1-1 By: Armbrister, Barrientos S.B. No. 1130
1-2 (In the Senate - Filed March 10, 1999; March 11, 1999, read
1-3 first time and referred to Committee on State Affairs;
1-4 April 16, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; April 16, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1130 By: Shapleigh
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to programs and systems administered by the Employees
1-11 Retirement System of Texas.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 805.008, Government Code, is amended by
1-14 amending Subsection (c) and adding Subsection (h) to read as
1-15 follows:
1-16 (c) As an alternative to Subsections (a) and (b) and except
1-17 as provided by Subsection (h), the systems by rule may require the
1-18 system from which service credit is transferred to pay monthly an
1-19 amount equal to the portion of the actual value of the monthly
1-20 payment of the annuity that represents the percentage of the total
1-21 amount of service credit that is transferred.
1-22 (h) If a person elects to receive a partial lump sum payment
1-23 under the law governing the system from which the person is
1-24 retiring, a transfer of an amount equal to the portion of the
1-25 actual value of a lump sum payment that represents the percentage
1-26 of the amount of service credit transferred shall be made at the
1-27 time the lump sum payment is made.
1-28 SECTION 2. Subsection (a), Section 812.101, Government Code,
1-29 is amended to read as follows:
1-30 (a) A member of the retirement system may withdraw all of
1-31 the member's accumulated contributions for service credited in the
1-32 employee class of membership if:
1-33 (1) the member does not hold a position included in
1-34 that class;
1-35 (2) the member does not assume or resume, during the
1-36 30 days after the date on [calendar month following the month in]
1-37 which the member terminates employment, a position included in that
1-38 class; and
1-39 (3) the member's application for withdrawal is filed
1-40 before the member assumes or resumes a position included in that
1-41 class.
1-42 SECTION 3. Section 812.104, Government Code, is amended by
1-43 amending Subsection (a) and adding Subsection (c) to read as
1-44 follows:
1-45 (a) Except as provided by Subsection (c), deposits
1-46 [Deposits] representing interest or membership fees that are
1-47 required of a member to establish service credit under Section
1-48 813.202, 813.302, 813.402, or 813.502 are not refundable.
1-49 (c) At the time a service retirement, disability retirement,
1-50 or death benefit annuity becomes payable, the retirement system
1-51 shall refund any contributions, interest, or membership fees used
1-52 to establish service credit that is not used in computing the
1-53 amount of the annuity.
1-54 SECTION 4. Subsection (b), Section 813.104, Government Code,
1-55 is amended to read as follows:
1-56 (b) Except as provided by Subsection (c), payments may not
1-57 be made under a rule adopted under this section:
1-58 (1) to establish or reestablish service credit of a
1-59 person who is currently [has] retired or has died; [or]
1-60 (2) to establish current service under Section
1-61 813.201; or
1-62 (3) to establish service credit under Section 813.511.
1-63 SECTION 5. Subsection (b), Section 813.201, Government Code,
1-64 is amended to read as follows:
2-1 (b) A member may not, after August 31, 1997 [1991], accrue
2-2 or establish [a total of more than 50 years of] service credit in
2-3 the employee class of membership when the total amount of service
2-4 credit, multiplied by the percentage in effect for computing
2-5 annuities under Section 814.105, would exceed the number 100. When
2-6 the maximum amount [a total of 50 years] of service credit is
2-7 accrued or established by a member in the employee class, member
2-8 and state contributions cease, although the member retains
2-9 membership subject to Section 812.005.
2-10 SECTION 6. Subchapter F, Chapter 813, Government Code, is
2-11 amended by adding Section 813.511 to read as follows:
2-12 Sec. 813.511. CREDIT FOR ACCUMULATED ANNUAL LEAVE. (a) A
2-13 member who holds a position included in the employee class of
2-14 membership during the month that includes the effective date of the
2-15 member's retirement and who retires based on service or a
2-16 disability is entitled to service credit in the retirement system
2-17 for the member's annual leave that has accumulated and is unused on
2-18 the last day of employment. Annual leave is creditable in the
2-19 retirement system at the rate of one month of service credit for
2-20 each 20 days, or 160 hours, of accumulated annual leave and one
2-21 month for each fraction of days or hours remaining after division
2-22 of the total hours of accumulated annual leave by 160.
2-23 (b) A member who holds a position included in the employee
2-24 class may use annual leave creditable under this section to satisfy
2-25 service requirements for retirement under Section 814.104 or
2-26 814.107 if the annual leave attributed to the eligibility
2-27 requirements remains otherwise unused on the last day of
2-28 employment.
2-29 (c) Except as provided by Subsection (d), the disbursing
2-30 officer of each department or agency shall, before the 11th day
2-31 after the effective date of retirement of one or more employees of
2-32 the department or agency, certify to the retirement system:
2-33 (1) the name of each person whose retirement from the
2-34 department or agency, and from state service, became effective
2-35 during the preceding month; and
2-36 (2) the amount of the person's accumulated annual
2-37 leave on the last day of employment.
2-38 (d) The disbursing officer of a department or agency that
2-39 employs a member who applies for retirement under Subsection (b)
2-40 shall, not more than 90 or less than 30 days before the effective
2-41 date of the member's retirement, certify to the retirement system
2-42 the amount of the member's accumulated and unused annual leave.
2-43 The officer shall immediately notify the retirement system if the
2-44 member uses annual leave after the date of certification.
2-45 (e) On receipt of a certification under Subsection (c) or
2-46 (d), the retirement system shall grant any credit to which a
2-47 retiring member or retiree who is a subject of the certification is
2-48 entitled. An increase in the computation of an annuity because of
2-49 credit provided by this section after a certification under
2-50 Subsection (d) begins with the first payment that becomes due after
2-51 certification.
2-52 (f) The retirement system shall cancel the retirement of a
2-53 person who used annual leave creditable under this section to
2-54 qualify for service retirement if the annual leave is otherwise
2-55 used by the person before the effective date of retirement.
2-56 SECTION 7. Section 814.104, Government Code, is amended by
2-57 amending Subsection (a) and adding Subsection (c) to read as
2-58 follows:
2-59 (a) Except as provided by Section 814.102 or by rule adopted
2-60 under Section 813.304(d) or 803.202(2), a member who has service
2-61 credit in the retirement system is eligible to retire and receive a
2-62 service retirement annuity if the member:
2-63 (1) [if the member] is at least 60 years old and has
2-64 at least 5 years of service credit in the employee class; or
2-65 (2) has at least five years of service credit in the
2-66 employee class and [if] the sum of the member's age and amount of
2-67 service credit in the employee class, including months of age and
2-68 credit, equals or exceeds the number 80.
2-69 (c) For the sole purpose of determining eligibility to
3-1 receive a service retirement annuity, the retirement system shall
3-2 consider service performed as a participant in the optional
3-3 retirement program under Chapter 830 as if it were service for
3-4 which credit is established in the retirement system.
3-5 SECTION 8. Subchapter B, Chapter 814, Government Code, is
3-6 amended by adding Section 814.1042 to read as follows:
3-7 Sec. 814.1042. SERVICE FOR CERTAIN GOVERNMENTAL EMPLOYERS.
3-8 (a) For the sole purpose of determining eligibility to receive a
3-9 service retirement annuity under Section 814.104(a)(2), the
3-10 retirement system shall consider not more than 60 months, or
3-11 portions of months, of service performed for a Texas governmental
3-12 employer by a member who has at least five years of service credit,
3-13 excluding military service, in the employee class as if it were
3-14 service for which credit is established in the retirement system.
3-15 (b) A member who seeks the application of this section must
3-16 provide documentation satisfactory to the retirement system of the
3-17 amount of service performed for the governmental employer.
3-18 (c) Service described by this section may not be used in
3-19 determining eligibility for participation in the Texas Employees
3-20 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
3-21 Texas Insurance Code).
3-22 SECTION 9. Subsections (c), (d), and (e), Section 814.107,
3-23 Government Code, are amended to read as follows:
3-24 (c) The standard combined service retirement annuity that is
3-25 payable under this section is based on retirement on or after the
3-26 attainment of the normal retirement age, which for purposes of this
3-27 section is the earlier of either the age of 50 or the age at which
3-28 the sum of the member's age and amount of service credit in the
3-29 employee class equals the number 80 [at the age of 50 or older]. A
3-30 law enforcement or custodial officer who retires before attaining
3-31 the normal retirement age [of 50] is entitled to an annuity that is
3-32 actuarially reduced from the annuity available at the normal
3-33 retirement age [of 50] to the law enforcement or custodial officer
3-34 service credit annuity amount available at the sum of the member's
3-35 age and amount of employee class service credit. The annuity
3-36 [earlier retirement age and] is payable from the law enforcement
3-37 and custodial officer supplemental retirement fund.
3-38 (d) A member who retires under this section retires
3-39 simultaneously from the employee class of membership. Benefits for
3-40 service in the employee class of membership become payable from the
3-41 trust fund established by Section 815.310 at the normal retirement
3-42 age [of 50] under the computation provided by Section 814.105.
3-43 Optional retirement annuities provided by Section 814.108 are
3-44 available to a member eligible to receive a service retirement
3-45 annuity under this section, but the same optional plan and designee
3-46 must be selected for the portion of the annuity payable from the
3-47 law enforcement and custodial officer supplemental retirement fund
3-48 and the portion payable from the trust fund established by Section
3-49 815.310.
3-50 (e) The amount payable from the law enforcement and
3-51 custodial officer supplemental retirement fund is reducible by the
3-52 amount paid from the trust fund established by Section 815.310 for
3-53 service as a law enforcement or custodial officer. The total
3-54 combined amount of an annuity under this section may not be less
3-55 than the authorized benefit under Subsection (b) subtracted by any
3-56 amount necessary because of selection of an optional annuity,
3-57 because of retirement before the normal retirement age [of 50], or
3-58 as provided by Subsection (f).
3-59 SECTION 10. Subchapter B, Chapter 814, Government Code, is
3-60 amended by adding Section 814.1082 to read as follows:
3-61 Sec. 814.1082. PARTIAL LUMP SUM OPTION. (a) A member who
3-62 is eligible for an unreduced service retirement annuity may select
3-63 a standard retirement annuity or an optional retirement annuity
3-64 described by Section 814.108 together with a partial lump sum
3-65 distribution.
3-66 (b) The amount of the lump sum distribution under this
3-67 section may not exceed the sum of 36 months of a standard service
3-68 retirement annuity computed without regard to this section.
3-69 (c) The service retirement annuity selected by the member
4-1 shall be actuarially reduced to reflect the lump sum option
4-2 selected by the member and shall be actuarially equivalent to a
4-3 standard or optional service retirement annuity, as applicable,
4-4 without the partial lump sum distribution. The annuity and lump
4-5 sum shall be computed to result in no actuarial loss to the
4-6 retirement system.
4-7 (d) Unless otherwise specified in rules adopted by the board
4-8 of trustees, the lump sum distribution will be made as a single
4-9 payment payable at the time that the first monthly annuity payment
4-10 is paid to the retiree.
4-11 (e) The amount of the lump sum distribution will be deducted
4-12 from any amount otherwise payable under Section 814.505.
4-13 (f) The partial lump sum option under this section may be
4-14 elected only once by a member and may not be elected by a retiree.
4-15 A member retiring under the proportionate retirement program under
4-16 Chapter 803 is not eligible for the partial lump sum option.
4-17 (g) The board of trustees may adopt rules for the
4-18 implementation of this section and may authorize the option to be
4-19 used for a death benefit annuity. This section does not apply to a
4-20 disability retirement annuity.
4-21 SECTION 11. Section 814.202, Government Code, is amended by
4-22 adding Subsection (d) to read as follows:
4-23 (d) For the sole purpose of determining eligibility to
4-24 receive a disability retirement annuity under Subsection (a)(3),
4-25 the retirement system shall consider service performed as a
4-26 participant in the optional retirement program under Chapter 830 as
4-27 if it were service for which credit is established in the
4-28 retirement system.
4-29 SECTION 12. Subsection (b), Section 814.302, Government
4-30 Code, is amended to read as follows:
4-31 (b) If a person dies who, at the time of death, was a
4-32 contributing member of a retirement program administered by the
4-33 board of trustees and was eligible, having met the requirements of
4-34 service credit and attained age, for a service retirement annuity
4-35 based on service in one or more board-administered programs or was
4-36 a contributing member of the employee class, had at least three
4-37 years of service credit in that class, and would have been eligible
4-38 to retire under the proportionate retirement program under Chapter
4-39 803, but was not eligible to select a death benefit plan, the
4-40 person's surviving spouse may select a plan in the same manner that
4-41 the decedent could have made the selection if the decedent had
4-42 retired on the last day of the month in which the person died. If
4-43 there is no surviving spouse, the guardian of the decedent's
4-44 surviving minor children may select a plan. If the decedent is not
4-45 survived by a spouse or minor children, an annuity may not be paid
4-46 under this subsection.
4-47 SECTION 13. Section 815.103, Government Code, is amended by
4-48 adding Subsection (d) to read as follows:
4-49 (d) The board of trustees may accept on behalf of the
4-50 retirement system gifts of money or other property from any public
4-51 or private source.
4-52 SECTION 14. Subsection (e), Section 815.110, Government
4-53 Code, is amended to read as follows:
4-54 (e) The board of trustees [annually] shall select an
4-55 independent auditor to perform an annual [a] financial audit of the
4-56 retirement system. The selection shall be in accordance with the
4-57 requirements of Chapter 2254 for obtaining the services of a
4-58 certified public accountant [made under a competitive bidding
4-59 process in which the state auditor is eligible to bid].
4-60 SECTION 15. Subsection (f), Section 815.202, Government
4-61 Code, is amended to read as follows:
4-62 (f) The board of trustees may specifically delegate any
4-63 right, power, or duty imposed or conferred on the executive
4-64 director by law to another employee of the retirement system. If
4-65 not so specifically delegated, the executive director may delegate
4-66 to another employee of the retirement system any right, power, or
4-67 duty assigned to the executive director.
4-68 SECTION 16. Section 815.208, Government Code, is amended by
4-69 adding Subsection (d) to read as follows:
5-1 (d) The board of trustees may compensate employees of the
5-2 retirement system, whether subject to or exempt from the overtime
5-3 provisions of the Fair Labor Standards Act of 1938 (29 U.S.C.
5-4 Section 201 et seq.), at the rate equal to the employees' regular
5-5 rate of pay for work performed on a legal holiday or for other
5-6 compensatory time accrued, when taking compensatory time off would
5-7 be disruptive to the system's normal business functions.
5-8 SECTION 17. Section 815.322, Government Code, is amended to
5-9 read as follows:
5-10 Sec. 815.322. TRANSFER OF ASSETS TO ADJUST AMOUNT IN
5-11 RETIREMENT ANNUITY RESERVE ACCOUNT. After making the transfers
5-12 required by Section 815.318, the executive director [board of
5-13 trustees] shall make a transfer to make the amount in the
5-14 retirement annuity reserve account equal, as of the last day of
5-15 each fiscal year, to the actuarial present value of the annuities
5-16 for which a transfer of assets has been made as required by Section
5-17 815.319. The transfer shall be:
5-18 (1) a transfer from the retirement annuity reserve
5-19 account to the state accumulation account of the amount by which
5-20 the amount in the retirement annuity reserve account exceeds the
5-21 actuarial present value of the annuities; or
5-22 (2) a transfer from the state accumulation account to
5-23 the retirement annuity reserve account of the amount by which the
5-24 actuarial present value of the annuities exceeds the amount in the
5-25 retirement annuity reserve account.
5-26 SECTION 18. Subsection (a), Section 815.502, Government
5-27 Code, is amended to read as follows:
5-28 (a) If a valid application for payment based on money or
5-29 credit in a member's individual account in the employees saving
5-30 account is not filed with the retirement system before the
5-31 expiration of five years after the last day of the most recent
5-32 month of service for which the member has credit in the retirement
5-33 system, the retirement system may [shall] mail a notice to the
5-34 member at the member's most recent address as shown on system
5-35 records. If no address is available or if the notice is returned
5-36 unclaimed, the retirement system shall cause a notice to be
5-37 published in a newspaper of general circulation in the state.
5-38 SECTION 19. Section 815.511, Government Code, is amended to
5-39 read as follows:
5-40 Sec. 815.511. [APPEAL OF] ADMINISTRATIVE DECISION; APPEAL.
5-41 (a) The board of trustees may modify or delete a proposed finding
5-42 of fact or conclusion of law contained in a proposal for decision
5-43 submitted by an administrative law judge or other hearing examiner,
5-44 or make alternative findings of fact and conclusions of law, in a
5-45 proceeding considered to be a contested case under Chapter 2001.
5-46 The board of trustees shall state in writing the specific reason
5-47 for its determination and may adopt rules for the implementation of
5-48 this subsection.
5-49 (b) A person aggrieved by a decision of any retirement
5-50 system administered by the board of trustees denying or limiting
5-51 membership, service credit, or eligibility for or the amount of
5-52 benefits payable by a system may appeal the decision to the board.
5-53 The appeal is considered to be an appeal of a contested case under
5-54 the administrative procedure law, Chapter 2001. On judicial appeal
5-55 the standard of review is by substantial evidence.
5-56 SECTION 20. Subsection (b), Section 840.103, Government
5-57 Code, is amended to read as follows:
5-58 (b) Not later than December 31 [Before November 2] of each
5-59 even-numbered year, the retirement system shall certify to the
5-60 Legislative Budget Board and to the budget division of the
5-61 governor's office for review:
5-62 (1) an actuarial valuation of the retirement system to
5-63 determine the percentage of annual payroll required from the state
5-64 to finance fully the retirement system as provided by Section
5-65 840.106;
5-66 (2) an estimate of the amount necessary to pay the
5-67 state's contribution under Subdivision (1) for the following
5-68 biennium; and
5-69 (3) as a separate item, an estimate of the amount, in
6-1 addition to anticipated receipts from membership fees, required to
6-2 administer the retirement system for the following biennium.
6-3 SECTION 21. Subdivision (18), Subsection (a), Section 3,
6-4 Texas Employees Uniform Group Insurance Benefits Act (Article
6-5 3.50-2, Vernon's Texas Insurance Code), is amended to read as
6-6 follows:
6-7 (18) "Institution of higher education" means any
6-8 public community/junior college or senior college or university, or
6-9 any other agency of higher education within the meaning and
6-10 jurisdiction of Chapter 61, Education Code, except The University
6-11 of Texas System and The Texas A&M University System. [The term
6-12 does not include Texas Tech University and the University of
6-13 Houston System unless either of these entities elects to
6-14 participate in accordance with Section 3A of this Act.]
6-15 SECTION 22. Section 3A, Texas Employees Uniform Group
6-16 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
6-17 Code), is amended to read as follows:
6-18 Sec. 3A. PARTICIPATION BY CERTAIN ENTITIES [CERTAIN
6-19 INSTITUTIONS MAY ELECT TO PARTICIPATE]. (a) The Texas Municipal
6-20 Retirement System and the Texas County and District Retirement
6-21 System shall [Texas Tech University, the University of Houston
6-22 System, or both may] participate in the Texas Employees Uniform
6-23 Group Insurance [Benefits] Program administered by the Employees
6-24 Retirement System of Texas under this Act. Participation is
6-25 limited to the officers and employees of the systems; eligible
6-26 dependents of the officers and employees; persons who have retired
6-27 from either system, who receive or are eligible to receive an
6-28 annuity from either system or under Chapter 803, Government Code,
6-29 based on at least 10 years of service credit, who have at least
6-30 three years of service with a department, including either system,
6-31 whose employees are authorized to participate in the program
6-32 provided by this Act, and who were officers or employees of either
6-33 system; and eligible dependents of the retired officers and
6-34 employees. An officer or employee of either system is an employee
6-35 for purposes of this Act, and a retired officer or employee of
6-36 either system is an annuitant for purposes of this Act.
6-37 Participation under this subsection does not include the governing
6-38 bodies of either system, the municipalities or subdivisions
6-39 participating in either system, or the trustees, officers, or
6-40 employees, or their dependents, of the participating municipalities
6-41 or subdivisions. A participant described by this subsection may
6-42 not receive a state contribution for premiums [The university or
6-43 system must notify the trustee of its election to participate not
6-44 later than April 1, 1992].
6-45 (b) A person who began employment with, or became an officer
6-46 of, the Texas Turnpike Authority within the three-year period
6-47 preceding August 31, 1997, who was an officer or employee of the
6-48 Texas Turnpike Authority on that date, who became an officer or
6-49 employee of the North Texas Tollway Authority on September 1, 1997,
6-50 and who retires or is eligible to retire with at least 10 years of
6-51 service credit under the proportionate retirement program
6-52 established by Chapter 803, Government Code, or under one of the
6-53 public retirement systems to which Chapter 803 applies may
6-54 participate in the programs and coverages provided by this Act as
6-55 an annuitant and may obtain coverage for the person's dependents as
6-56 any other participating annuitant. The North Texas Tollway
6-57 Authority is responsible for payment of the contributions the state
6-58 would make if the annuitants were state employees.
6-59 SECTION 23. Section 4B, Texas Employees Uniform Group
6-60 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
6-61 Code), is amended by adding Subsection (c-1) to read as follows:
6-62 (c-1) The board of trustees may modify or delete a proposed
6-63 finding of fact or conclusion of law contained in a proposal for
6-64 decision submitted by an administrative law judge or other hearing
6-65 examiner, or make alternative findings of fact and conclusions of
6-66 law, in a proceeding considered to be a contested case under
6-67 Chapter 2001, Government Code. The board of trustees shall state
6-68 in writing the specific reason for the determination and may adopt
6-69 rules for the implementation of this subsection.
7-1 SECTION 24. Section 5, Texas Employees Uniform Group
7-2 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
7-3 Code), is amended by amending Subsections (a), (d), and (f) and
7-4 adding Subsection (e) to read as follows:
7-5 (a) The trustee is authorized, empowered, and directed to
7-6 establish plans of group coverages for active employees and retired
7-7 employees which in the trustee's discretion may include but are not
7-8 necessarily limited to the following: group life coverages,
7-9 accidental death and dismemberment, health benefits plans,
7-10 including but not limited to hospital care and benefits, surgical
7-11 care and treatment, medical care and treatment, dental care,
7-12 obstetrical benefits, prescribed drugs, medicines, and prosthetic
7-13 devices and supplemental benefits, supplies, and services in
7-14 conformity with the provisions of this Act, protection against
7-15 either long or short term loss of salary and any other group
7-16 coverages which in the discretion of the trustee with consultation
7-17 from the advisory committee shall be deemed advisable. All rules
7-18 and regulations shall be promulgated pursuant thereto. The trustee
7-19 shall determine the coverages desired for state employees and other
7-20 eligible participants [will submit this information to the State
7-21 Board of Insurance for any recommendations as to the types and
7-22 sufficiency of such coverages. The State Board of Insurance will
7-23 notify the board of trustees within 30 days as to any such
7-24 recommendations and will furnish the board of trustees with a list
7-25 of all carriers authorized to do business in the State of Texas who
7-26 would be eligible to bid on the coverages that are to be insured by
7-27 a carrier]. The trustee will notify eligible [those] carriers that
7-28 competitive bidding will be conducted and that they are to submit
7-29 their bids to the trustee [State Board of Insurance] by a specified
7-30 date if they wish to bid on the contract. An actuary selected by
7-31 the trustee shall advise the trustee as to the actuarial soundness
7-32 of the bids received. [The State Board of Insurance will, after
7-33 the designated closing date of receiving bids, examine and evaluate
7-34 the bidding contracts and certify their actuarial soundness to the
7-35 trustee within 15 days from the closing date.] The trustee shall
7-36 select the desired carrier or carriers and will notify the bidding
7-37 eligible carriers as to the results of the bidding. The trustee
7-38 shall select the desired carrier or carriers to provide services
7-39 that will [which shall] be in the best interest of the employees
7-40 covered by this Act. The trustee is not required to select the
7-41 lowest bid but shall take into consideration other factors such as
7-42 ability to service contracts, past experience, financial ability,
7-43 and other relevant criteria. Should the trustee select a carrier
7-44 whose bid differs from that advertised, such deviation shall be
7-45 recorded and the reasons for such deviation shall be fully
7-46 justified and explained in the minutes of the next meeting of the
7-47 trustee. The trustee shall submit the coverages provided by the
7-48 group plan for competitive bidding at least every six years.
7-49 (d) No department shall establish, continue, or authorize
7-50 payroll deductions or reductions for any benefits or coverage as
7-51 provided in this Act without the express approval of the trustee[,
7-52 except for benefits from the deferred compensation program
7-53 established pursuant to Chapter 197, Acts of the 63rd Legislature,
7-54 Regular Session, 1973 (Article 6252-3b, Vernon's Texas Civil
7-55 Statutes)].
7-56 (e) Before the first day of each state fiscal biennium, the
7-57 trustee shall estimate for an average 60-day period during the
7-58 biennium the expenditures from the fund anticipated for self-funded
7-59 plans, considering claims and administrative expenses for those
7-60 plans that are projected to be incurred. The trustee shall place
7-61 the estimated amount in a contingency reserve fund to provide for
7-62 adverse fluctuations in claims or administrative expenses. The
7-63 trustee shall include in each request for legislative
7-64 appropriations to the program the amount the trustee determines to
7-65 be necessary to maintain the contingency reserve fund at the level
7-66 required by this subsection. The trustee may invest and reinvest
7-67 any portion of the contingency reserve fund under the standard of
7-68 care provided by Section 815.307, Government Code, considering the
7-69 functional need to provide for adverse fluctuations in claims or
8-1 administrative expenses. The interest on, earnings of, and
8-2 proceeds from the sale of investments of assets in the contingency
8-3 reserve fund shall be credited to the fund.
8-4 (f) The trustee, in its sole discretion and in accordance
8-5 with the requirements of this section, shall determine those plans
8-6 of coverages for which the trustee does not intend to purchase
8-7 insurance and which it intends to provide directly from the
8-8 Employees Life, Accident, and Health Insurance and Benefits Fund.
8-9 Any plan of coverages for which the trustee does not purchase
8-10 insurance but provides under this Act on a self-funded basis is
8-11 exempt from any other insurance law unless the law expressly
8-12 applies to this plan or this Act. A qualified actuary selected by
8-13 the trustee shall advise the trustee as to an actuarially sound
8-14 level of contributions required to provide coverages directly from
8-15 the fund. [The trustee shall make an estimate of the unrestricted
8-16 balance of the fund. Unless such estimated unrestricted balance is
8-17 equal to at least 10 percent of the total benefits expected to be
8-18 provided directly from the fund as a result of claims incurred
8-19 during the fiscal year, the trustee shall include in the
8-20 contributions required the amount necessary to establish an
8-21 unrestricted balance in the fund of not less than 10 percent. The
8-22 unrestricted balance shall be placed in a contingency reserve fund
8-23 to provide for adverse fluctuations in future charges, claims,
8-24 costs, or expenses of the program.]
8-25 SECTION 25. Section 8, Texas Employees Uniform Group
8-26 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
8-27 Code), is amended to read as follows:
8-28 Sec. 8. REINSURANCE. The trustee, in its sole discretion
8-29 and under conditions it approves, may reinsure any coverage that it
8-30 has determined will be provided directly from the fund in
8-31 accordance with Section 5(f) of this Act. [(a) The trustee shall
8-32 arrange with any carrier or carriers issuing any policy or policies
8-33 under this Act for the reinsurance, under conditions approved by
8-34 the trustee, of portions of the total amount of insurance under
8-35 such policy or policies, with other qualified carriers which elect
8-36 to participate in the reinsurance.]
8-37 [(b) The trustee shall determine for and in advance of a
8-38 policy year which qualified carriers are eligible to participate as
8-39 reinsurers and the amount of insurance under a policy or policies
8-40 which is to be allocated to the issuing company and reinsurers.
8-41 The trustee shall make this determination when a participating
8-42 company withdraws.]
8-43 SECTION 26. Section 10, Texas Employees Uniform Group
8-44 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
8-45 Code), is amended by adding Subsection (c) to read as follows:
8-46 (c) The records of a participant in the Texas Employees
8-47 Uniform Group Insurance Program in the custody of the trustee, or
8-48 of an administrator or carrier acting on behalf of the trustee, are
8-49 confidential and not subject to disclosure and are exempt from the
8-50 public access provisions of Chapter 552, Government Code, except as
8-51 provided by this subsection. Records may be released to a
8-52 participant or to an authorized attorney, family member, or
8-53 representative acting on behalf of the participant. The trustee
8-54 may release the records to an administrator, carrier, or agent or
8-55 attorney acting on behalf of the trustee, to another governmental
8-56 entity, to a medical provider of the participant for the purpose of
8-57 carrying out the purposes of this Act, or to a party in response to
8-58 a subpoena issued under applicable law. The records of a
8-59 participant remain confidential after release to a person as
8-60 authorized by this subsection. The records of a participant may
8-61 become part of the public record of an administrative or judicial
8-62 proceeding related to a contested case under this Act, unless the
8-63 records are closed to public access by a protective order issued
8-64 under applicable law.
8-65 SECTION 27. Subdivision (3), Subsection (e), Section 11,
8-66 Texas Employees Uniform Group Insurance Benefits Act (Article
8-67 3.50-2, Vernon's Texas Insurance Code), is amended to read as
8-68 follows:
8-69 (3) An annuitant [A retiree] participating in optional
9-1 term life insurance coverage is not eligible for premium-waived
9-2 extended insurance benefits [or accelerated life insurance
9-3 benefits] if the total disability [or terminal condition,
9-4 respectively,] begins after the date of retirement. Accidental
9-5 death and dismemberment insurance coverage ceases on the date of
9-6 retirement, regardless of age. An annuitant participating in
9-7 optional term life insurance coverage is eligible for accelerated
9-8 life insurance benefits as provided by rules adopted under the
9-9 authority of Subsection (d) of this section, as added by Chapter
9-10 1048, Acts of the 75th Legislature, Regular Session, 1997.
9-11 SECTION 28. Section 11A, Texas Employees Uniform Group
9-12 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
9-13 Code), is amended to read as follows:
9-14 Sec. 11A. PAYMENT OF ACCELERATED BENEFITS; IRREVOCABLE
9-15 DESIGNATION OF BENEFICIARY. [(a)] The trustee shall adopt rules
9-16 requiring a group life insurance program provided to employees,
9-17 including annuitants or dependents, to include a provision allowing
9-18 the employee, annuitant, or dependent to make, in conjunction with
9-19 receipt of a viatical settlement, an irrevocable designation of
9-20 beneficiary for part or all of the group life coverage benefits. A
9-21 viatical settlement is not valid for any coverage under the Texas
9-22 Employees Uniform Group Insurance Program unless the employee,
9-23 annuitant, or dependent has a terminal illness or terminal injury,
9-24 as defined by rules adopted by the trustee, at the time application
9-25 for benefits is made.[:]
9-26 [(1) elect to receive an accelerated benefit under
9-27 Article 3.50-6, Insurance Code, subject to the provisions of that
9-28 article; or]
9-29 [(2) make, in conjunction with receipt of a viatical
9-30 settlement, an irrevocable designation of a beneficiary for all or
9-31 a part of the group life coverage benefits.]
9-32 [(b)] In this section, "viatical settlement" has the meaning
9-33 assigned by Article 3.50-6A, Insurance Code.
9-34 SECTION 29. Section 13, Texas Employees Uniform Group
9-35 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
9-36 Code), is amended by adding Subsection (e) to read as follows:
9-37 (e) Except as provided by Section 13A of this Act, on
9-38 application to the trustee and arrangement for payment of
9-39 contributions, a former member of a board or commission described
9-40 by Section 3(a)(5)(A)(vi) of this Act or a former member of the
9-41 governing body of an institution of higher education remains
9-42 eligible for participation in a group health coverage plan offered
9-43 under this Act as long as no lapse in coverage occurs after the end
9-44 of the former member's term. A participant described by this
9-45 subsection may not receive a state contribution for premiums. The
9-46 participant's contribution for coverage under a group health
9-47 coverage plan may not be greater than the contribution for
9-48 continuation coverage under the Consolidated Omnibus Budget
9-49 Reconciliation Act of 1985 (Pub. L. No. 99-272).
9-50 SECTION 30. Subsection (d), Section 13B, Texas Employees
9-51 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
9-52 Texas Insurance Code), is amended to read as follows:
9-53 (d) Each employee shall be enrolled in the premium
9-54 conversion benefit portion of the cafeteria plan [unless the
9-55 employee notifies the trustee in writing that the employee elects
9-56 not to be enrolled]. Notwithstanding any provision of Section 16B
9-57 of this Act to the contrary, the trustee may not establish a fee or
9-58 charge for administering the premium conversion benefit portion of
9-59 the cafeteria plan.
9-60 SECTION 31. The Texas Employees Uniform Group Insurance
9-61 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is
9-62 amended by adding Section 16A to read as follows:
9-63 Sec. 16A. MANAGEMENT OF ASSETS. The trustee may commingle
9-64 for investment purposes the assets of any fund created under this
9-65 Act with any other fund created under this Act or any other trust
9-66 fund administered by the trustee, as long as proportionate
9-67 ownership records are maintained and credited.
9-68 SECTION 32. The Texas Employees Uniform Group Insurance
9-69 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) is
10-1 amended by adding Section 16C to read as follows:
10-2 Sec. 16C. EMPLOYEES' HEALTH CARE STABILIZATION TRUST FUND.
10-3 (a) The employees' health care stabilization trust fund is a
10-4 special fund in the treasury outside the general revenue fund.
10-5 (b) The fund is composed of:
10-6 (1) money transferred to the fund at the direction of
10-7 the legislature;
10-8 (2) gifts and grants contributed to the fund; and
10-9 (3) the returns received as interest on, and from
10-10 investment of, money in the fund.
10-11 (c) The trustee shall administer the fund. The trustee may
10-12 manage and invest the money in the fund under the standard of care
10-13 provided by Section 815.307, Government Code. In administering the
10-14 fund, the trustee shall make investments in a manner that preserves
10-15 the purchasing power of the fund's assets.
10-16 (d) Money in the fund may not be spent for any purpose,
10-17 except that the interest and investment returns of the fund may be
10-18 appropriated only for the purpose of stabilizing the cost of state
10-19 and participant contributions for health care coverage under this
10-20 Act by minimizing to the greatest extent possible increases in
10-21 those contributions.
10-22 (e) The fund is exempt from the application of Section
10-23 403.095, Government Code.
10-24 SECTION 33. Subsection (a), Section 18, Texas Employees
10-25 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
10-26 Texas Insurance Code), is amended to read as follows:
10-27 (a) The group benefits advisory committee is composed of 26
10-28 voting members as provided by this section. The office of the
10-29 attorney general, the office of the comptroller, the Railroad
10-30 Commission of Texas, the General Land Office, and the Department of
10-31 Agriculture are entitled to be represented by one member each on
10-32 the committee, who may be appointed by the governing body of the
10-33 state agency or elected by and from the employees of the agency, as
10-34 determined by rule by the governing body of the agency. One
10-35 employee shall be elected from each of the remaining eight largest
10-36 state agencies that are governed by appointed officers by and from
10-37 the employees of those agencies. One nonvoting member shall be the
10-38 executive director of the Employees Retirement System of Texas. One
10-39 member shall be an expert in employee benefit issues from the
10-40 private sector, appointed by the governor. One member shall be an
10-41 expert in employee benefits issues from the private sector,
10-42 appointed by the lieutenant governor. One member shall be a
10-43 retired state employee appointed by the trustee. One member shall
10-44 be a state employee of a state agency eligible for membership in
10-45 the Texas Small State Agency Task Force [other than one of the
10-46 eight largest state agencies], appointed by the trustee. Not more
10-47 than one employee from a particular state agency may serve on the
10-48 committee. Each of the seven largest institutions of higher
10-49 education, as determined by the number of employees on the payroll
10-50 of an institution, shall elect one member of the committee from
10-51 among persons who have each been nominated by a petition signed by
10-52 at least 300 employees. Two members shall be employees of
10-53 institutions of higher education, other than the seven largest
10-54 institutions of higher education, who are appointed by the Texas
10-55 Higher Education Coordinating Board, but not more than one employee
10-56 shall be from any one institution. The members shall elect a
10-57 presiding officer from their membership to serve a one-year term.
10-58 SECTION 34. Subsection (b), Section 19, Texas Employees
10-59 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
10-60 Texas Insurance Code), is amended to read as follows:
10-61 (b) A surviving spouse of an employee or a retiree who is
10-62 entitled to monthly benefits paid by a retirement system named in
10-63 this Act may, following the death of the employee or retiree, elect
10-64 to retain the spouse's authorized coverages and also retain
10-65 authorized coverages for any dependent of the spouse, at the group
10-66 rate for employees, provided such coverage was previously secured
10-67 by the employee or retiree for the spouse or dependent, and the
10-68 spouse directs the applicable retirement system to deduct required
10-69 contributions from the monthly benefits paid the surviving spouse
11-1 by the retirement system. A surviving dependent of a retiree who
11-2 was receiving monthly benefits paid by a retirement system named in
11-3 this Act may, after the death of the retiree and if the retiree
11-4 leaves no surviving spouse, elect to retain any coverage previously
11-5 secured by the retiree, at the group rate for employees, until the
11-6 dependent becomes ineligible for coverage for a reason other than
11-7 the death of the member of the group. A dependent who makes an
11-8 election under this subsection and who is entitled to monthly
11-9 benefits from a retirement system named in this Act based on the
11-10 service of the deceased retiree must direct the applicable
11-11 retirement system to deduct required contributions for the coverage
11-12 from the monthly benefits paid the surviving dependent by the
11-13 retirement system. If funds are specifically appropriated for the
11-14 purpose, the state shall pay the same portion of the cost of the
11-15 required contributions for a deceased retiree's surviving spouse or
11-16 other surviving dependent who elects to retain coverage under this
11-17 subsection as it pays for similar dependent coverage for an
11-18 employee or retiree participating in the program.
11-19 SECTION 35. Subsection (a), Section 403.026, Government
11-20 Code, as added by Chapter 1153, Acts of the 75th Legislature,
11-21 Regular Session, 1997, is amended to read as follows:
11-22 (a) The comptroller shall conduct a study each biennium to
11-23 determine the number and type of fraudulent claims for medical or
11-24 health care benefits submitted:
11-25 (1) under the state Medicaid program; or
11-26 (2) [under group health insurance programs
11-27 administered through the Employees Retirement System of Texas for
11-28 active and retired state employees; or]
11-29 [(3)] by or on behalf of a state employee and
11-30 administered by the attorney general under Chapter 501, Labor Code.
11-31 SECTION 36. Section 609.007, Government Code, is amended by
11-32 adding Subsection (d) to read as follows:
11-33 (d) A contract created under this section need not be in
11-34 writing and may be communicated to the plan administrator
11-35 electronically or by any other means approved by the plan's
11-36 trustees.
11-37 SECTION 37. Section 609.505, Government Code, is amended by
11-38 amending Subsection (a) and adding Subsections (c) and (d) to read
11-39 as follows:
11-40 (a) The board of trustees, in accordance with rules adopted
11-41 under this subchapter, may contract with a [qualified] vendor
11-42 qualified to participate in a deferred compensation plan.
11-43 (c) A vendor or investment product having an ownership or
11-44 other financial interest in the contractor selected by the board of
11-45 trustees to administer a deferred compensation plan is not
11-46 qualified to participate in that plan.
11-47 (d) The board of trustees shall select vendors or investment
11-48 products based on the quality of investment performance, proven
11-49 ability to manage institutional assets, minimum net worth
11-50 requirements, fee structure, compliance with applicable federal and
11-51 state laws, and other criteria established by the board. The board
11-52 of trustees shall determine the minimum and maximum number of
11-53 vendors and investment products that may be offered by a plan at
11-54 any particular time.
11-55 SECTION 38. Section 615.001, Government Code, is amended to
11-56 read as follows:
11-57 Sec. 615.001. DEFINITION. In this chapter, "minor child"
11-58 means a child who, on the date of the death of an individual listed
11-59 under Section 615.003, is younger than 18 [21] years of age.
11-60 SECTION 39. (a) Monthly payments of a retirement or death
11-61 benefit annuity by the Employees Retirement System of Texas under
11-62 Subtitle B, Title 8, Government Code, are increased beginning with
11-63 the first payment of the annuities that becomes due on or after the
11-64 effective date of this section.
11-65 (b) The increase does not apply to annuities payable under
11-66 Section 814.103, Government Code.
11-67 (c) The amount of the monthly increase is computed by
11-68 multiplying the previous monthly benefit by a percentage determined
11-69 in accordance with the following table:
12-1 LATEST RETIREMENT DATE OR,
12-2 IF APPLICABLE, DATE OF DEATH INCREASE
12-3 Before September 1, 1962 45%
12-4 On or after September 1, 1962, but before September 1, 1965 40%
12-5 On or after September 1, 1965, but before September 1, 1972 38%
12-6 On or after September 1, 1972, but before September 1, 1978 35%
12-7 On or after September 1, 1978, but before September 1, 1979 25%
12-8 On or after September 1, 1979, but before September 1, 1984 20%
12-9 On or after September 1, 1984, but before September 1, 1986 15%
12-10 On or after September 1, 1986, but before September 1, 1987 11%
12-11 On or after September 1, 1987, but before September 1, 1989 10%
12-12 On or after September 1, 1989, but before September 1, 1990 9%
12-13 On or after September 1, 1990, but before September 1, 1991 8%
12-14 On or after September 1, 1991, but before September 1, 1992 7%
12-15 On or after September 1, 1992, but before September 1, 1993 6%
12-16 On or after September 1, 1993, but before September 1, 1995 5%
12-17 On or after September 1, 1995, but before September 1, 1996 4%
12-18 On or after September 1, 1996, but before September 1, 1997 3%
12-19 On or after September 1, 1997, but before September 1, 1998 2%
12-20 On or after September 1, 1998, but before September 1, 1999 1%
12-21 SECTION 40. Subsections (b), (c), and (g), Section 5, Texas
12-22 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
12-23 Vernon's Texas Insurance Code), are repealed.
12-24 SECTION 41. (a) Except as provided by Subsection (b) of
12-25 this section, Subsection (b), Section 814.302, Government Code, as
12-26 amended by this Act, applies only to deaths of contributing members
12-27 of the Employees Retirement System of Texas that occur on or after
12-28 the effective date of this Act.
12-29 (b) The surviving spouse of a contributing member of the
12-30 Employees Retirement System of Texas who died before the effective
12-31 date of this Act and whose account has not been refunded may apply
12-32 for and receive a death benefit annuity under Subsection (b),
12-33 Section 814.302, Government Code, as amended by this Act. The
12-34 effective date of an annuity under this subsection is the last day
12-35 of the month in which the member died. The amount of an annuity
12-36 payable under this subsection will be determined under the plan
12-37 terms in effect in the month in which the member died. The
12-38 retirement system shall make a lump sum payment of all unpaid
12-39 annuity payments under this subsection at the time the first
12-40 payment of the annuity becomes due on or after the effective date
12-41 of this Act. This subsection expires December 31, 1999.
12-42 SECTION 42. Notwithstanding Section 3A, Texas Employees
12-43 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
12-44 Texas Insurance Code), as amended by this Act, a person who retires
12-45 from the Texas County and District Retirement System or the Texas
12-46 Municipal Retirement System on or after the effective date of this
12-47 Act but before September 1, 2002, is not required to meet the
12-48 requirement of three years of service for a department whose
12-49 employees are authorized to participate in the program provided by
12-50 that Act to continue participation authorized by that section.
12-51 SECTION 43. Section 814.1082, Government Code, as added by
12-52 this Act, applies only to retirements that occur on or after
12-53 January 1, 2000.
12-54 SECTION 44. This Act takes effect September 1, 1999, except
12-55 Sections 27, 28, and 39, which take effect January 1, 2000.
12-56 SECTION 45. The importance of this legislation and the
12-57 crowded condition of the calendars in both houses create an
12-58 emergency and an imperative public necessity that the
12-59 constitutional rule requiring bills to be read on three several
12-60 days in each house be suspended, and this rule is hereby suspended.
12-61 * * * * *