77R14822 GJH-D
By Tillery, Bonnen, Turner of Coleman, H.B. No. 783
Christian, McClendon, et al.
Substitute the following for H.B. No. 783:
By Woolley C.S.H.B. No. 783
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to systems and programs administered by the Teacher
1-3 Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 803.402, Government Code, is amended to
1-6 read as follows:
1-7 Sec. 803.402. RECORDS. Records [Except as provided by
1-8 Section 825.507, records] of members and beneficiaries of a
1-9 retirement system to which this chapter applies that are in the
1-10 custody of any retirement system to which this chapter applies are
1-11 confidential and not subject to disclosure and are exempt from the
1-12 public access provisions of Chapter 552. The records or
1-13 information in the records may be transferred between retirement
1-14 systems to which this chapter applies to the extent necessary to
1-15 administer the proportionate retirement program provided by this
1-16 chapter.
1-17 SECTION 2. Section 822.006, Government Code, is amended to
1-18 read as follows:
1-19 Sec. 822.006. RESUMPTION OF MEMBERSHIP AFTER TERMINATION. A
1-20 person whose membership in the retirement system has been
1-21 terminated and who resumes membership must enter the retirement
1-22 system on the same terms as a person entering service for the first
1-23 time and is not entitled to credit for previous or other terminated
1-24 service unless it is reinstated under Section 823.501 [or 823.502].
2-1 SECTION 3. Section 823.004(a), Government Code, is amended to
2-2 read as follows:
2-3 (a) All credit for military service, out-of-state service,
2-4 developmental leave, service previously waived, [work experience in
2-5 a career or technological field,] and service transferred to the
2-6 retirement system under Chapter 805 shall be computed on a
2-7 September 1 through August 31 school year. Payments for service
2-8 described by this section must be completed not later than the
2-9 later of the member's retirement date or the last day of the month
2-10 in which the member submits a retirement application.
2-11 SECTION 4. Subchapter E, Chapter 823, Government Code, is
2-12 amended by adding Section 823.405 to read as follows:
2-13 Sec. 823.405. CREDIT PURCHASE OPTION. (a) A member may
2-14 establish not more than three years of equivalent membership
2-15 service credit under this section if the member has at least 12
2-16 years of actual membership service.
2-17 (b) A member may establish service credit under this section
2-18 by depositing with the retirement system, for each year of service
2-19 credit, the actuarial present value, at the time of deposit, of the
2-20 additional standard retirement annuity benefits that would be
2-21 attributable to the purchase of the service credit under this
2-22 section, based on rates and tables recommended by the retirement
2-23 system's actuary and adopted by the board of trustees.
2-24 (c) After a member makes the deposits required by this
2-25 section, the retirement system shall grant the member one year of
2-26 equivalent membership service credit for each year of credit
2-27 approved.
3-1 (d) The retirement system shall deposit the amount of the
3-2 actuarial present value of the service credit purchased in the
3-3 member's individual account in the employees saving account.
3-4 (e) The board of trustees may adopt rules to administer this
3-5 section, including rules that impose restrictions on the
3-6 application of this section.
3-7 SECTION 5. Sections 824.203(a) and (e), Government Code, are
3-8 amended to read as follows:
3-9 (a) Except as provided by Subsections (c), (d), and (e), the
3-10 standard service retirement annuity is an amount computed on the
3-11 basis of the member's average annual compensation for the three
3-12 years of service, whether or not consecutive, in which the member
3-13 received the highest annual compensation, times 2.3 [2.2] percent
3-14 for each year of service credit in the retirement system.
3-15 (e) The annual standard service retirement annuity for a
3-16 person who immediately before retirement holds a position as a
3-17 classroom teacher or full-time librarian, or the annual death
3-18 benefit annuity based on the service of a member who at the time of
3-19 death held a position as a classroom teacher or full-time
3-20 librarian, may not be less than an amount computed on the basis of
3-21 the minimum annual salary provided by the Education Code for a
3-22 classroom teacher or full-time librarian, multiplied by 2.3 [2.2]
3-23 percent for each year of service credit in the retirement system.
3-24 SECTION 6. Sections 824.404(b)-(d), Government Code, are
3-25 amended to read as follows:
3-26 (b) If the designated beneficiary is the spouse or a
3-27 dependent parent of the decedent, the beneficiary may elect to
4-1 receive for life a monthly benefit of $250 [$200], beginning
4-2 immediately or on the date the beneficiary becomes 65 years old,
4-3 whichever is later.
4-4 (c) If the designated beneficiary is the spouse of the
4-5 decedent and has one or more children less than 18 years old or has
4-6 custody of one or more children of the decedent who are less than
4-7 18 years old, the designated beneficiary may elect to receive:
4-8 (1) a monthly benefit of $350 [$300] payable until the
4-9 youngest child becomes 18 years old; and
4-10 (2) when the youngest child has attained the age of
4-11 18, a monthly benefit for life of $250 [$200], beginning on the
4-12 date the beneficiary becomes 65 years old.
4-13 (d) If the designated beneficiary or beneficiaries are the
4-14 decedent's dependent children who are less than 18 years old, their
4-15 guardian may elect to receive for them:
4-16 (1) a monthly benefit of $350 [$300], payable as long
4-17 as two or more children are less than 18 years old; and
4-18 (2) a monthly benefit of $250 [$200], payable as long
4-19 as only one child is less than 18 years old.
4-20 SECTION 7. Section 824.602, Government Code, is amended by
4-21 amending Subsection (a) and adding Subsection (m) to read as
4-22 follows:
4-23 (a) Subject to Section 825.506, the retirement system may
4-24 not, under Section 824.601, withhold a monthly benefit payment if
4-25 the retiree is employed in a Texas public educational institution:
4-26 (1) as a substitute only with pay not more than the
4-27 daily rate of substitute pay established by the employer and, if
5-1 the retiree is a disability retiree, the employment has not
5-2 exceeded a total of 90 days in the school year;
5-3 (2) in a position, other than as a substitute, on no
5-4 more than a one-half time basis for the month;
5-5 (3) in one or more positions on as much as a full-time
5-6 basis, if the work occurs in not more than six months of a school
5-7 year that begins after the retiree's effective date of retirement;
5-8 (4) in a position, other than as a substitute, on no
5-9 more than a one-half time basis for no more than 90 days in the
5-10 school year, if the retiree is a disability retiree; [or]
5-11 (5) in a position as a classroom teacher on as much as
5-12 a full-time basis, if the retiree has retired under Section
5-13 824.202(a) without reduction for retirement at an early age, is
5-14 certified under Subchapter B, Chapter 21, Education Code, to teach
5-15 the subjects assigned, is teaching in an acute shortage area as
5-16 determined [defined] by the board of trustees of a school district
5-17 as provided by Subsection (m) [commissioner of education], and has
5-18 been separated from service with all public schools for at least 12
5-19 months; or
5-20 (6) as a bus driver for a school district on as much
5-21 as a full-time basis, if the retiree has retired under Section
5-22 824.202(a) without reduction for retirement at an early age.
5-23 (m) The board of trustees of a school district by rule shall
5-24 determine, for purposes of Subsection (a), whether there are acute
5-25 shortage areas in the district. A determination must be based on
5-26 acute shortage area guidelines that are adopted by the commissioner
5-27 of education. The guidelines adopted by the commissioner of
6-1 education must include a:
6-2 (1) list of acute shortage areas; and
6-3 (2) requirement that a certified applicant for a
6-4 position as a classroom teacher who is not a retiree be given
6-5 preference in hiring.
6-6 SECTION 8. Section 824.603, Government Code, is amended to
6-7 read as follows:
6-8 Sec. 824.603. EXCLUSION FROM CREDIT. Employment of a retiree
6-9 described by Section 824.602(a) does not entitle a retiree to
6-10 additional service credit, and the retiree so employed is not
6-11 required to make contributions to the system from compensation for
6-12 that employment. [Such employment may not be considered in applying
6-13 the provisions of Section 823.502.]
6-14 SECTION 9. Section 825.307(a), Government Code, is amended to
6-15 read as follows:
6-16 (a) The retirement system shall deposit in a member's
6-17 individual account in the member savings account:
6-18 (1) the amount of contributions to the retirement
6-19 system that is deducted from the member's compensation;
6-20 (2) the portion of a deposit made on or after
6-21 resumption of membership that represents the amount of retirement
6-22 benefits received;
6-23 (3) the portion of a deposit to reinstate service
6-24 credit previously canceled that represents the amount withdrawn or
6-25 refunded;
6-26 (4) the portion of a deposit to establish membership
6-27 service credit previously waived that is required by Section
7-1 823.202(b)(1);
7-2 (5) [the portion of a deposit to establish membership
7-3 service credit for service performed after retirement that is
7-4 required by Section 823.502(c)(3);]
7-5 [(6)] the portion of a deposit to establish military
7-6 service credit required by Section 823.302(c);
7-7 (6) [(7)] the portion of a deposit to establish
7-8 equivalent membership service credit required by Section
7-9 823.401(d), 823.402(e)(1) or (e)(2), 823.405 [823.404(c)], or
7-10 823.3021(f)(1); and
7-11 (7) [(8)] interest earned on money in the account as
7-12 provided by Subsections (b) and (c) and Section 825.313(c).
7-13 SECTION 10. Section 825.308, Government Code, is amended to
7-14 read as follows:
7-15 Sec. 825.308. STATE CONTRIBUTION ACCOUNT. The retirement
7-16 system shall deposit in the state contribution account:
7-17 (1) all state contributions to the retirement system
7-18 required by Section 825.404;
7-19 (2) amounts from the interest account as provided by
7-20 Section 825.313(b)(2) [825.313(b)(5)];
7-21 (3) retirement annuities waived or forfeited in
7-22 accordance with Section 824.601 or 824.004;
7-23 (4) fees collected under Section 825.403(h);
7-24 (5) fees and interest for reinstatement of service
7-25 credit or establishment of membership service credit as provided by
7-26 Section 823.202 or[,] 823.501[, or 823.502];
7-27 (6) the portion of a deposit required by Section
8-1 823.302 to establish military service credit that represents a fee;
8-2 and
8-3 (7) the portion of a deposit required by Section
8-4 823.401(e) to establish out-of-state service credit that represents
8-5 a fee.
8-6 SECTION 11. Section 825.408(a), Government Code, is amended
8-7 to read as follows:
8-8 (a) An employing district that fails to remit, before the
8-9 fourth [11th] day after the last day of a month, all member and
8-10 employer deposits and documentation of the deposits required by
8-11 this subchapter to be remitted by the district for the month shall
8-12 pay to the retirement system, in addition to the deposits, interest
8-13 on the unpaid or undocumented amounts at an annual rate compounded
8-14 monthly. The rate of interest is the rate established under
8-15 Section 825.313(b)(1), plus two percent. Interest required under
8-16 this section is creditable to the interest account. On request, the
8-17 retirement system may grant a waiver of the deadline imposed by
8-18 this subsection based on a district's financial or technological
8-19 resources.
8-20 SECTION 12. The heading of Section 825.507, Government Code,
8-21 is amended to read as follows:
8-22 Sec. 825.507. RECORD CONFIDENTIALITY [OF INFORMATION ABOUT
8-23 MEMBERS, RETIREES, ANNUITANTS, BENEFICIARIES, OR ALTERNATE PAYEES].
8-24 SECTION 13. Sections 825.507(a)-(d), Government Code, are
8-25 amended to read as follows:
8-26 (a) Records of a member, retiree, annuitant, beneficiary, or
8-27 alternate payee [Information contained in records] that are in the
9-1 custody of the retirement system or of an administrator, carrier,
9-2 or other governmental agency acting in cooperation with or on
9-3 behalf of the retirement system are [concerning an individual
9-4 member, retiree, annuitant, beneficiary, or alternate payee is]
9-5 confidential and not subject to public disclosure and are exempt
9-6 from the public access provisions of Chapter 552, except as
9-7 otherwise provided by this section.
9-8 (b) The retirement system may release records to [under
9-9 Section 552.101, and may not be disclosed in a form identifiable
9-10 with a specific individual unless]:
9-11 (1) a member, retiree, annuitant, beneficiary, or
9-12 alternate payee or to an authorized attorney, family member, or
9-13 representative acting on behalf of the member or annuitant [the
9-14 information is disclosed to:]
9-15 [(A) the individual or the individual's
9-16 attorney, guardian, executor, administrator, conservator, or other
9-17 person who the executive director determines is acting in the
9-18 interest of the individual or the individual's estate];
9-19 (2) [(B)] a spouse or former spouse of the individual
9-20 if the executive director determines that the information is
9-21 relevant to the spouse's or former spouse's interest in member
9-22 accounts, benefits, or other amounts payable by the retirement
9-23 system;
9-24 (3) an administrator, carrier, or agent or attorney
9-25 acting on behalf of the retirement system;
9-26 (4) another governmental agency having a legitimate
9-27 need for the information to perform the purposes of the retirement
10-1 system [(C) a governmental official or employee if the executive
10-2 director determines that disclosure of the information requested is
10-3 reasonably necessary to the performance of the duties of the
10-4 official or employee; or]
10-5 [(D) a person authorized by the individual in
10-6 writing to receive the information]; or
10-7 (5) a party in response [(2) the information is
10-8 disclosed pursuant] to a subpoena issued under applicable law [and
10-9 the executive director determines that the individual will have a
10-10 reasonable opportunity to contest the subpoena].
10-11 (c) The records of a member, retiree, annuitant,
10-12 beneficiary, or alternate payee remain confidential after release
10-13 to a person as authorized by this section.
10-14 (d) [(b)] This section does not prevent the disclosure of:
10-15 (1) the status or identity of an individual as a
10-16 member, former member, retiree, deceased member or retiree,
10-17 beneficiary, or alternate payee of the retirement system; or
10-18 (2) information that does not identify a specific
10-19 individual.
10-20 [(c) The executive director may designate other employees of
10-21 the retirement system to make the necessary determinations under
10-22 Subsection (a).]
10-23 [(d) A determination and disclosure under Subsection (a) may
10-24 be made without notice to the individual member, retiree,
10-25 annuitant, beneficiary, or alternate payee.]
10-26 SECTION 14. Notwithstanding Section 824.601, Government Code,
10-27 the retirement system may not withhold a monthly benefit payment
11-1 from a retiree who:
11-2 (1) before January 1, 2001, retired under Section
11-3 824.202(a), Government Code, without a reduction for retirement at
11-4 an early age;
11-5 (2) is employed as a classroom teacher in a Texas
11-6 public educational institution that is in an acute shortage area as
11-7 defined by the commissioner of education; and
11-8 (3) is certified under Subchapter B, Chapter 21,
11-9 Education Code, to teach the subjects that the retiree is assigned
11-10 to teach.
11-11 SECTION 15. Chapter 22, Acts of the 57th Legislature, 3rd
11-12 Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
11-13 Statutes), is amended by adding Sections 4, 5, 6, 7, 8, and 9 to
11-14 read as follows:
11-15 Sec. 4. In this section and in Sections 5, 6, 7, 8, and 9 of
11-16 this Act:
11-17 (1) "Board of trustees" means the board of trustees of
11-18 the Teacher Retirement System of Texas.
11-19 (2) "Cafeteria plan" has the meaning assigned by
11-20 Section 125 of the Internal Revenue Code of 1986, and its
11-21 subsequent amendments.
11-22 (3) "Educational institution" means a school district
11-23 or an open-enrollment charter school.
11-24 (4) "Eligible qualified investment" means a qualified
11-25 investment product that:
11-26 (A) is approved by the board of trustees under
11-27 Section 5 of this Act; or
12-1 (B) is not required to receive approval under
12-2 Section 5 of this Act.
12-3 (5) "Employee" means an employee of an educational
12-4 institution.
12-5 (6) "Qualified investment product" means an annuity or
12-6 investment that meets the requirements of Section 403(b), Internal
12-7 Revenue Code of 1986, and its subsequent amendments.
12-8 (7) "Retirement system" means the Teacher Retirement
12-9 System of Texas.
12-10 (8) "Salary reduction agreement" means an agreement
12-11 between an educational institution and an employee to reduce the
12-12 employee's salary for the purpose of making direct contributions to
12-13 or purchases of a qualified investment product.
12-14 Sec. 5. (a) An educational institution may enter into a
12-15 salary reduction agreement with an employee of the institution
12-16 only if the qualified investment product is an eligible qualified
12-17 investment product.
12-18 (b) The board of trustees shall approve a company that
12-19 offers a qualified investment product that is an annuity contract
12-20 under this section if the company:
12-21 (1) timely files an application for approval;
12-22 (2) is authorized to issue annuity contracts in this
12-23 state at the time the application is filed; and
12-24 (3) complies with the standards adopted under Section
12-25 6 of this Act.
12-26 (c) In determining whether a company complies with
12-27 Subsection (b)(3) of this section, the retirement system may:
13-1 (1) require the company to provide documentation of
13-2 the company's rating by nationally recognized rating services that
13-3 rate the financial strength of life and health insurance companies;
13-4 or
13-5 (2) rely on nationally recognized publications that
13-6 are commonly used in the financial industry.
13-7 (d) The board of trustees shall make a determination on an
13-8 application submitted under this section not later than the 90th
13-9 day after the date the application is filed.
13-10 (e) The board of trustees may adopt rules for the approval
13-11 of qualified investment products other than annuity contracts if
13-12 the rules are based on reasonable factors, including:
13-13 (1) the financial strength of the companies offering
13-14 the products; and
13-15 (2) the administrative costs to employees.
13-16 (f) The retirement system shall establish and maintain a
13-17 list of companies that are approved under this section. The list
13-18 must be:
13-19 (1) sent periodically to each educational institution;
13-20 and
13-21 (2) available on the retirement system's Internet
13-22 website.
13-23 Sec. 6. (a) The board of trustees by rule shall adopt
13-24 minimum standards of the financial strength that an annuity company
13-25 must attain to be approved under Section 5 of this Act.
13-26 (b) The standards adopted under this section must be based
13-27 on the ratings of at least four nationally recognized rating
14-1 services that evaluate the financial strength of life and health
14-2 insurance companies.
14-3 (c) If the board of trustees determines that there are fewer
14-4 than four nationally recognized rating services when rules are
14-5 adopted under this section, the standards adopted under this
14-6 section must be based on the rating standards of all acceptable
14-7 nationally recognized firms that evaluate the financial strength of
14-8 life and health insurance companies.
14-9 (d) The board of trustees may not unreasonably restrict an
14-10 employee's access to a reasonable variety of qualified investment
14-11 products that are annuity contracts.
14-12 Sec. 7. An educational institution may not:
14-13 (1) refuse to enter into a salary reduction agreement
14-14 with an employee if the qualified investment product that is the
14-15 subject of the salary reduction is an eligible qualified
14-16 investment;
14-17 (2) require or coerce an employee's attendance at any
14-18 meeting at which qualified investment products are marketed;
14-19 (3) allow the marketing of qualified investment
14-20 products at a meeting, organized by or for the educational
14-21 institution, at which employees of the educational institution are
14-22 enrolled in a cafeteria plan;
14-23 (4) grant exclusive access to information about an
14-24 employee's financial information, including information about an
14-25 employee's qualified investment products, to a company or agent
14-26 offering qualified investment products unless the employee consents
14-27 in writing to the access;
15-1 (5) accept any benefit from a company that offers
15-2 qualified investment products; or
15-3 (6) use public funds to recommend a qualified
15-4 investment product offered by a company or agent.
15-5 Sec. 8. (a) A person commits an offense if the person:
15-6 (1) sells or offers for sale a qualified investment
15-7 product that is not an eligible qualified investment product and
15-8 that the person reasonably believes will be the subject of a salary
15-9 reduction agreement;
15-10 (2) violates Article 21.07A, Insurance Code, with
15-11 regard to a qualified investment product that the person reasonably
15-12 believes will be the subject of a salary reduction agreement;
15-13 (3) engages in activity described by Section 4(2),
15-14 Article 21.21, Insurance Code, with regard to a qualified
15-15 investment product that the person reasonably believes will be the
15-16 subject of a salary reduction agreement; or
15-17 (4) violates Article 21.02-1, Insurance Code, with
15-18 regard to a qualified investment product that the person reasonably
15-19 believes will be the subject of a salary reduction agreement.
15-20 (b) An offense under this section is a Class A misdemeanor.
15-21 Sec. 9. (a) A person who offers to sell an annuity contract
15-22 that is or will likely be the subject of a salary reduction
15-23 agreement shall provide notice with a potential purchaser as
15-24 provided by this section.
15-25 (b) The retirement system shall prescribe the notice
15-26 required by Subsection (a) of this section.
15-27 (c) The retirement system shall make the notice available on
16-1 request and post the notice on the retirement system's website.
16-2 (d) The notice required under this section must:
16-3 (1) be in at least 14-point type;
16-4 (2) contain spaces for:
16-5 (A) the name, address, and telephone number of
16-6 the agent and company offering the annuity contract for sale;
16-7 (B) the name, address, and telephone number of
16-8 the company underwriting the annuity;
16-9 (C) the license number of the person offering to
16-10 sell the product;
16-11 (D) the name of the state agency that issued the
16-12 person's license; and
16-13 (E) with respect to fixed annuity products:
16-14 (i) the current interest rate or the
16-15 formula used to calculate the current rate of interest;
16-16 (ii) the guaranteed rate of interest;
16-17 (iii) how interest is compounded;
16-18 (iv) the amount of any up-front,
16-19 surrender, and market value adjustment charges;
16-20 (v) the time, if any, the annuity is
16-21 required to be in force before the purchaser is entitled to the
16-22 full bonus accumulation value;
16-23 (vi) the manner in which the amount of the
16-24 death benefit under the annuity is computed;
16-25 (vii) whether personal loans are available
16-26 under the annuity; and
16-27 (viii) what restrictions, if any, apply to
17-1 the availability of money attributable to the value of the annuity
17-2 once the purchaser is retired or separated from the employment of
17-3 the employer; and
17-4 (3) state, in plain language:
17-5 (A) that the company offering the annuity must
17-6 be approved under Section 5 of this Act;
17-7 (B) that the potential purchaser may contact the
17-8 retirement system or access its website to determine which
17-9 companies are approved under Section 5 of this Act;
17-10 (C) the civil remedies available to the
17-11 employee;
17-12 (D) that the employee may purchase any
17-13 qualified investment product; and
17-14 (E) the name and telephone number of the
17-15 attorney general's division that specializes in consumer
17-16 protection.
17-17 (e) In addition to the notice required under this section, a
17-18 variable annuity must be accompanied by the prospectus and any
17-19 other purchasing information required by law.
17-20 (f) If a notice and other information required under this
17-21 section is not provided, any annuity contract for which the notice
17-22 is required is voidable at the discretion of the purchaser. Not
17-23 later than the 30th day after the date an employee notifies the
17-24 seller in writing of the employee's election to void the contract,
17-25 the seller shall refund to the employee:
17-26 (1) the amount of all consideration paid to the
17-27 purchaser; and
18-1 (2) 10 percent interest up to the date the employee
18-2 provides the notice to the seller.
18-3 (g) A seller who receives a refund request under this
18-4 section is not required to make a refund otherwise required by
18-5 this section if, not later than the 30th day after the date the
18-6 seller receives a request for a refund from the employee, the
18-7 seller provides a copy of the notice signed by the employee.
18-8 SECTION 16. Section 16(h), Article 3.50-4, Insurance Code, is
18-9 amended to read as follows:
18-10 (h) An employing district that fails to remit, before the
18-11 fourth [11th] day after the last day of the month, all member
18-12 deposits required by this section to be remitted by the district
18-13 for the month shall pay to the Texas public school retired
18-14 employees group insurance fund, in addition to the deposits,
18-15 interest on the unpaid amounts at the annual rate of six percent
18-16 compounded monthly. On request, the trustee may grant a waiver of
18-17 the deadline imposed by this subsection based on a district's
18-18 financial or technological resources.
18-19 SECTION 17. Article 3.50-4a, Insurance Code, as added by
18-20 Chapter 372, Acts of the 76th Legislature, Regular Session, 1999,
18-21 is amended by adding Subsection (f) to read as follows:
18-22 (f) A premium or contribution on a policy, insurance
18-23 contract, or agreement authorized as provided by this article is
18-24 not subject to any state tax, regulatory fee, or surcharge,
18-25 including a premium or maintenance tax or fee.
18-26 SECTION 18. Article 3.50-4a, Insurance Code, as added by
18-27 Chapter 1540, Acts of the 76th Legislature, Regular Session, 1999,
19-1 is amended by adding Section 6 to read as follows:
19-2 Sec. 6. EXEMPTION FROM STATE TAXES AND FEES. A premium or
19-3 contribution on a policy, insurance contract, or agreement
19-4 authorized as provided by this article is not subject to any state
19-5 tax, regulatory fee, or surcharge, including a premium or
19-6 maintenance tax or fee.
19-7 SECTION 19. Article 21.02-1, Insurance Code, is amended to
19-8 read as follows:
19-9 Art. 21.02-1. PENALTY FOR UNLAWFULLY ACTING AS AGENT. Except
19-10 as provided by Chapter 22, Acts of the 57th Legislature, 3rd Called
19-11 Session, 1962 (Article 6228a-5, Vernon's Texas Civil Statutes),
19-12 whoever [Whoever] shall do or perform any of the acts or things
19-13 mentioned in the first article of this chapter for any insurance
19-14 company referred to in said article without such company having
19-15 first complied with the requirements of the laws of this State,
19-16 shall be fined not less than five hundred nor more than one
19-17 thousand dollars.
19-18 SECTION 20. Article 21.07A, Insurance Code, is amended to
19-19 read as follows:
19-20 Art. 21.07A. PENALTY FOR ACTING AS, OR EMPLOYING, LIFE,
19-21 HEALTH, OR ACCIDENT INSURANCE AGENT WITHOUT LICENSE. (a) Any
19-22 person who shall act as a life, health or accident insurance agent
19-23 without having first obtained a license as herein provided, or who
19-24 shall solicit life, health or accident insurance or act as a life,
19-25 health or accident agent without having been appointed and
19-26 designated by some duly authorized life insurance company, accident
19-27 insurance company, life and accident, health and accident, or life,
20-1 health and accident insurance company, or association, or
20-2 organization, local mutual aid association, or statewide mutual
20-3 association to do so as herein provided, or any person who shall
20-4 solicit life, health or accident insurance or act as an agent for
20-5 any person or insurance company or association not authorized to do
20-6 business in Texas; or any officer or representative of any life
20-7 insurance company, accident insurance company, life and accident,
20-8 health and accident, or life, health and accident insurance company
20-9 or association, or organization, local mutual aid association, or
20-10 statewide mutual association who shall knowingly contract with or
20-11 appoint as an agent any person who does not have a valid and
20-12 outstanding license, as herein provided shall be guilty of a
20-13 misdemeanor and, upon conviction, shall be fined any sum not in
20-14 excess of Five Hundred Dollars ($500) and shall be barred from
20-15 receiving a license as an insurance agent for a period of at least
20-16 two (2) years.
20-17 (b) Notwithstanding Subsection (a) of this article, a
20-18 violation of this article that is described by Section 8(a)(2),
20-19 Chapter 22, Acts of the 57th Legislature, 3rd Called Session, 1962
20-20 (Article 6228a-5, Vernon's Texas Civil Statutes), is subject to
20-21 prosecution under that section.
20-22 SECTION 21. Section 17.46(b), Business & Commerce Code, is
20-23 amended to read as follows:
20-24 (b) Except as provided in Subsection (d) of this section,
20-25 the term "false, misleading, or deceptive acts or practices"
20-26 includes, but is not limited to, the following acts:
20-27 (1) passing off goods or services as those of another;
21-1 (2) causing confusion or misunderstanding as to the
21-2 source, sponsorship, approval, or certification of goods or
21-3 services;
21-4 (3) causing confusion or misunderstanding as to
21-5 affiliation, connection, or association with, or certification by,
21-6 another;
21-7 (4) using deceptive representations or designations of
21-8 geographic origin in connection with goods or services;
21-9 (5) representing that goods or services have
21-10 sponsorship, approval, characteristics, ingredients, uses,
21-11 benefits, or quantities which they do not have or that a person has
21-12 a sponsorship, approval, status, affiliation, or connection which
21-13 he does not;
21-14 (6) representing that goods are original or new if
21-15 they are deteriorated, reconditioned, reclaimed, used, or
21-16 secondhand;
21-17 (7) representing that goods or services are of a
21-18 particular standard, quality, or grade, or that goods are of a
21-19 particular style or model, if they are of another;
21-20 (8) disparaging the goods, services, or business of
21-21 another by false or misleading representation of facts;
21-22 (9) advertising goods or services with intent not to
21-23 sell them as advertised;
21-24 (10) advertising goods or services with intent not to
21-25 supply a reasonable expectable public demand, unless the
21-26 advertisements disclosed a limitation of quantity;
21-27 (11) making false or misleading statements of fact
22-1 concerning the reasons for, existence of, or amount of price
22-2 reductions;
22-3 (12) representing that an agreement confers or
22-4 involves rights, remedies, or obligations which it does not have or
22-5 involve, or which are prohibited by law;
22-6 (13) knowingly making false or misleading statements
22-7 of fact concerning the need for parts, replacement, or repair
22-8 service;
22-9 (14) misrepresenting the authority of a salesman,
22-10 representative or agent to negotiate the final terms of a consumer
22-11 transaction;
22-12 (15) basing a charge for the repair of any item in
22-13 whole or in part on a guaranty or warranty instead of on the value
22-14 of the actual repairs made or work to be performed on the item
22-15 without stating separately the charges for the work and the charge
22-16 for the warranty or guaranty, if any;
22-17 (16) disconnecting, turning back, or resetting the
22-18 odometer of any motor vehicle so as to reduce the number of miles
22-19 indicated on the odometer gauge;
22-20 (17) advertising of any sale by fraudulently
22-21 representing that a person is going out of business;
22-22 (18) using or employing a chain referral sales plan in
22-23 connection with the sale or offer to sell of goods, merchandise, or
22-24 anything of value, which uses the sales technique, plan,
22-25 arrangement, or agreement in which the buyer or prospective buyer
22-26 is offered the opportunity to purchase merchandise or goods and in
22-27 connection with the purchase receives the seller's promise or
23-1 representation that the buyer shall have the right to receive
23-2 compensation or consideration in any form for furnishing to the
23-3 seller the names of other prospective buyers if receipt of the
23-4 compensation or consideration is contingent upon the occurrence of
23-5 an event subsequent to the time the buyer purchases the merchandise
23-6 or goods;
23-7 (19) representing that a guarantee or warranty confers
23-8 or involves rights or remedies which it does not have or involve,
23-9 provided, however, that nothing in this subchapter shall be
23-10 construed to expand the implied warranty of merchantability as
23-11 defined in Sections 2.314 through 2.318 and Sections 2A.212 through
23-12 2A.216 of the Business & Commerce Code to involve obligations in
23-13 excess of those which are appropriate to the goods;
23-14 (20) promoting a pyramid promotional scheme, as
23-15 defined by Section 17.461;
23-16 (21) representing that work or services have been
23-17 performed on, or parts replaced in, goods when the work or services
23-18 were not performed or the parts replaced;
23-19 (22) filing suit founded upon a written contractual
23-20 obligation of and signed by the defendant to pay money arising out
23-21 of or based on a consumer transaction for goods, services, loans,
23-22 or extensions of credit intended primarily for personal, family,
23-23 household, or agricultural use in any county other than in the
23-24 county in which the defendant resides at the time of the
23-25 commencement of the action or in the county in which the defendant
23-26 in fact signed the contract; provided, however, that a violation
23-27 of this subsection shall not occur where it is shown by the person
24-1 filing such suit he neither knew or had reason to know that the
24-2 county in which such suit was filed was neither the county in which
24-3 the defendant resides at the commencement of the suit nor the
24-4 county in which the defendant in fact signed the contract;
24-5 (23) the failure to disclose information concerning
24-6 goods or services which was known at the time of the transaction if
24-7 such failure to disclose such information was intended to induce
24-8 the consumer into a transaction into which the consumer would not
24-9 have entered had the information been disclosed;
24-10 (24) using the term "corporation," "incorporated," or
24-11 an abbreviation of either of those terms in the name of a business
24-12 entity that is not incorporated under the laws of this state or
24-13 another jurisdiction; [or]
24-14 (25) taking advantage of a disaster declared by the
24-15 governor under Chapter 418, Government Code, by:
24-16 (A) selling or leasing fuel, food, medicine, or
24-17 another necessity at an exorbitant or excessive price; or
24-18 (B) demanding an exorbitant or excessive price
24-19 in connection with the sale or lease of fuel, food, medicine, or
24-20 another necessity; or
24-21 (26) selling, offering to sell, or illegally promoting
24-22 an annuity contract under Chapter 22, Acts of the 57th Legislature,
24-23 3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
24-24 Statutes), with the intent that the annuity contract will be the
24-25 subject of a salary reduction agreement, as defined by that Act, if
24-26 the annuity contract is not an eligible qualified investment under
24-27 that Act.
25-1 SECTION 22. Section 17.49, Business & Commerce Code, is
25-2 amended by amending Subsection (c) and adding Subsection (h) to
25-3 read as follows:
25-4 (c) Nothing in this subchapter shall apply to a claim for
25-5 damages based on the rendering of a professional service, the
25-6 essence of which is the providing of advice, judgment, opinion, or
25-7 similar professional skill. This exemption does not apply to:
25-8 (1) an express misrepresentation of a material fact
25-9 that cannot be characterized as advice, judgment, or opinion;
25-10 (2) a failure to disclose information in violation of
25-11 Section 17.46(b)(23);
25-12 (3) an unconscionable action or course of action that
25-13 cannot be characterized as advice, judgment, or opinion; [or]
25-14 (4) breach of an express warranty that cannot be
25-15 characterized as advice, judgment, or opinion; or
25-16 (5) a violation of Section 17.46(b)(26).
25-17 (h) A person who violates Section 17.46(b)(26) is jointly
25-18 and severally liable under that subdivision for actual damages,
25-19 court costs, and attorney's fees. Subject to Chapter 41, Civil
25-20 Practice and Remedies Code, exemplary damages may be awarded in the
25-21 event of fraud or malice.
25-22 SECTION 23. The following sections of the Government Code
25-23 are repealed:
25-24 (1) Section 823.404; and
25-25 (2) Section 823.502.
25-26 SECTION 24. (a) Monthly payments of a death or retirement
25-27 benefit annuity by the Teacher Retirement System of Texas are
26-1 increased in accordance with this section beginning with the
26-2 payment due at the end of September 2001.
26-3 (b) The increase does not apply to payments under Section
26-4 824.304(a), 824.404, or 824.501, Government Code.
26-5 (c) For the purpose of computing the monthly payments of
26-6 annuities for retirees who retired on or before August 31, 2000,
26-7 the amount of the monthly payment is equal to the amount of the
26-8 last monthly payment made before the effective date of this Act
26-9 multiplied by 1.06.
26-10 (d) After making the computations required by Subsection (c)
26-11 of this section, the Teacher Retirement System of Texas shall
26-12 increase the monthly payment of each annuity made by the system
26-13 beginning on September 1, 2001, other than an annuity under Section
26-14 824.304(a), 824.404, or 824.501, Government Code, by 4.5 percent,
26-15 which is a benefit equivalent to the benefit provided by using a
26-16 2.3-percent multiplier for computing annuities.
26-17 SECTION 25. (a) The changes in law made to Chapter 22, Acts
26-18 of the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5,
26-19 Vernon's Texas Civil Statutes), by this Act do not apply to a
26-20 contract between an employee of a school district or
26-21 open-enrollment charter school and a company offering investments
26-22 or annuities that was entered into under Chapter 22, Acts of the
26-23 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5,
26-24 Vernon's Texas Civil Statutes), before the effective date of this
26-25 Act.
26-26 (b) A contract described by Subsection (a) of this section
26-27 is governed by the law in effect immediately before the effective
27-1 date of this Act, and the former law is continued in effect for
27-2 that purpose.
27-3 SECTION 26. The Teacher Retirement System of Texas shall
27-4 prescribe the notice required by Section 9, Chapter 22, Acts of the
27-5 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5,
27-6 Vernon's Texas Civil Statutes), not later than December 1, 2001.
27-7 SECTION 27. (a) Except as otherwise provided by this
27-8 section, this Act takes effect September 1, 2001.
27-9 (b) The changes in law made by this Act to the following
27-10 laws take effect January 1, 2002:
27-11 (1) Chapter 22, Acts of the 57th Legislature, 3rd
27-12 Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
27-13 Statutes);
27-14 (2) Article 21.02-1, Insurance Code;
27-15 (3) Article 21.07A, Insurance Code;
27-16 (4) Section 17.46, Business & Commerce Code; and
27-17 (5) Section 17.49, Business & Commerce Code.
27-18 (c) The changes in law made by this Act to the following
27-19 laws take effect September 1, 2002:
27-20 (1) Section 825.408(a), Government Code; and
27-21 (2) Section 16(h), Article 3.50-4, Insurance Code.
27-22 (d) The changes in law made by this Act to Section 824.602,
27-23 Government Code, apply beginning with the 2001-2002 school year.
27-24 Section 824.602, Government Code, as amended by this Act, takes
27-25 effect immediately if this Act receives a vote of two-thirds of all
27-26 the members elected to each house, as provided by Section 39,
27-27 Article III, Texas Constitution. If this Act does not receive the
28-1 vote necessary for immediate effect, Section 824.602, Government
28-2 Code, as amended by this Act, takes effect September 1, 2001.