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.