By King of Uvalde                                     H.B. No. 3407
         77R8646 GJH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to credit in the Teacher Retirement System of Texas that
 1-3     is required by a court order.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter E, Chapter 823, Government Code, is
 1-6     amended by adding Section 823.4045 to read as follows:
 1-7           Sec. 823.4045.  COURT-ORDERED CREDIT. (a)  In this section,
 1-8     "court order" means a court order that:
 1-9                 (1)  finds that a school district wrongfully terminated
1-10     a member;
1-11                 (2)  requires the school district to reemploy the
1-12     member; and
1-13                 (3)  requires the establishment of credit in the
1-14     retirement system for all or part of the service credit the member
1-15     would have otherwise established during the period between the date
1-16     of the wrongful termination and the date of reemployment.
1-17           (b)  An eligible member may establish equivalent membership
1-18     service credit for credit required by a court order.
1-19           (c)  A member is eligible to establish credit under this
1-20     section if the member has at least 10 years of service credit in
1-21     the retirement system for actual service in public schools, at
1-22     least one year of which is for service performed after the period
1-23     for which credit is sought under this section.
1-24           (d)  A member may establish credit under this section by
 2-1     depositing with the retirement system for each year of service
 2-2     claimed a contribution computed at the rate of 12 percent of the
 2-3     full-time rate of the member's annual compensation, determined as
 2-4     provided by Section 822.201, during the first year of service for
 2-5     which the member received membership credit in the retirement
 2-6     system that is after the period for which credit is sought.
 2-7           (e)  In addition to the contribution required by Subsection
 2-8     (d), a member claiming credit under this section must pay a fee of
 2-9     eight percent, compounded annually, of the required contribution
2-10     from the date of first eligibility to the date of deposit.  A
2-11     deposit for at least one year of credit, including the fee, must be
2-12     made with an initial application for credit, and all payments for
2-13     credit claimed under this section must be made before retirement.
2-14           (f)  The amount of service credit a member may establish
2-15     under this section may not exceed two years.
2-16           (g)  After a member makes the deposits required by this
2-17     section, the retirement system shall grant the member one year of
2-18     equivalent membership service credit for each year of credit
2-19     required under the court order.  The retirement system may not use
2-20     service credit granted under this section in computing a member's
2-21     annual average compensation.
2-22           SECTION 2. Section 823.004(a), Government Code, is amended to
2-23     read as follows:
2-24           (a)  All credit for military service, out-of-state service,
2-25     developmental leave, service previously waived, work experience in
2-26     a career or technological field, court-ordered credit, and service
2-27     transferred to the retirement system under Chapter 805 shall be
 3-1     computed on a September 1 through August 31 school year. Payments
 3-2     for service described by this section must be completed not later
 3-3     than the later of the member's retirement date or the last day of
 3-4     the month in which the member submits a retirement application.
 3-5           SECTION 3. Section 825.307(a), Government Code, is amended to
 3-6     read as follows:
 3-7           (a)  The retirement system shall deposit in a member's
 3-8     individual account in the member savings account:
 3-9                 (1)  the amount of contributions to the retirement
3-10     system that is deducted from the member's compensation;
3-11                 (2)  the portion of a deposit made on or after
3-12     resumption of membership that represents the amount of retirement
3-13     benefits received;
3-14                 (3)  the portion of a deposit to reinstate service
3-15     credit previously canceled that represents the amount withdrawn or
3-16     refunded;
3-17                 (4)  the portion of a deposit to establish membership
3-18     service credit previously waived that is required by Section
3-19     823.202(b)(1);
3-20                 (5)  the portion of a deposit to establish membership
3-21     service credit for service performed after retirement that is
3-22     required by Section 823.502(c)(3);
3-23                 (6)  the portion of a deposit to establish military
3-24     service credit required by Section 823.302(c);
3-25                 (7)  the portion of a deposit to establish equivalent
3-26     membership service credit required by Section 823.401(d),
3-27     823.402(e)(1) or (e)(2), 823.404(c), [or] 823.3021(f)(1), or
 4-1     Sections 823.4045(d) and (e); and
 4-2                 (8)  interest earned on money in the account as
 4-3     provided by Subsections (b) and (c) and Section 825.313(c).
 4-4           SECTION 4. Section 825.410(a), Government Code, is amended to
 4-5     read as follows:
 4-6           (a)  Payments to establish special service credit as
 4-7     authorized in Sections 805.002, 823.302, 823.304, 823.401, 823.501,
 4-8     823.4045, and 825.403 may be made in a lump sum by a monthly
 4-9     payroll deduction in an amount not less than one-twelfth of the
4-10     contribution required to establish at least one year of service
4-11     credit, or in equal monthly installments over a period not to
4-12     exceed the lesser of the number of years of credit to be purchased
4-13     or 60 months.  Installment and payroll deduction payments are due
4-14     on the first day of each calendar month in the payment period.  If
4-15     an installment or payroll deduction payment is not made in full
4-16     within 60 days after the due date, the retirement system may refund
4-17     all installment or payroll deduction payments less fees paid on the
4-18     lump sum due when installment or payroll deduction payments began.
4-19     Partial payment of an installment or payroll deduction payment may
4-20     be treated as nonpayment.  A check returned for insufficient funds
4-21     or a closed account shall be treated as nonpayment.  When two or
4-22     more consecutive monthly payments have a returned check, a refund
4-23     may be made.  If the retirement system refunds payments pursuant to
4-24     this subsection, the member is not permitted to use the installment
4-25     method of payment or the payroll deduction method, as applicable,
4-26     for the same service for three years after the date of the refund.
4-27     A member who requests and receives a refund of installment or
 5-1     payroll deduction payments also is not permitted to use the same
 5-2     method of payment for the same service for three years after the
 5-3     date of the refund.
 5-4           SECTION 5. This Act takes effect September 1, 2001.