Amend CSHB 1569 by adding the following:
        SECTION 1.  APPLICABILITY.  This Act applies to a municipal
retirement system that has 500 or more active and retired
firefighters and police officers other than:
            (1)  a system organized under the Texas Local Fire
Fighters Retirement Act (Article 6243e, Vernon's Texas Civil
Statutes);
            (2)  the Texas Municipal Retirement System; or
            (3)  any retirement system established under any other
law exclusively for firefighters, police officers, or firefighters
and police officers.
      SECTION 2.  DEFINITIONS.  In this Act:
            (1)  "Contribution" means the money put into a
retirement fund by the participating members of the fund.
            (2)  "Firefighter" means an employee of the fire
department of a municipality who is required to satisfy Section
419.032, Government Code, as a condition of employment.
            (3)  "Member" means a firefighter, police officer, or
any person who is retired from a fire or police department and who
is receiving benefits as a retiree of a retirement system.
            (4)  "Participating member" means a firefighter or
police officer who is currently making contributions to a
retirement fund.
            (5)  "Participation rate" means the money put into a
retirement system by a municipality for services rendered to the
municipality by the participating members of the system.
            (6)  "Police officer" means an employee of the police
department of a municipality who is required to be licensed by the
Commission on Law Enforcement Officer Standards and Education under
Chapter 1701, Occupations Code, as a condition of employment.
            (7)  "Qualified actuary" means an actuary who is either
a fellow of the Society of Actuaries or a member of the American
Academy of Actuaries.
            (8)  "Retiree" means any person who is retired from the
fire department or police department of a municipality or who is a
surviving spouse or surviving dependent of a retired fire or police
department employee.
      SECTION 3.  ELECTION PROCEDURES.  (a)  In any municipal
retirement system in which firefighters or police officers are
combined with nonemergency response employees, other than a system
excluded by Section 1 of this Act, the firefighters or police
officers or the firefighters and police officers may petition the
retirement board of the municipal retirement system to call an
election of the participating members of the petitioning group to
determine, by majority vote of the firefighters, police officers,
or police officers and firefighters, whether to separate from the
municipal retirement system and to create a retirement system under
this Act.
      (b)  Any petition filed under this Act must be signed by at
least 10 percent of the participating members of the fire
department, the police department, or both departments if both are
petitioning.  The petition must be accompanied by an actuarial
analysis showing the impact of the proposed separation on the
existing system and the proposed system.  A qualified actuary must
perform the actuarial analysis.  The petitioning group is
responsible for the cost of the actuarial analysis.
      (c)  A municipal retirement board receiving a petition that
meets the requirements of Subsection (b) of this section shall, not
later than the 60th day after the date that the municipal
retirement board receives the petition, call an election to be
conducted by a certified public accounting firm.
      (d)  If a majority of the participating members of a group
vote to separate from the existing system, an election shall be
held not later than the 60th day after the date of the separation
election to elect members of the board of trustees for the system
created under this Act.  The election held under this subsection
shall be conducted by the same certified public accounting firm
that conducted the separation election.
      SECTION 4.  COMPOSITION OF BOARD.  (a)  If a system created
under this Act includes both firefighters and police officers, the
initial retirement board must consist of:
            (1)  one firefighter and one police officer elected for
three-year terms;
            (2)  one firefighter and one police officer elected for
two-year terms; and
            (3)  one retired firefighter and one retired police
officer elected by the retired members of each of the respective
groups for one-year terms.
      (b)  If the system created under this Act includes only
firefighters or only police officers, the initial retirement board
shall consist of:
            (1)  two participating members elected for two-year
terms;
            (2)  two participating members elected for one-year
terms; and
            (3)  one retired member elected by the retired members
of the group for a one-year term.
      (c)  After the initial terms of office expire under
Subsection (a) or (b) of this section, each term shall be for two
years, and any vacancy shall be filled for the unexpired term.
      (d)  The mayor or the mayor's designee from the city council
of the municipality shall serve on a retirement board described by
Subsection (a) or (b) of this section as an ex officio member.
      SECTION 5.  PRESERVATION OF SYSTEM.  (a)  Any retirement
system separating from a municipal retirement system and creating a
separate system under this Act is governed by the rules and
regulations, procedures, benefits, and document of the municipal
retirement system, to the extent that those standards are
applicable and not in conflict with this Act, until the new
retirement board adopts, through the process contained in this Act,
new rules and regulations, procedures, benefits, and a document
that are ratified by a majority vote of the participating members
of the system and the governing body of the municipality, if
applicable.
      (b)  All authority granted to the retirement board of the
municipal retirement system shall be granted to the new board until
a new document is adopted as provided by this Act.
      SECTION 6.  EXPENDITURE AUTHORITY OF RETIREMENT BOARD DURING
SEPARATION.  (a)  A retirement board of trustees created under this
Act has the authority to make expenditures from the existing fund
to facilitate the separation and to prepare for the creation of the
new system or for any cause that is an appropriate expenditure for
a retirement board.
      (b)  All expenditures made under this section shall be
debited against that portion of the fund that is transferred to the
new system created under this Act.
      (c)  The new board may hire an executive director and staff,
who may be participating members of the fund, for the
administration of the fund, who:
            (1)  are employees of the new board; and
            (2)  serve at the will of the new board.
      (d)  The new board may rent, lease, or purchase office space
and equipment.
      SECTION 7.  BASIC MODIFICATIONS.  Any modification of the
system that does not deal with benefits, eligibility, or
contributions may be made only after:
            (1)  the retirement board receives an actuarial report
stating that the proposed modification will not have a significant
impact on benefits, eligibility, contributions, or the soundness of
the system; and
            (2)  a majority vote of the retirement board.
      SECTION 8.  MODIFICATION OF BENEFITS AND ELIGIBILITY.  (a)
The board of trustees of a system created under this Act may:
            (1)  change the benefits or eligibility requirements
for benefits payable from the retirement system;
            (2)  provide for reinstatement by a member of service
credit previously forfeited; and
            (3)  adopt or change other requirements for the payment
of benefits, except as otherwise prohibited by this Act.
      (b)  Before a board of trustees chooses to adopt or change a
benefit or requirement for the payment of benefits under this
section, the proposed addition or change must be approved by:
            (1)  a qualified actuary selected by the board; and
            (2)  a majority vote of the participating members of
the retirement system voting on the addition or change by secret
ballot at an election held for that purpose at which at least 50
percent of all participating members of the retirement system vote.
      (c)  Except as provided by Subsection (d) of this section, if
a board chooses to adopt an addition or change after it has been
approved as provided by this section, the addition or change
applies to all persons who are participating members of the
retirement system on the effective date of the addition or change
and all persons who become participating members during the time
the addition or change remains in effect.  The addition or change
also may apply to:
            (1)  persons receiving monthly benefits; or
            (2)  former members of the fire or police department
who meet an applicable length-of-service requirement for service
retirement.
      (d)  An addition or change adopted under this section may
not, without the member's written consent, deprive a member of the
retirement system of a right to receive a vested benefit.
      (e)  The effective date of a change or addition adopted under
this section is a date specified by the board of trustees that is
not earlier than the date of adoption by the board.  A change or
addition may not be retroactive unless retroactive application is
required to maintain a plan's tax qualification status.
      SECTION 9.  MODIFICATION OF PARTICIPATION RATE.  The rate of
participation by the municipality in the retirement system shall be
fixed as of January 1, 2001, and any modification that requires a
change in the rate of participation by the municipality must meet
the requirements of Section 8 of this Act and be approved by the
governing body of the municipality.  This Act does not require the
approval of the municipality except for an increase in the
participation rate.
      SECTION 10.  FUND TRANSFER.  (a)  A qualified actuary,
jointly approved by the predecessor system's retirement board of
trustees and the board of trustees of a retirement system created
under this Act, shall determine the amount of money to be
transferred to a retirement system created under this Act.
      (b)  When the retirement board created under this Act is
ready to have the money transferred into the system created by this
Act, the board shall notify the predecessor board. If the two
retirement boards are unable to agree on an actuary before the 45th
day after the date of notification, the predecessor board's actuary
as of the first day of the year in which the petition for
separation was submitted shall be appointed to serve. If the
predecessor board's actuary is appointed, after agreement could not
be reached in the required time, the retirement board created under
this Act may appoint an additional qualified actuary.
      (c)  The actuary or actuaries shall divide the fund so that
both retirement systems are equally funded based on an actuarial
basis.
      (d)  The two boards shall jointly set a schedule for the
division. If a schedule cannot be agreed on, the division shall
occur not later than the 180th day after the date the actuary or
actuaries have been selected in accordance with this Act.
      SECTION 11.  SEPARATION COSTS. (a)  All reasonable and
prudent costs of the separation from an existing fund and of the
creation of a retirement system under this Act that are approved in
advance by both retirement boards shall be debited against the new
system created under this Act.
      (b)  No expense of the separation is the responsibility of
the municipality in which the new fund is created.
      SECTION 12.  TRUST FUND. Any fund created under this Act is a
trust fund. It shall be administered by a board of trustees known
as "The Board Of Trustees of the Firefighter's or Police Officer's
Municipal Retirement System."
      SECTION 13.  RECOVERY OF WRONGLY OBTAINED FUNDS. The board of
trustees may bring a civil action against any offending party or
may initiate a claim with the board's bond surety to recover any
money paid out of or obtained from the fund through fraud,
misrepresentation, defalcation, theft, embezzlement, or
misapplication. The board of trustees may institute, conduct, and
maintain the action in the name of the board of trustees for the
use and benefit of the fund.
      SECTION 14.  HEARING AUTHORITY. A retirement board created
under this Act may, through its presiding officer, subpoena
witnesses and documents, administer oaths, examine witnesses, and
require testimony in any matter affecting the retirement system or
benefits, eligibility, participation, procedures, or contributions.
      SECTION 15.  EFFECTIVE DATE. This Act takes effect
immediately if it receives a vote of two-thirds of all the members
elected to each house, as provided by Section 39, Article III,
Texas Constitution.  If this Act does not receive the vote
necessary for immediate effect, this Act takes effect September 1,
2001.