th day of
3-31     the month following the end of each fiscal year to the governor,
3-32     the lieutenant governor, the speaker of the house of
3-33     representatives, the executive director of the State Pension Review
3-34     Board, the appropriate oversight committees of the house and
3-35     senate, and the Legislative Budget Board.
3-36           SECTION 11.  Section 830.203(f), Government Code, is amended
3-37     to read as follows:
3-38           (f)  Any portion of the reimbursement required under this
3-39     section to be made for a fiscal year by a general academic teaching
3-40     institution or a medical and dental unit that remains unpaid on the
3-41     first day of the next fiscal year accrues interest, beginning on
3-42     that day or the due date for the portion, whichever is later, at an
3-43     annual rate, compounded monthly, equal to the rate established
3-44     under Section 825.313(b)(1) [825.313(b)], plus two percent.
3-45           SECTION 12.  This Act takes effect September 1, 1999, and
3-46     applies only to a withdrawal application that is submitted under
3-47     Section 822.005, Government Code, as amended by this Act, on or
3-48     after that date.  A withdrawal application submitted before the
3-49     effective date of this Act is governed by the law in effect on the
3-50     day the withdrawal application was filed, and the former law is
3-51     continued in effect for that purpose.
3-52           SECTION 13.  The importance of this legislation and the
3-53     crowded condition of the calendars in both houses create an
3-54     emergency and an imperative public necessity that the
3-55     constitutional rule requiring bills to be read on three several
3-56     days in each house be suspended, and this rule is hereby suspended.
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