1-1     By:  Shapiro                                          S.B. No. 1226
 1-2           (In the Senate - Filed March 11, 1999; March 11, 1999, read
 1-3     first time and referred to Committee on State Affairs;
 1-4     April 20, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 9, Nays 0; April 20, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1226                 By:  Shapiro
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the deferred retirement option plan in the Teacher
1-11     Retirement System of Texas.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Section 824.802, Government Code, is amended to
1-14     read as follows:
1-15           Sec. 824.802.  Participation in Plan. (a)  A contributing
1-16     member who is eligible under Section 824.202 to retire and receive
1-17     a standard service retirement annuity that is not reduced for
1-18     retirement at an early age and who has at least 25 years of service
1-19     credit in the retirement system may, if the member remains an
1-20     employee, elect to participate in the deferred retirement option
1-21     plan.  Notwithstanding Chapter 805, a member may transfer to the
1-22     retirement system service credit established in the Employees
1-23     Retirement System of Texas.  Service credit transferred under this
1-24     subsection may be used to establish eligibility for participation
1-25     in and the amount of benefits under the plan.
1-26           (b)  An election to participate in the plan must be on a form
1-27     prescribed by and filed with the retirement system.  An election
1-28     [may be made only once and] must state the period that the member
1-29     wishes to participate in the plan.  The period must be a minimum of
1-30     12 consecutive months and be in 12-month increments.  The maximum
1-31     period a member may participate in the plan is 60 consecutive
1-32     months.  [An election under this section is irrevocable after
1-33     filing.]  The filing of an election under this section is not
1-34     considered for any purpose an application for retirement, and a
1-35     person is not considered a retiree for any purpose because of the
1-36     filing.
1-37           (c)  A contributing member may revoke an election to
1-38     participate in the plan on a form prescribed by and filed with the
1-39     retirement system.  A revocation may be made only once.  On
1-40     revocation, the retirement system shall transfer all contributions
1-41     and interest in the deferred retirement option account as a result
1-42     of the member's election to the appropriate system accounts.
1-43           (d)  The effective date of a member's participation or
1-44     revocation of participation in the plan is the first day of the
1-45     month after the month in which an election or revocation is
1-46     received and approved by the retirement system.  The retirement
1-47     system shall approve the election or revocation filed by a member
1-48     who is eligible to make the election or revocation.
1-49           SECTION 2.  Subsection (b), Section 824.803, Government Code,
1-50     is amended to read as follows:
1-51           (b)  For purposes of the plan, the amount of service credit
1-52     used to compute [computation of] the service retirement annuity of
1-53     a member participating in the plan is determined as of the
1-54     effective date of participation in the plan.  The amount of the
1-55     annuity is computed on the effective date of termination of
1-56     participation according to the formula used to compute annuities
1-57     that is in effect at that time.  A participating member is not
1-58     eligible to receive a postretirement increase made applicable to
1-59     annuitants during the member's participation in the plan.
1-60           SECTION 3.  Subsections (a) and (c), Section 824.804,
1-61     Government Code, are amended to read as follows:
1-62           (a)  On the effective date of a member's participation in the
1-63     plan, the retirement system shall make the transfers required by
1-64     Section 825.309 to the retired reserve account as if the member had
 2-1     retired on that date.  The retirement system shall transfer
 2-2     monthly, during the period of the member's participation in the
 2-3     plan, from the retired reserve account to an account for the member
 2-4     in the deferred retirement option account an amount equal to 61
 2-5     [79] percent of the amount the member would receive [have received]
 2-6     that month under a standard service retirement annuity if the
 2-7     member had retired the preceding month [on the effective date of
 2-8     plan participation].
 2-9           (c)  If a member dies during participation in the plan or
2-10     after participation but before retirement, the decedent's
2-11     designated beneficiary is entitled to the accumulated amount in the
2-12     decedent's account in the deferred retirement option account,
2-13     including creditable interest.  The beneficiary is also entitled to
2-14     a death benefit based on age, compensation, and years of service
2-15     [on the effective date of participation in the plan and on age] on
2-16     the date of death.
2-17           SECTION 4.  This Act takes effect September 1, 1999.
2-18           SECTION 5.  The importance of this legislation and the
2-19     crowded condition of the calendars in both houses create an
2-20     emergency and an imperative public necessity that the
2-21     constitutional rule requiring bills to be read on three several
2-22     days in each house be suspended, and this rule is hereby suspended.
2-23                                  * * * * *