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1-33 credit previously canceled that represents the amount withdrawn or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.
3-57 * * * * *