By: Armbrister, Barrientos S.B. No. 1130
A BILL TO BE ENTITLED
AN ACT
1-1 relating to programs and systems administered by the Employees
1-2 Retirement System of Texas.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 805.008, Government Code, is amended by
1-5 amending Subsection (c) and adding Subsection (h) to read as
1-6 follows:
1-7 (c) As an alternative to Subsections (a) and (b) and except
1-8 as provided by Subsection (h), the systems by rule may require the
1-9 system from which service credit is transferred to pay monthly an
1-10 amount equal to the portion of the actual value of the monthly
1-11 payment of the annuity that represents the percentage of the total
1-12 amount of service credit that is transferred.
1-13 (h) If a person elects to receive a partial lump sum payment
1-14 under the law governing the system from which the person is
1-15 retiring, a transfer of an amount equal to the portion of the
1-16 actual value of a lump sum payment that represents the percentage
1-17 of the amount of service credit transferred shall be made at the
1-18 time the lump sum payment is made.
1-19 SECTION 2. Subsection (a), Section 812.101, Government Code,
1-20 is amended to read as follows:
1-21 (a) A member of the retirement system may withdraw all of
1-22 the member's accumulated contributions for service credited in the
1-23 employee class of membership if:
1-24 (1) the member does not hold a position included in
2-1 that class;
2-2 (2) the member does not assume or resume, during the
2-3 30 days after the date on [calendar month following the month in]
2-4 which the member terminates employment, a position included in that
2-5 class; and
2-6 (3) the member's application for withdrawal is filed
2-7 before the member assumes or resumes a position included in that
2-8 class.
2-9 SECTION 3. Section 812.104, Government Code, is amended by
2-10 amending Subsection (a) and adding Subsection (c) to read as
2-11 follows:
2-12 (a) Except as provided by Subsection (c), deposits
2-13 [Deposits] representing interest or membership fees that are
2-14 required of a member to establish service credit under Section
2-15 813.202, 813.302, 813.402, or 813.502 are not refundable.
2-16 (c) At the time a service retirement, disability retirement,
2-17 or death benefit annuity becomes payable, the retirement system
2-18 shall refund any contributions, interest, or membership fees used
2-19 to establish service credit that is not used in computing the
2-20 amount of the annuity.
2-21 SECTION 4. Subsection (b), Section 813.104, Government Code,
2-22 is amended to read as follows:
2-23 (b) Except as provided by Subsection (c), payments may not
2-24 be made under a rule adopted under this section:
2-25 (1) to establish or reestablish service credit of a
2-26 person who is currently [has] retired or has died; [or]
3-1 (2) to establish current service under Section
3-2 813.201; or
3-3 (3) to establish service credit under Section 813.511.
3-4 SECTION 5. Subsection (b), Section 813.201, Government Code,
3-5 is amended to read as follows:
3-6 (b) A member may not, after August 31, 1997 [1991], accrue
3-7 or establish [a total of more than 50 years of] service credit in
3-8 the employee class of membership when the total amount of service
3-9 credit, multiplied by the percentage in effect for computing
3-10 annuities under Section 814.105, would exceed the number 100. When
3-11 the maximum amount [a total of 50 years] of service credit is
3-12 accrued or established by a member in the employee class, member
3-13 and state contributions cease, although the member retains
3-14 membership subject to Section 812.005.
3-15 SECTION 6. Subchapter F, Chapter 813, Government Code, is
3-16 amended by adding Section 813.511 to read as follows:
3-17 Sec. 813.511. CREDIT FOR ACCUMULATED ANNUAL LEAVE. (a) A
3-18 member who holds a position included in the employee class of
3-19 membership during the month that includes the effective date of the
3-20 member's retirement and who retires based on service or a
3-21 disability is entitled to service credit in the retirement system
3-22 for the member's annual leave that has accumulated and is unused on
3-23 the last day of employment. Annual leave is creditable in the
3-24 retirement system at the rate of one month of service credit for
3-25 each 20 days, or 160 hours, of accumulated annual leave and one
3-26 month for each fraction of days or hours remaining after division
4-1 of the total hours of accumulated annual leave by 160.
4-2 (b) A member who holds a position included in the employee
4-3 class may use annual leave creditable under this section to satisfy
4-4 service requirements for retirement under Section 814.104 or
4-5 814.107 if the annual leave attributed to the eligibility
4-6 requirements remains otherwise unused on the last day of
4-7 employment.
4-8 (c) Except as provided by Subsection (d), the disbursing
4-9 officer of each department or agency shall, before the 11th day
4-10 after the effective date of retirement of one or more employees of
4-11 the department or agency, certify to the retirement system:
4-12 (1) the name of each person whose retirement from the
4-13 department or agency, and from state service, became effective
4-14 during the preceding month; and
4-15 (2) the amount of the person's accumulated annual
4-16 leave on the last day of employment.
4-17 (d) The disbursing officer of a department or agency that
4-18 employs a member who applies for retirement under Subsection (b)
4-19 shall, not more than 90 or less than 30 days before the effective
4-20 date of the member's retirement, certify to the retirement system
4-21 the amount of the member's accumulated and unused annual leave.
4-22 The officer shall immediately notify the retirement system if the
4-23 member uses annual leave after the date of certification.
4-24 (e) On receipt of a certification under Subsection (c) or
4-25 (d), the retirement system shall grant any credit to which a
4-26 retiring member or retiree who is a subject of the certification is
5-1 entitled. An increase in the computation of an annuity because of
5-2 credit provided by this section after a certification under
5-3 Subsection (d) begins with the first payment that becomes due after
5-4 certification.
5-5 (f) The retirement system shall cancel the retirement of a
5-6 person who used annual leave creditable under this section to
5-7 qualify for service retirement if the annual leave is otherwise
5-8 used by the person before the effective date of retirement.
5-9 SECTION 7. Section 814.104, Government Code, is amended by
5-10 amending Subsection (a) and adding Subsection (c) to read as
5-11 follows:
5-12 (a) Except as provided by Section 814.102 or by rule adopted
5-13 under Section 813.304(d) or 803.202(2), a member who has service
5-14 credit in the retirement system is eligible to retire and receive a
5-15 service retirement annuity if the member:
5-16 (1) [if the member] is at least 60 years old and has
5-17 at least 5 years of service credit in the employee class; or
5-18 (2) has at least five years of service credit in the
5-19 employee class and [if] the sum of the member's age and amount of
5-20 service credit in the employee class, including months of age and
5-21 credit, equals or exceeds the number 80.
5-22 (c) For the sole purpose of determining eligibility to
5-23 receive a service retirement annuity, the retirement system shall
5-24 consider service performed as a participant in the optional
5-25 retirement program under Chapter 830 as if it were service for
5-26 which credit is established in the retirement system.
6-1 SECTION 8. Subchapter B, Chapter 814, Government Code, is
6-2 amended by adding Section 814.1042 to read as follows:
6-3 Sec. 814.1042. SERVICE FOR CERTAIN GOVERNMENTAL EMPLOYERS.
6-4 (a) For the sole purpose of determining eligibility to receive a
6-5 service retirement annuity under Section 814.104(a)(2), the
6-6 retirement system shall consider not more than 60 months, or
6-7 portions of months, of service performed for a Texas governmental
6-8 employer by a member who has at least five years of service credit,
6-9 excluding military service, in the employee class as if it were
6-10 service for which credit is established in the retirement system.
6-11 (b) A member who seeks the application of this section must
6-12 provide documentation satisfactory to the retirement system of the
6-13 amount of service performed for the governmental employer.
6-14 (c) Service described by this section may not be used in
6-15 determining eligibility for participation in the Texas Employees
6-16 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
6-17 Texas Insurance Code).
6-18 SECTION 9. Subsections (c), (d), and (e), Section 814.107,
6-19 Government Code, are amended to read as follows:
6-20 (c) The standard combined service retirement annuity that is
6-21 payable under this section is based on retirement on or after the
6-22 attainment of the normal retirement age, which for purposes of this
6-23 section is the earlier of either the age of 50 or the age at which
6-24 the sum of the member's age and amount of service credit in the
6-25 employee class equals the number 80 [at the age of 50 or older]. A
6-26 law enforcement or custodial officer who retires before attaining
7-1 the normal retirement age [of 50] is entitled to an annuity that is
7-2 actuarially reduced from the annuity available at the normal
7-3 retirement age [of 50] to the law enforcement or custodial officer
7-4 service credit annuity amount available at the sum of the member's
7-5 age and amount of employee class service credit. The annuity
7-6 [earlier retirement age and] is payable from the law enforcement
7-7 and custodial officer supplemental retirement fund.
7-8 (d) A member who retires under this section retires
7-9 simultaneously from the employee class of membership. Benefits for
7-10 service in the employee class of membership become payable from the
7-11 trust fund established by Section 815.310 at the normal retirement
7-12 age [of 50] under the computation provided by Section 814.105.
7-13 Optional retirement annuities provided by Section 814.108 are
7-14 available to a member eligible to receive a service retirement
7-15 annuity under this section, but the same optional plan and designee
7-16 must be selected for the portion of the annuity payable from the
7-17 law enforcement and custodial officer supplemental retirement fund
7-18 and the portion payable from the trust fund established by Section
7-19 815.310.
7-20 (e) The amount payable from the law enforcement and
7-21 custodial officer supplemental retirement fund is reducible by the
7-22 amount paid from the trust fund established by Section 815.310 for
7-23 service as a law enforcement or custodial officer. The total
7-24 combined amount of an annuity under this section may not be less
7-25 than the authorized benefit under Subsection (b) subtracted by any
7-26 amount necessary because of selection of an optional annuity,
8-1 because of retirement before the normal retirement age [of 50], or
8-2 as provided by Subsection (f).
8-3 SECTION 10. Subchapter B, Chapter 814, Government Code, is
8-4 amended by adding Section 814.1082 to read as follows:
8-5 Sec. 814.1082. PARTIAL LUMP SUM OPTION. (a) A member who
8-6 is eligible for an unreduced service retirement annuity may select
8-7 a standard retirement annuity or an optional retirement annuity
8-8 described by Section 814.108 together with a partial lump sum
8-9 distribution.
8-10 (b) The amount of the lump sum distribution under this
8-11 section may not exceed the sum of 36 months of a standard service
8-12 retirement annuity computed without regard to this section.
8-13 (c) The service retirement annuity selected by the member
8-14 shall be actuarially reduced to reflect the lump sum option
8-15 selected by the member and shall be actuarially equivalent to a
8-16 standard or optional service retirement annuity, as applicable,
8-17 without the partial lump sum distribution. The annuity and lump
8-18 sum shall be computed to result in no actuarial loss to the
8-19 retirement system.
8-20 (d) Unless otherwise specified in rules adopted by the board
8-21 of trustees, the lump sum distribution will be made as a single
8-22 payment payable at the time that the first monthly annuity payment
8-23 is paid to the retiree.
8-24 (e) The amount of the lump sum distribution will be deducted
8-25 from any amount otherwise payable under Section 814.505.
8-26 (f) The partial lump sum option under this section may be
9-1 elected only once by a member and may not be elected by a retiree.
9-2 A member retiring under the proportionate retirement program under
9-3 Chapter 803 is not eligible for the partial lump sum option.
9-4 (g) The board of trustees may adopt rules for the
9-5 implementation of this section and may authorize the option to be
9-6 used for a death benefit annuity. This section does not apply to a
9-7 disability retirement annuity.
9-8 SECTION 11. Section 814.202, Government Code, is amended by
9-9 adding Subsection (d) to read as follows:
9-10 (d) For the sole purpose of determining eligibility to
9-11 receive a disability retirement annuity under Subsection (a)(3),
9-12 the retirement system shall consider service performed as a
9-13 participant in the optional retirement program under Chapter 830 as
9-14 if it were service for which credit is established in the
9-15 retirement system.
9-16 SECTION 12. Subsection (b), Section 814.302, Government
9-17 Code, is amended to read as follows:
9-18 (b) If a person dies who, at the time of death, was a
9-19 contributing member of a retirement program administered by the
9-20 board of trustees and was eligible, having met the requirements of
9-21 service credit and attained age, for a service retirement annuity
9-22 based on service in one or more board-administered programs or was
9-23 a contributing member of the employee class, had at least three
9-24 years of service credit in that class, and would have been eligible
9-25 to retire under the proportionate retirement program under Chapter
9-26 803, but was not eligible to select a death benefit plan, the
10-1 person's surviving spouse may select a plan in the same manner that
10-2 the decedent could have made the selection if the decedent had
10-3 retired on the last day of the month in which the person died. If
10-4 there is no surviving spouse, the guardian of the decedent's
10-5 surviving minor children may select a plan. If the decedent is not
10-6 survived by a spouse or minor children, an annuity may not be paid
10-7 under this subsection.
10-8 SECTION 13. Section 815.103, Government Code, is amended by
10-9 adding Subsection (d) to read as follows:
10-10 (d) The board of trustees may accept on behalf of the
10-11 retirement system gifts of money or other property from any public
10-12 or private source.
10-13 SECTION 14. Subsection (e), Section 815.110, Government
10-14 Code, is amended to read as follows:
10-15 (e) The board of trustees [annually] shall select an
10-16 independent auditor to perform an annual [a] financial audit of the
10-17 retirement system. The selection shall be in accordance with the
10-18 requirements of Chapter 2254 for obtaining the services of a
10-19 certified public accountant [made under a competitive bidding
10-20 process in which the state auditor is eligible to bid].
10-21 SECTION 15. Subsection (f), Section 815.202, Government
10-22 Code, is amended to read as follows:
10-23 (f) The board of trustees may specifically delegate any
10-24 right, power, or duty imposed or conferred on the executive
10-25 director by law to another employee of the retirement system. If
10-26 not so specifically delegated, the executive director may delegate
11-1 to another employee of the retirement system any right, power, or
11-2 duty assigned to the executive director.
11-3 SECTION 16. Section 815.208, Government Code, is amended by
11-4 adding Subsection (d) to read as follows:
11-5 (d) The board of trustees may compensate employees of the
11-6 retirement system, whether subject to or exempt from the overtime
11-7 provisions of the Fair Labor Standards Act of 1938 (29 U.S.C.
11-8 Section 201 et seq.), at the rate equal to the employees' regular
11-9 rate of pay for work performed on a legal holiday or for other
11-10 compensatory time accrued, when taking compensatory time off would
11-11 be disruptive to the system's normal business functions.
11-12 SECTION 17. Section 815.322, Government Code, is amended to
11-13 read as follows:
11-14 Sec. 815.322. TRANSFER OF ASSETS TO ADJUST AMOUNT IN
11-15 RETIREMENT ANNUITY RESERVE ACCOUNT. After making the transfers
11-16 required by Section 815.318, the executive director [board of
11-17 trustees] shall make a transfer to make the amount in the
11-18 retirement annuity reserve account equal, as of the last day of
11-19 each fiscal year, to the actuarial present value of the annuities
11-20 for which a transfer of assets has been made as required by Section
11-21 815.319. The transfer shall be:
11-22 (1) a transfer from the retirement annuity reserve
11-23 account to the state accumulation account of the amount by which
11-24 the amount in the retirement annuity reserve account exceeds the
11-25 actuarial present value of the annuities; or
11-26 (2) a transfer from the state accumulation account to
12-1 the retirement annuity reserve account of the amount by which the
12-2 actuarial present value of the annuities exceeds the amount in the
12-3 retirement annuity reserve account.
12-4 SECTION 18. Subsection (a), Section 815.502, Government
12-5 Code, is amended to read as follows:
12-6 (a) If a valid application for payment based on money or
12-7 credit in a member's individual account in the employees saving
12-8 account is not filed with the retirement system before the
12-9 expiration of five years after the last day of the most recent
12-10 month of service for which the member has credit in the retirement
12-11 system, the retirement system may [shall] mail a notice to the
12-12 member at the member's most recent address as shown on system
12-13 records. If no address is available or if the notice is returned
12-14 unclaimed, the retirement system shall cause a notice to be
12-15 published in a newspaper of general circulation in the state.
12-16 SECTION 19. Section 815.511, Government Code, is amended to
12-17 read as follows:
12-18 Sec. 815.511. [APPEAL OF] ADMINISTRATIVE DECISION; APPEAL.
12-19 (a) The board of trustees may modify or delete a proposed finding
12-20 of fact or conclusion of law contained in a proposal for decision
12-21 submitted by an administrative law judge or other hearing examiner,
12-22 or make alternative findings of fact and conclusions of law, in a
12-23 proceeding considered to be a contested case under Chapter 2001.
12-24 The board of trustees shall state in writing the specific reason
12-25 for its determination and may adopt rules for the implementation of
12-26 this subsection.
13-1 (b) A person aggrieved by a decision of any retirement
13-2 system administered by the board of trustees denying or limiting
13-3 membership, service credit, or eligibility for or the amount of
13-4 benefits payable by a system may appeal the decision to the board.
13-5 The appeal is considered to be an appeal of a contested case under
13-6 the administrative procedure law, Chapter 2001. On judicial appeal
13-7 the standard of review is by substantial evidence.
13-8 SECTION 20. Subsection (b), Section 840.103, Government
13-9 Code, is amended to read as follows:
13-10 (b) Not later than December 31 [Before November 2] of each
13-11 even-numbered year, the retirement system shall certify to the
13-12 Legislative Budget Board and to the budget division of the
13-13 governor's office for review:
13-14 (1) an actuarial valuation of the retirement system to
13-15 determine the percentage of annual payroll required from the state
13-16 to finance fully the retirement system as provided by Section
13-17 840.106;
13-18 (2) an estimate of the amount necessary to pay the
13-19 state's contribution under Subdivision (1) for the following
13-20 biennium; and
13-21 (3) as a separate item, an estimate of the amount, in
13-22 addition to anticipated receipts from membership fees, required to
13-23 administer the retirement system for the following biennium.
13-24 SECTION 21. Subdivision (18), Subsection (a), Section 3,
13-25 Texas Employees Uniform Group Insurance Benefits Act (Article
13-26 3.50-2, Vernon's Texas Insurance Code), is amended to read as
14-1 follows:
14-2 (18) "Institution of higher education" means any
14-3 public community/junior college or senior college or university, or
14-4 any other agency of higher education within the meaning and
14-5 jurisdiction of Chapter 61, Education Code, except The University
14-6 of Texas System and The Texas A&M University System. [The term
14-7 does not include Texas Tech University and the University of
14-8 Houston System unless either of these entities elects to
14-9 participate in accordance with Section 3A of this Act.]
14-10 SECTION 22. Section 3A, Texas Employees Uniform Group
14-11 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
14-12 Code), is amended to read as follows:
14-13 Sec. 3A. PARTICIPATION BY CERTAIN ENTITIES [CERTAIN
14-14 INSTITUTIONS MAY ELECT TO PARTICIPATE]. (a) The Texas Municipal
14-15 Retirement System and the Texas County and District Retirement
14-16 System shall [Texas Tech University, the University of Houston
14-17 System, or both may] participate in the Texas Employees Uniform
14-18 Group Insurance [Benefits] Program administered by the Employees
14-19 Retirement System of Texas under this Act. Participation is
14-20 limited to the officers and employees of the systems; eligible
14-21 dependents of the officers and employees; persons who have retired
14-22 from either system, who receive or are eligible to receive an
14-23 annuity from either system or under Chapter 803, Government Code,
14-24 based on at least 10 years of service credit, who have at least
14-25 three years of service with a department, including either system,
14-26 whose employees are authorized to participate in the program
15-1 provided by this Act, and who were officers or employees of either
15-2 system; and eligible dependents of the retired officers and
15-3 employees. An officer or employee of either system is an employee
15-4 for purposes of this Act, and a retired officer or employee of
15-5 either system is an annuitant for purposes of this Act.
15-6 Participation under this subsection does not include the governing
15-7 bodies of either system, the municipalities or subdivisions
15-8 participating in either system, or the trustees, officers, or
15-9 employees, or their dependents, of the participating municipalities
15-10 or subdivisions. A participant described by this subsection may
15-11 not receive a state contribution for premiums [The university or
15-12 system must notify the trustee of its election to participate not
15-13 later than April 1, 1992].
15-14 (b) A person who began employment with, or became an officer
15-15 of, the Texas Turnpike Authority within the three-year period
15-16 preceding August 31, 1997, who was an officer or employee of the
15-17 Texas Turnpike Authority on that date, who became an officer or
15-18 employee of the North Texas Tollway Authority on September 1, 1997,
15-19 and who retires or is eligible to retire with at least 10 years of
15-20 service credit under the proportionate retirement program
15-21 established by Chapter 803, Government Code, or under one of the
15-22 public retirement systems to which Chapter 803 applies may
15-23 participate in the programs and coverages provided by this Act as
15-24 an annuitant and may obtain coverage for the person's dependents as
15-25 any other participating annuitant. The North Texas Tollway
15-26 Authority is responsible for payment of the contributions the state
16-1 would make if the annuitants were state employees.
16-2 SECTION 23. Section 4B, Texas Employees Uniform Group
16-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
16-4 Code), is amended by adding Subsection (c-1) to read as follows:
16-5 (c-1) The board of trustees may modify or delete a proposed
16-6 finding of fact or conclusion of law contained in a proposal for
16-7 decision submitted by an administrative law judge or other hearing
16-8 examiner, or make alternative findings of fact and conclusions of
16-9 law, in a proceeding considered to be a contested case under
16-10 Chapter 2001, Government Code. The board of trustees shall state
16-11 in writing the specific reason for the determination and may adopt
16-12 rules for the implementation of this subsection.
16-13 SECTION 24. Section 5, Texas Employees Uniform Group
16-14 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
16-15 Code), is amended by amending Subsections (a), (d), and (f) and
16-16 adding Subsection (e) to read as follows:
16-17 (a) The trustee is authorized, empowered, and directed to
16-18 establish plans of group coverages for active employees and retired
16-19 employees which in the trustee's discretion may include but are not
16-20 necessarily limited to the following: group life coverages,
16-21 accidental death and dismemberment, health benefits plans,
16-22 including but not limited to hospital care and benefits, surgical
16-23 care and treatment, medical care and treatment, dental care,
16-24 obstetrical benefits, prescribed drugs, medicines, and prosthetic
16-25 devices and supplemental benefits, supplies, and services in
16-26 conformity with the provisions of this Act, protection against
17-1 either long or short term loss of salary and any other group
17-2 coverages which in the discretion of the trustee with consultation
17-3 from the advisory committee shall be deemed advisable. All rules
17-4 and regulations shall be promulgated pursuant thereto. The trustee
17-5 shall determine the coverages desired for state employees and other
17-6 eligible participants [will submit this information to the State
17-7 Board of Insurance for any recommendations as to the types and
17-8 sufficiency of such coverages. The State Board of Insurance will
17-9 notify the board of trustees within 30 days as to any such
17-10 recommendations and will furnish the board of trustees with a list
17-11 of all carriers authorized to do business in the State of Texas who
17-12 would be eligible to bid on the coverages that are to be insured by
17-13 a carrier]. The trustee will notify eligible [those] carriers that
17-14 competitive bidding will be conducted and that they are to submit
17-15 their bids to the trustee [State Board of Insurance] by a specified
17-16 date if they wish to bid on the contract. An actuary selected by
17-17 the trustee shall advise the trustee as to the actuarial soundness
17-18 of the bids received. [The State Board of Insurance will, after
17-19 the designated closing date of receiving bids, examine and evaluate
17-20 the bidding contracts and certify their actuarial soundness to the
17-21 trustee within 15 days from the closing date.] The trustee shall
17-22 select the desired carrier or carriers and will notify the bidding
17-23 eligible carriers as to the results of the bidding. The trustee
17-24 shall select the desired carrier or carriers to provide services
17-25 that will [which shall] be in the best interest of the employees
17-26 covered by this Act. The trustee is not required to select the
18-1 lowest bid but shall take into consideration other factors such as
18-2 ability to service contracts, past experience, financial ability,
18-3 and other relevant criteria. Should the trustee select a carrier
18-4 whose bid differs from that advertised, such deviation shall be
18-5 recorded and the reasons for such deviation shall be fully
18-6 justified and explained in the minutes of the next meeting of the
18-7 trustee. The trustee shall submit the coverages provided by the
18-8 group plan for competitive bidding at least every six years.
18-9 (d) No department shall establish, continue, or authorize
18-10 payroll deductions or reductions for any benefits or coverage as
18-11 provided in this Act without the express approval of the trustee[,
18-12 except for benefits from the deferred compensation program
18-13 established pursuant to Chapter 197, Acts of the 63rd Legislature,
18-14 Regular Session, 1973 (Article 6252-3b, Vernon's Texas Civil
18-15 Statutes)].
18-16 (e) Before the first day of each state fiscal biennium, the
18-17 trustee shall estimate for an average 60-day period during the
18-18 biennium the expenditures from the fund anticipated for self-funded
18-19 plans, considering claims and administrative expenses for those
18-20 plans that are projected to be incurred. The trustee shall place
18-21 the estimated amount in a contingency reserve fund to provide for
18-22 adverse fluctuations in claims or administrative expenses. The
18-23 trustee shall include in each request for legislative
18-24 appropriations to the program the amount the trustee determines to
18-25 be necessary to maintain the contingency reserve fund at the level
18-26 required by this subsection. The trustee may invest and reinvest
19-1 any portion of the contingency reserve fund under the standard of
19-2 care provided by Section 815.307, Government Code, considering the
19-3 functional need to provide for adverse fluctuations in claims or
19-4 administrative expenses. The interest on, earnings of, and
19-5 proceeds from the sale of investments of assets in the contingency
19-6 reserve fund shall be credited to the fund.
19-7 (f) The trustee, in its sole discretion and in accordance
19-8 with the requirements of this section, shall determine those plans
19-9 of coverages for which the trustee does not intend to purchase
19-10 insurance and which it intends to provide directly from the
19-11 Employees Life, Accident, and Health Insurance and Benefits Fund.
19-12 Any plan of coverages for which the trustee does not purchase
19-13 insurance but provides under this Act on a self-funded basis is
19-14 exempt from any other insurance law unless the law expressly
19-15 applies to this plan or this Act. A qualified actuary selected by
19-16 the trustee shall advise the trustee as to an actuarially sound
19-17 level of contributions required to provide coverages directly from
19-18 the fund. [The trustee shall make an estimate of the unrestricted
19-19 balance of the fund. Unless such estimated unrestricted balance is
19-20 equal to at least 10 percent of the total benefits expected to be
19-21 provided directly from the fund as a result of claims incurred
19-22 during the fiscal year, the trustee shall include in the
19-23 contributions required the amount necessary to establish an
19-24 unrestricted balance in the fund of not less than 10 percent. The
19-25 unrestricted balance shall be placed in a contingency reserve fund
19-26 to provide for adverse fluctuations in future charges, claims,
20-1 costs, or expenses of the program.]
20-2 SECTION 25. Section 8, Texas Employees Uniform Group
20-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
20-4 Code), is amended to read as follows:
20-5 Sec. 8. REINSURANCE. The trustee, in its sole discretion
20-6 and under conditions it approves, may reinsure any coverage that it
20-7 has determined will be provided directly from the fund in
20-8 accordance with Section 5(f) of this Act. [(a) The trustee shall
20-9 arrange with any carrier or carriers issuing any policy or policies
20-10 under this Act for the reinsurance, under conditions approved by
20-11 the trustee, of portions of the total amount of insurance under
20-12 such policy or policies, with other qualified carriers which elect
20-13 to participate in the reinsurance.]
20-14 [(b) The trustee shall determine for and in advance of a
20-15 policy year which qualified carriers are eligible to participate as
20-16 reinsurers and the amount of insurance under a policy or policies
20-17 which is to be allocated to the issuing company and reinsurers.
20-18 The trustee shall make this determination when a participating
20-19 company withdraws.]
20-20 SECTION 26. Section 10, Texas Employees Uniform Group
20-21 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
20-22 Code), is amended by adding Subsection (c) to read as follows:
20-23 (c) The records of a participant in the Texas Employees
20-24 Uniform Group Insurance Program in the custody of the trustee, or
20-25 of an administrator or carrier acting on behalf of the trustee, are
20-26 confidential and not subject to disclosure and are exempt from the
21-1 public access provisions of Chapter 552, Government Code, except as
21-2 provided by this subsection. Records may be released to a
21-3 participant or to an authorized attorney, family member, or
21-4 representative acting on behalf of the participant. The trustee
21-5 may release the records to an administrator, carrier, or agent or
21-6 attorney acting on behalf of the trustee, to another governmental
21-7 entity, to a medical provider of the participant for the purpose of
21-8 carrying out the purposes of this Act, or to a party in response to
21-9 a subpoena issued under applicable law. The records of a
21-10 participant remain confidential after release to a person as
21-11 authorized by this subsection. The records of a participant may
21-12 become part of the public record of an administrative or judicial
21-13 proceeding related to a contested case under this Act, unless the
21-14 records are closed to public access by a protective order issued
21-15 under applicable law.
21-16 SECTION 27. Subdivision (3), Subsection (e), Section 11,
21-17 Texas Employees Uniform Group Insurance Benefits Act (Article
21-18 3.50-2, Vernon's Texas Insurance Code), is amended to read as
21-19 follows:
21-20 (3) An annuitant [A retiree] participating in optional
21-21 term life insurance coverage is not eligible for premium-waived
21-22 extended insurance benefits [or accelerated life insurance
21-23 benefits] if the total disability [or terminal condition,
21-24 respectively,] begins after the date of retirement. Accidental
21-25 death and dismemberment insurance coverage ceases on the date of
21-26 retirement, regardless of age. An annuitant participating in
22-1 optional term life insurance coverage is eligible for accelerated
22-2 life insurance benefits as provided by rules adopted under the
22-3 authority of Subsection (d) of this section, as added by Chapter
22-4 1048, Acts of the 75th Legislature, Regular Session, 1997.
22-5 SECTION 28. Section 11A, Texas Employees Uniform Group
22-6 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
22-7 Code), is amended to read as follows:
22-8 Sec. 11A. PAYMENT OF ACCELERATED BENEFITS; IRREVOCABLE
22-9 DESIGNATION OF BENEFICIARY. [(a)] The trustee shall adopt rules
22-10 requiring a group life insurance program provided to employees,
22-11 including annuitants or dependents, to include a provision allowing
22-12 the employee, annuitant, or dependent to make, in conjunction with
22-13 receipt of a viatical settlement, an irrevocable designation of
22-14 beneficiary for part or all of the group life coverage benefits. A
22-15 viatical settlement is not valid for any coverage under the Texas
22-16 Employees Uniform Group Insurance Program unless the employee,
22-17 annuitant, or dependent has a terminal illness or terminal injury,
22-18 as defined by rules adopted by the trustee, at the time application
22-19 for benefits is made.[:]
22-20 [(1) elect to receive an accelerated benefit under
22-21 Article 3.50-6, Insurance Code, subject to the provisions of that
22-22 article; or]
22-23 [(2) make, in conjunction with receipt of a viatical
22-24 settlement, an irrevocable designation of a beneficiary for all or
22-25 a part of the group life coverage benefits.]
22-26 [(b)] In this section, "viatical settlement" has the meaning
23-1 assigned by Article 3.50-6A, Insurance Code.
23-2 SECTION 29. Section 13, Texas Employees Uniform Group
23-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
23-4 Code), is amended by adding Subsection (e) to read as follows:
23-5 (e) Except as provided by Section 13A of this Act, on
23-6 application to the trustee and arrangement for payment of
23-7 contributions, a former member of a board or commission described
23-8 by Section 3(a)(5)(A)(vi) of this Act or a former member of the
23-9 governing body of an institution of higher education remains
23-10 eligible for participation in a group health coverage plan offered
23-11 under this Act as long as no lapse in coverage occurs after the end
23-12 of the former member's term. A participant described by this
23-13 subsection may not receive a state contribution for premiums. The
23-14 participant's contribution for coverage under a group health
23-15 coverage plan may not be greater than the contribution for
23-16 continuation coverage under the Consolidated Omnibus Budget
23-17 Reconciliation Act of 1985 (Pub. L. No. 99-272).
23-18 SECTION 30. Subsection (d), Section 13B, Texas Employees
23-19 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
23-20 Texas Insurance Code), is amended to read as follows:
23-21 (d) Each employee shall be enrolled in the premium
23-22 conversion benefit portion of the cafeteria plan [unless the
23-23 employee notifies the trustee in writing that the employee elects
23-24 not to be enrolled]. Notwithstanding any provision of Section 16B
23-25 of this Act to the contrary, the trustee may not establish a fee or
23-26 charge for administering the premium conversion benefit portion of
24-1 the cafeteria plan.
24-2 SECTION 31. The Texas Employees Uniform Group Insurance
24-3 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is
24-4 amended by adding Section 16A to read as follows:
24-5 Sec. 16A. MANAGEMENT OF ASSETS. The trustee may commingle
24-6 for investment purposes the assets of any fund created under this
24-7 Act with any other fund created under this Act or any other trust
24-8 fund administered by the trustee, as long as proportionate
24-9 ownership records are maintained and credited.
24-10 SECTION 32. The Texas Employees Uniform Group Insurance
24-11 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is
24-12 amended by adding Section 16C to read as follows:
24-13 Sec. 16C. EMPLOYEES' HEALTH CARE STABILIZATION TRUST FUND.
24-14 (a) The employees' health care stabilization trust fund is a
24-15 special fund in the treasury outside the general revenue fund.
24-16 (b) The fund is composed of:
24-17 (1) money transferred to the fund at the direction of
24-18 the legislature;
24-19 (2) gifts and grants contributed to the fund; and
24-20 (3) the returns received as interest on, and from
24-21 investment of, money in the fund.
24-22 (c) The trustee shall administer the fund. The trustee may
24-23 manage and invest the money in the fund under the standard of care
24-24 provided by Section 815.307, Government Code. In administering the
24-25 fund, the trustee shall make investments in a manner that preserves
24-26 the purchasing power of the fund's assets.
25-1 (d) Money in the fund may not be spent for any purpose,
25-2 except that the interest and investment returns of the fund may be
25-3 appropriated only for the purpose of stabilizing the cost of state
25-4 and participant contributions for health care coverage under this
25-5 Act by minimizing to the greatest extent possible increases in
25-6 those contributions.
25-7 (e) The fund is exempt from the application of Section
25-8 403.095, Government Code.
25-9 SECTION 33. Subsection (a), Section 18, Texas Employees
25-10 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
25-11 Texas Insurance Code), is amended to read as follows:
25-12 (a) The group benefits advisory committee is composed of 26
25-13 voting members as provided by this section. The office of the
25-14 attorney general, the office of the comptroller, the Railroad
25-15 Commission of Texas, the General Land Office, and the Department of
25-16 Agriculture are entitled to be represented by one member each on
25-17 the committee, who may be appointed by the governing body of the
25-18 state agency or elected by and from the employees of the agency, as
25-19 determined by rule by the governing body of the agency. One
25-20 employee shall be elected from each of the remaining eight largest
25-21 state agencies that are governed by appointed officers by and from
25-22 the employees of those agencies. One nonvoting member shall be the
25-23 executive director of the Employees Retirement System of Texas.
25-24 One member shall be an expert in employee benefit issues from the
25-25 private sector, appointed by the governor. One member shall be an
25-26 expert in employee benefits issues from the private sector,
26-1 appointed by the lieutenant governor. One member shall be a
26-2 retired state employee appointed by the trustee. One member shall
26-3 be a state employee of a state agency eligible for membership in
26-4 the Texas Small State Agency Task Force [other than one of the
26-5 eight largest state agencies], appointed by the trustee. Not more
26-6 than one employee from a particular state agency may serve on the
26-7 committee. Each of the seven largest institutions of higher
26-8 education, as determined by the number of employees on the payroll
26-9 of an institution, shall elect one member of the committee from
26-10 among persons who have each been nominated by a petition signed by
26-11 at least 300 employees. Two members shall be employees of
26-12 institutions of higher education, other than the seven largest
26-13 institutions of higher education, who are appointed by the Texas
26-14 Higher Education Coordinating Board, but not more than one employee
26-15 shall be from any one institution. The members shall elect a
26-16 presiding officer from their membership to serve a one-year term.
26-17 SECTION 34. Subsection (b), Section 19, Texas Employees
26-18 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
26-19 Texas Insurance Code), is amended to read as follows:
26-20 (b) A surviving spouse of an employee or a retiree who is
26-21 entitled to monthly benefits paid by a retirement system named in
26-22 this Act may, following the death of the employee or retiree, elect
26-23 to retain the spouse's authorized coverages and also retain
26-24 authorized coverages for any dependent of the spouse, at the group
26-25 rate for employees, provided such coverage was previously secured
26-26 by the employee or retiree for the spouse or dependent, and the
27-1 spouse directs the applicable retirement system to deduct required
27-2 contributions from the monthly benefits paid the surviving spouse
27-3 by the retirement system. A surviving dependent of a retiree who
27-4 was receiving monthly benefits paid by a retirement system named in
27-5 this Act may, after the death of the retiree and if the retiree
27-6 leaves no surviving spouse, elect to retain any coverage previously
27-7 secured by the retiree, at the group rate for employees, until the
27-8 dependent becomes ineligible for coverage for a reason other than
27-9 the death of the member of the group. A dependent who makes an
27-10 election under this subsection and who is entitled to monthly
27-11 benefits from a retirement system named in this Act based on the
27-12 service of the deceased retiree must direct the applicable
27-13 retirement system to deduct required contributions for the coverage
27-14 from the monthly benefits paid the surviving dependent by the
27-15 retirement system. If funds are specifically appropriated for the
27-16 purpose, the state shall pay the same portion of the cost of the
27-17 required contributions for a deceased retiree's surviving spouse or
27-18 other surviving dependent who elects to retain coverage under this
27-19 subsection as it pays for similar dependent coverage for an
27-20 employee or retiree participating in the program.
27-21 SECTION 35. Subsection (a), Section 403.026, Government
27-22 Code, as added by Chapter 1153, Acts of the 75th Legislature,
27-23 Regular Session, 1997, is amended to read as follows:
27-24 (a) The comptroller shall conduct a study each biennium to
27-25 determine the number and type of fraudulent claims for medical or
27-26 health care benefits submitted:
28-1 (1) under the state Medicaid program; or
28-2 (2) [under group health insurance programs
28-3 administered through the Employees Retirement System of Texas for
28-4 active and retired state employees; or]
28-5 [(3)] by or on behalf of a state employee and
28-6 administered by the attorney general under Chapter 501, Labor Code.
28-7 SECTION 36. Section 609.007, Government Code, is amended by
28-8 adding Subsection (d) to read as follows:
28-9 (d) A contract created under this section need not be in
28-10 writing and may be communicated to the plan administrator
28-11 electronically or by any other means approved by the plan's
28-12 trustees.
28-13 SECTION 37. Section 609.505, Government Code, is amended by
28-14 amending Subsection (a) and adding Subsections (c) and (d) to read
28-15 as follows:
28-16 (a) The board of trustees, in accordance with rules adopted
28-17 under this subchapter, may contract with a [qualified] vendor
28-18 qualified to participate in a deferred compensation plan.
28-19 (c) A vendor or investment product having an ownership or
28-20 other financial interest in the contractor selected by the board of
28-21 trustees to administer a deferred compensation plan is not
28-22 qualified to participate in that plan.
28-23 (d) The board of trustees shall select vendors or investment
28-24 products based on the quality of investment performance, proven
28-25 ability to manage institutional assets, minimum net worth
28-26 requirements, fee structure, compliance with applicable federal and
29-1 state laws, and other criteria established by the board. The board
29-2 of trustees shall determine the minimum and maximum number of
29-3 vendors and investment products that may be offered by a plan at
29-4 any particular time.
29-5 SECTION 38. Section 615.001, Government Code, is amended to
29-6 read as follows:
29-7 Sec. 615.001. DEFINITION. In this chapter, "minor child"
29-8 means a child who, on the date of the death of an individual listed
29-9 under Section 615.003, is younger than 18 [21] years of age.
29-10 SECTION 39. (a) Monthly payments of a retirement or death
29-11 benefit annuity by the Employees Retirement System of Texas under
29-12 Subtitle B, Title 8, Government Code, are increased beginning with
29-13 the first payment of the annuities that becomes due on or after the
29-14 effective date of this section.
29-15 (b) The increase does not apply to annuities payable under
29-16 Section 814.103, Government Code.
29-17 (c) The amount of the monthly increase is computed by
29-18 multiplying the previous monthly benefit by a percentage determined
29-19 in accordance with the following table:
29-20 LATEST RETIREMENT DATE OR,
29-21 IF APPLICABLE, DATE OF DEATH INCREASE
29-22 Before September 1, 1962 45%
29-23 On or after September 1, 1962, but before September 1, 1965 40%
29-24 On or after September 1, 1965, but before September 1, 1972 38%
29-25 On or after September 1, 1972, but before September 1, 1978 35%
29-26 On or after September 1, 1978, but before September 1, 1979 25%
30-1 On or after September 1, 1979, but before September 1, 1984 20%
30-2 On or after September 1, 1984, but before September 1, 1986 15%
30-3 On or after September 1, 1986, but before September 1, 1987 11%
30-4 On or after September 1, 1987, but before September 1, 1989 10%
30-5 On or after September 1, 1989, but before September 1, 1990 9%
30-6 On or after September 1, 1990, but before September 1, 1991 8%
30-7 On or after September 1, 1991, but before September 1, 1992 7%
30-8 On or after September 1, 1992, but before September 1, 1993 6%
30-9 On or after September 1, 1993, but before September 1, 1995 5%
30-10 On or after September 1, 1995, but before September 1, 1996 4%
30-11 On or after September 1, 1996, but before September 1, 1997 3%
30-12 On or after September 1, 1997, but before September 1, 1998 2%
30-13 On or after September 1, 1998, but before September 1, 1999 1%
30-14 SECTION 40. Subsections (b), (c), and (g), Section 5, Texas
30-15 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
30-16 Vernon's Texas Insurance Code), are repealed.
30-17 SECTION 41. (a) Except as provided by Subsection (b) of
30-18 this section, Subsection (b), Section 814.302, Government Code, as
30-19 amended by this Act, applies only to deaths of contributing members
30-20 of the Employees Retirement System of Texas that occur on or after
30-21 the effective date of this Act.
30-22 (b) The surviving spouse of a contributing member of the
30-23 Employees Retirement System of Texas who died before the effective
30-24 date of this Act and whose account has not been refunded may apply
30-25 for and receive a death benefit annuity under Subsection (b),
30-26 Section 814.302, Government Code, as amended by this Act. The
31-1 effective date of an annuity under this subsection is the last day
31-2 of the month in which the member died. The amount of an annuity
31-3 payable under this subsection will be determined under the plan
31-4 terms in effect in the month in which the member died. The
31-5 retirement system shall make a lump sum payment of all unpaid
31-6 annuity payments under this subsection at the time the first
31-7 payment of the annuity becomes due on or after the effective date
31-8 of this Act. This subsection expires December 31, 1999.
31-9 SECTION 42. Notwithstanding Section 3A, Texas Employees
31-10 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
31-11 Texas Insurance Code), as amended by this Act, a person who retires
31-12 from the Texas County and District Retirement System or the Texas
31-13 Municipal Retirement System on or after the effective date of this
31-14 Act but before September 1, 2002, is not required to meet the
31-15 requirement of three years of service for a department whose
31-16 employees are authorized to participate in the program provided by
31-17 that Act to continue participation authorized by that section.
31-18 SECTION 43. Section 814.1082, Government Code, as added by
31-19 this Act, applies only to retirements that occur on or after
31-20 January 1, 2000.
31-21 SECTION 44. This Act takes effect September 1, 1999, except
31-22 Sections 27, 28, and 39, which take effect January 1, 2000.
31-23 SECTION 45. The importance of this legislation and the
31-24 crowded condition of the calendars in both houses create an
31-25 emergency and an imperative public necessity that the
31-26 constitutional rule requiring bills to be read on three several
32-1 days in each house be suspended, and this rule is hereby suspended.