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.