By Gallego H.B. No. 3446
77R5868 PB/ESH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a statewide group insurance program for employees and
1-3 retirees of certain public schools.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. GROUP INSURANCE PROGRAM
1-6 SECTION 1.01. Title 1, Insurance Code, is amended by adding
1-7 Chapter 3A to read as follows:
1-8 CHAPTER 3A. TEXAS SCHOOL EMPLOYEES UNIFORM GROUP
1-9 INSURANCE BENEFITS ACT
1-10 SUBCHAPTER A. GENERAL PROVISIONS
1-11 Art. 3A.001. SHORT TITLE. This chapter may be cited as the
1-12 Texas School Employees Uniform Group Insurance Benefits Act.
1-13 Art. 3A.002. DEFINITIONS. In this chapter:
1-14 (1) "Administering firm" means any firm designated by
1-15 the board of trustees to administer any coverage, service, benefit,
1-16 or requirement under this chapter and the board of trustees' rules
1-17 adopted under this chapter.
1-18 (2) "Board of trustees" means the board of trustees of
1-19 the Teacher Retirement System of Texas.
1-20 (3) "Cafeteria plan" means a plan as defined and
1-21 authorized by Section 125, Internal Revenue Code of 1986 (26 U.S.C.
1-22 Section 125), as amended.
1-23 (4) "Employee" means an individual who:
1-24 (A) is a member of the system;
2-1 (B) is employed by a school district
2-2 participating in the group program; and
2-3 (C) is not a direct participant in a group
2-4 insurance program under the Texas Employees Uniform Group Insurance
2-5 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the
2-6 Texas State College and University Employees Uniform Insurance
2-7 Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code).
2-8 (5) "Employer" means a school district.
2-9 (6) "Group program" means the Texas school employees
2-10 group insurance program authorized by this chapter.
2-11 (7) "Health benefits plan" means a group insurance
2-12 policy or contract, medical, dental, or hospital service agreement,
2-13 membership or subscription contract, salary continuation plan,
2-14 health maintenance organization agreement, preferred provider
2-15 arrangement, or any similar group arrangement or any combination of
2-16 those policies, plans, contracts, agreements, or arrangements to
2-17 provide, pay for, or reimburse expenses for health care services,
2-18 including comparable health care services for employees and
2-19 retirees who rely solely on spiritual means through prayer for
2-20 healing in accordance with the teaching of a recognized church or
2-21 denomination.
2-22 (8) "Optional insurance fund" means the school
2-23 employees optional insurance fund created under Article 3A.202 of
2-24 this chapter.
2-25 (9) "Participating school district" means a school
2-26 district that has elected under Article 3A.101 of this chapter to
2-27 participate in the group program and has not discontinued
3-1 participation under Article 3A.109 of this chapter.
3-2 (10) "Plan provider" means an insurance company, group
3-3 hospital service corporation, health maintenance organization, or
3-4 other entity authorized by the department under this code to
3-5 provide any insurance coverage, benefit, or service provided by
3-6 this chapter.
3-7 (11) "Primary health fund" means the school employees
3-8 primary health coverage fund described under Article 3A.201 of this
3-9 chapter.
3-10 (12) "Program participant" means an employee or a
3-11 retiree who participates in the group program.
3-12 (13) "School district" means a political subdivision
3-13 organized to provide general elementary or secondary public
3-14 education, including an open-enrollment charter school that has
3-15 been granted a charter under Subchapter D, Chapter 12, Education
3-16 Code. The term does not include:
3-17 (A) a state agency;
3-18 (B) a junior college district;
3-19 (C) a special-purpose school district
3-20 established under Section 11.351, Education Code; or
3-21 (D) the Windham School District established
3-22 under Section 19.002, Education Code.
3-23 (14) "System" means the Teacher Retirement System of
3-24 Texas.
3-25 Art. 3A.003. DEFINITION OF DEPENDENT AND RELATED TERMS. In
3-26 this chapter:
3-27 (1) "Dependent" means:
4-1 (A) the spouse of a person;
4-2 (B) an unmarried child of the person if that
4-3 child is under 25 years of age, including:
4-4 (i) an adopted child;
4-5 (ii) a stepchild, foster child, or other
4-6 child who has a regular parent-child relationship with the person;
4-7 or
4-8 (iii) a recognized natural child; or
4-9 (C) the person's natural child, adopted child,
4-10 foster child, stepchild, or other child who has a regular
4-11 parent-child relationship with the person, without regard to the
4-12 age of the child, if the child:
4-13 (i) lives with or has care provided by the
4-14 person on a regular basis; and
4-15 (ii) is mentally retarded or physically
4-16 incapacitated to an extent that the child is dependent on the
4-17 person for care or support, as determined by the board of trustees.
4-18 (2) "Dependent child of a deceased person" means:
4-19 (A) an unmarried child of the deceased person if
4-20 the child is under 25 years of age, including the persons listed by
4-21 Subdivision (1)(B); or
4-22 (B) a person who is a deceased person's
4-23 recognized natural child, adopted child, foster child, stepchild,
4-24 or other child who had a regular parent-child relationship with the
4-25 deceased person, without regard to the age of the child, if while
4-26 the person was alive, the child:
4-27 (i) lived with or had care provided by the
5-1 deceased person on a regular basis; and
5-2 (ii) was mentally retarded or physically
5-3 incapacitated to an extent that the child was dependent on the
5-4 deceased person or surviving spouse for care or support, as
5-5 determined by the board of trustees.
5-6 (3) "Surviving dependent child" means:
5-7 (A) a dependent child of a deceased retiree who
5-8 has survived the deceased retiree and the deceased retiree's
5-9 spouse; or
5-10 (B) a dependent child of a deceased employee who
5-11 has survived the deceased employee and the deceased employee's
5-12 spouse if the deceased employee:
5-13 (i) had 10 or more years of actual service
5-14 credit in the system; or
5-15 (ii) was a program participant at the time
5-16 of death.
5-17 (4) "Surviving spouse" means:
5-18 (A) the surviving spouse of a deceased retiree;
5-19 or
5-20 (B) the surviving spouse of a deceased employee
5-21 who:
5-22 (i) had 10 or more years of actual service
5-23 credit in the system; or
5-24 (ii) was a program participant at the time
5-25 of death.
5-26 Art. 3A.004. DEFINITION OF RETIREE. In this chapter,
5-27 "retiree" means an individual who:
6-1 (1) retired under the system with at least 10 years of
6-2 credit for actual service for an employer or has retired under the
6-3 system for disability and is entitled to receive an annuity from
6-4 the system under Section 824.304(b), Government Code; and
6-5 (2) is not eligible to directly participate in a group
6-6 insurance program under the Texas Employees Uniform Group Insurance
6-7 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code) or the
6-8 Texas State College and University Employees Uniform Insurance
6-9 Benefits Act (Article 3.50-3, Vernon's Texas Insurance Code).
6-10 Art. 3A.005. EXEMPTION FROM PROCESS. (a) The following are
6-11 exempt from execution, attachment, garnishment, or any other
6-12 process:
6-13 (1) any contribution or benefit payment under this
6-14 chapter;
6-15 (2) any right, benefit, or payment accruing to any
6-16 person under this chapter; and
6-17 (3) any money in any fund administered under this
6-18 chapter.
6-19 (b) The items listed in Subsection (a) of this article may
6-20 not be assigned except for direct payment to benefit providers as
6-21 authorized by the board of trustees by contract or rule.
6-22 Art. 3A.006. EXEMPTION FROM STATE TAXES AND FEES. A premium
6-23 or contribution on a policy, insurance contract, or agreement
6-24 authorized by this chapter is not subject to any state tax,
6-25 regulatory fee, or surcharge, including a contribution or
6-26 maintenance tax or fee.
6-27 Art. 3A.007. APPLICABILITY OF OTHER LAW. This chapter does
7-1 not prohibit a school district from providing additional or
7-2 supplemental insurance coverage under Article 3.51 or 26.036 of
7-3 this code or Section 22.005, Education Code.
7-4 SUBCHAPTER B. POWERS AND DUTIES OF BOARD OF TRUSTEES
7-5 Art. 3A.051. ADMINISTRATION. (a) The board of trustees is
7-6 the trustee for the group program and shall administer the group
7-7 program.
7-8 (b) The board of trustees shall adopt rules, plans,
7-9 procedures, and orders reasonably necessary to implement this
7-10 chapter, including:
7-11 (1) minimum benefit and financing standards for group
7-12 coverage for program participants, dependents, surviving spouses,
7-13 and surviving dependent children;
7-14 (2) primary health coverage and optional insurance
7-15 coverage for program participants, dependents, surviving spouses,
7-16 and surviving dependent children;
7-17 (3) procedures for contributions and deductions,
7-18 including annuity or payroll deductions;
7-19 (4) periods for enrollment and selection of optional
7-20 coverage and procedures for enrolling and exercising options under
7-21 the group program;
7-22 (5) adoption of a cafeteria plan;
7-23 (6) procedures for claims administration; and
7-24 (7) procedures to administer the fund.
7-25 (c) In administration of the group program, the board of
7-26 trustees shall determine whether employees and retirees should be
7-27 treated as one risk pool or as separate risk pools. Based on that
8-1 determination, the board of trustees shall administer the group
8-2 program in the manner that results in the greater cost savings to
8-3 the state.
8-4 Art. 3A.052. PERSONNEL. The board of trustees may employ
8-5 persons to assist the board of trustees in administering this
8-6 chapter.
8-7 Art. 3A.053. USE OF GENERIC AND MAIL-ORDER DRUGS. The board
8-8 of trustees shall adopt rules to maximize any available cost
8-9 savings from the use of generic or mail-order prescription drugs
8-10 unless the use of those drugs would cause an undue burden on or
8-11 adversely affect the health of any individual covered by a health
8-12 benefits plan adopted under this chapter.
8-13 Art. 3A.054. CONTRACTS. (a) The board of trustees may, on
8-14 a competitive bid basis, contract with:
8-15 (1) a qualified, experienced firm of group insurance
8-16 specialists; or
8-17 (2) an administering firm to act for the board of
8-18 trustees in the capacity of an independent administrator and
8-19 manager of a plan authorized under this chapter.
8-20 (b) An independent administrator selected by the board of
8-21 trustees shall assist the board of trustees to ensure the proper
8-22 administration of this chapter and the coverages, services, and
8-23 benefits provided for or authorized by this chapter.
8-24 (c) The board of trustees may enter into interagency
8-25 contracts with any state agency, including the Employees Retirement
8-26 System of Texas, for assistance in implementing or administering
8-27 the group program provided by this chapter.
9-1 Art. 3A.055. ADVISORY COMMITTEES. The board of trustees may
9-2 appoint advisory committees to advise the system in the
9-3 implementation or administration of the group program. The
9-4 advisory committees may include a credentialing advisory committee,
9-5 a medical advisory committee, and a retirement advisory committee.
9-6 SUBCHAPTER C. COVERAGE PLANS; PROGRAM PARTICIPATION
9-7 Art. 3A.101. GROUP HEALTH BENEFIT PLANS. (a) The board of
9-8 trustees shall establish plans of group coverages for plan
9-9 participants and their dependents. The plans of group benefits
9-10 must include at least two tiers of group health benefits coverage,
9-11 with benefits at different levels in each tier, ranging from the
9-12 first tier catastrophic coverage plan to the primary health plan.
9-13 The primary health plan shall be comparable in scope and, to the
9-14 greatest extent possible, in cost to the health benefit plan
9-15 coverage provided under the Texas Employees Uniform Group Insurance
9-16 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code).
9-17 (b) A school district must select the same tier group
9-18 coverage plan for all district employees. A school district that
9-19 selects a coverage plan other than the primary health plan, or that
9-20 does not levy a tax under Section 45.003(f), Education Code, is not
9-21 entitled to state contributions under this chapter or otherwise for
9-22 payments for employee health benefits coverage, other than the
9-23 state assistance to which the district may be entitled under
9-24 Chapter 42, Education Code.
9-25 (c) An employee of a school district may not participate in
9-26 a group coverage plan unless the district has selected that group
9-27 coverage plan.
10-1 Art. 3A.102. DISTRICT PARTICIPATION IN GROUP PROGRAM. (a)
10-2 Beginning September 1, 2001, a school district may elect to
10-3 participate in the group program provided by this chapter unless
10-4 the district is participating in a group insurance program under
10-5 the Texas Employees Uniform Group Insurance Benefits Act (Article
10-6 3.50-2, Vernon's Texas Insurance Code).
10-7 (b) A school district that elects to participate in the
10-8 group program is required to participate for a minimum of two
10-9 years. The beginning of a district's participation in the program
10-10 must coincide with the beginning of a school year in an
10-11 odd-numbered year.
10-12 (c) The board by rule may establish a biennial deadline for
10-13 notification of the board of an election to begin participation.
10-14 (d) A participating school district may discontinue
10-15 participation only as provided by Article 3A.109 of this chapter.
10-16 Art. 3A.103. PARTICIPATION BY EMPLOYEES. (a) Each full-time
10-17 employee or retiree of a participating school district is
10-18 automatically covered by the primary health plan for employees or
10-19 retirees, as applicable, unless:
10-20 (1) the employing school district does not select the
10-21 primary health plan; or
10-22 (2) the employee or retiree specifically waives
10-23 coverage or unless the employee or retiree is expelled from the
10-24 group program.
10-25 (b) Each part-time employee of a participating school
10-26 district is eligible to participate in a health plan provided by
10-27 this chapter on application in the manner provided by the board of
11-1 trustees unless the employee has been expelled from the group
11-2 program. A participating school district shall notify each of its
11-3 part-time employees of the employee's eligibility for
11-4 participation.
11-5 Art. 3A.104. COVERAGE FOR DEPENDENTS. A program participant
11-6 who is covered by a health plan under this chapter is entitled to
11-7 obtain for a dependent of the program participant coverage in the
11-8 health plan as determined by the board of trustees. Additional
11-9 contribution payments for dependent coverage shall be made by the
11-10 program participant in the manner determined by the board of
11-11 trustees.
11-12 Art. 3A.105. COVERAGE FOR SURVIVING SPOUSE OR DEPENDENTS OF
11-13 SURVIVING SPOUSE. (a) A surviving spouse may elect to retain or
11-14 obtain coverage from the group program for the surviving spouse or
11-15 dependents of the surviving spouse at the applicable rate for a
11-16 dependent of a program participant.
11-17 (b) A surviving spouse must provide payment of applicable
11-18 contributions in the manner established by rules adopted by the
11-19 board of trustees.
11-20 Art. 3A.106. COVERAGE FOR SURVIVING DEPENDENT CHILD. (a) A
11-21 surviving dependent child, the guardian of the child's estate, or
11-22 the person having custody of the child may elect to retain or
11-23 obtain coverage from the group program for the surviving dependent
11-24 child at the applicable rate for a dependent.
11-25 (b) The applicable contributions must be provided in the
11-26 manner established by rules adopted by the board of trustees.
11-27 Art. 3A.107. OPTIONAL GROUP COVERAGE. (a) The board of
12-1 trustees shall contract with a qualified plan provider to offer
12-2 program participants:
12-3 (1) optional permanent life insurance coverage;
12-4 (2) long-term care insurance that provides coverage
12-5 for home, community, and institutional care; and
12-6 (3) insurance for short-term or long-term loss of
12-7 salary because of disability.
12-8 (b) The board of trustees may offer program participants
12-9 other optional group insurance coverages considered advisable by
12-10 the board of trustees.
12-11 (c) In contracting for any benefits under this article,
12-12 competitive bidding is required. The board of trustees by rule
12-13 shall prescribe the procedure for conducting the bidding. The
12-14 rules may provide criteria to determine qualified plan providers.
12-15 The board of trustees is not required to select the lowest bid and
12-16 shall consider ability to service contracts, past experiences,
12-17 financial stability, and other relevant criteria. If the board of
12-18 trustees awards a contract to an entity whose products deviate from
12-19 those for which bids were solicited, the deviation shall be
12-20 recorded and the reasons for the deviation shall be fully justified
12-21 in the minutes of the next meeting of the board of trustees.
12-22 (d) Insurance coverage provided under this article shall be
12-23 made available periodically during open-enrollment periods
12-24 determined by the board of trustees.
12-25 Art. 3A.108. AVAILABILITY OF OPTIONAL COVERAGE. (a) The
12-26 board of trustees shall offer the optional insurance coverage under
12-27 this chapter to:
13-1 (1) employees through their employers; and
13-2 (2) retirees through the system.
13-3 (b) The board of trustees shall offer long-term care
13-4 insurance to a program participant and a program participant's:
13-5 (1) dependent;
13-6 (2) surviving spouse;
13-7 (3) parent or grandparent; and
13-8 (4) spouse's or surviving spouse's parent.
13-9 (c) Each program participant who participates in optional
13-10 insurance coverage provided under this chapter is responsible for
13-11 the full cost of that coverage.
13-12 (d) An employee who participates in optional insurance
13-13 coverage provided under this chapter shall pay contributions by
13-14 payroll deduction remitted by the employee's employer at the times
13-15 and in the manner provided by the trustee.
13-16 (e) A retiree who participates in optional insurance
13-17 coverage provided under this chapter shall pay contributions by
13-18 deduction from the retiree's monthly retirement annuity.
13-19 Art. 3A.109. DISCONTINUANCE OF PARTICIPATION. (a) A school
13-20 district participating in the group program may elect to
13-21 discontinue participation by notifying the board of trustees in the
13-22 manner prescribed by the board of trustees and obtaining the board
13-23 of trustees' determination that the district is committed to
13-24 offering an alternate basic plan of group health benefits that
13-25 meets the requirements of Section 22.004, Education Code, at no
13-26 cost to its participating employees.
13-27 (b) Participation in the group program ends immediately
14-1 before the beginning of the first school year that begins in an
14-2 odd-numbered year after the date the board of trustees makes the
14-3 determination required by Subsection (a) of this article.
14-4 SUBCHAPTER D. CONTRIBUTIONS
14-5 Art. 3A.151. FUNDING OF HEALTH COVERAGE. (a) The state
14-6 shall contribute for each program participant who is covered by a
14-7 health plan under this chapter the amount provided by the General
14-8 Appropriations Act.
14-9 (b) The board of trustees shall pay from state
14-10 contributions, school district contributions, and other amounts
14-11 deposited in the primary health fund:
14-12 (1) 100 percent of the cost of the plan of health
14-13 benefits coverage selected by a participating school district for
14-14 employees of the district participating in the group program and
14-15 for retirees who retired with at least 10 years of actual service
14-16 credit with the system; and
14-17 (2) 50 percent of the cost of the plan of health
14-18 benefits coverage selected by a participating school district for
14-19 dependents of employees and of retirees who retired with at least
14-20 10 years of actual service credit with the system.
14-21 (c) That portion of the cost of health coverage selected by
14-22 the program participant that exceeds the amount of state
14-23 contributions shall be paid by the employee or retiree or the
14-24 employee's school district, according to the employee's employment
14-25 contract.
14-26 Art. 3A.152. STATE AND EMPLOYEE CONTRIBUTIONS. (a) For
14-27 each state fiscal year, each employee of a participating school
15-1 district, as a condition of employment, shall contribute to the
15-2 primary health fund an amount equal to 0.25 percent of the
15-3 employee's salary. Each month the employer of the employee shall
15-4 deduct the contributions from the employee's salary and shall remit
15-5 the contributions to the board of trustees in the manner prescribed
15-6 by the board of trustees. Instead of deducting the contributions
15-7 from salaries, an employer may assume and pay the total
15-8 contributions due from its active employees for any month.
15-9 (b) The state shall contribute as the state's contribution
15-10 to the primary health fund each fiscal year an amount equal to 0.5
15-11 percent of the salary of each employee of a participating school
15-12 district. The state may contribute amounts in addition to the
15-13 contribution required by this subsection.
15-14 (c) It is the intent of the legislature that the
15-15 contributions made under Subsections (a) and (b) of this article be
15-16 treated as a continuation of the same contributions made under
15-17 Sections 16(a) and (b), Article 3.50-4 of this code, as those
15-18 sections existed on August 31, 2002.
15-19 (d) If after the state fiscal year beginning September 1,
15-20 2002, the amount of state and employee contributions to the fund is
15-21 raised by the legislature above the percentages provided by
15-22 Subsections (a) and (b) of this section to provide adequate funding
15-23 for the group program, the ratio between the state's contribution
15-24 and the employees' contributions must be maintained at two to one.
15-25 (e) Contributions from employees become the property of the
15-26 primary health fund on receipt by the board of trustees and may not
15-27 be refunded to the employee under any circumstances, including
16-1 termination of employment.
16-2 (f) Contributions to the primary health fund deducted from
16-3 the salary of an employee are part of the employee's annual
16-4 compensation for purposes of the system.
16-5 (g) Before November 1 of each even-numbered year, the board
16-6 of trustees shall certify to the Legislative Budget Board and the
16-7 governor's budget office for information and review the amounts
16-8 necessary to pay the contributions of the state to the primary
16-9 health fund under this article. Not later than August 31 of each
16-10 year, the board of trustees shall certify to the comptroller the
16-11 estimated amount of state contributions to be received by the
16-12 primary health fund for the next fiscal year under the
16-13 appropriations authorized by this article.
16-14 (h) State contributions under this article shall be paid
16-15 from the general revenue fund in equal monthly installments, based
16-16 on the annual estimate certified by the board of trustees to the
16-17 comptroller for that year and subject to any express limitations
16-18 specified in the Act making the appropriation. Variations between
16-19 the certified amount and the actual amount due for the year shall
16-20 be reconciled at the close of the fiscal year, and proper
16-21 adjustments in the annual contributions to the primary health fund
16-22 shall be made.
16-23 (i) An employer that fails to remit, before the 11th day
16-24 after the last day of the month for which the salary is paid, the
16-25 amounts required under this article shall pay to the primary health
16-26 fund, in addition to those amounts, interest on the unpaid amounts
16-27 at the annual rate of six percent compounded monthly.
17-1 (j) An employer holds amounts due to the primary health fund
17-2 under this article in trust for the fund and its participants and
17-3 may not divert the amounts for any other purpose.
17-4 SUBCHAPTER E. FUNDS
17-5 Art. 3A.201. SCHOOL EMPLOYEES PRIMARY HEALTH COVERAGE FUND.
17-6 (a) The school employees primary health coverage fund is created
17-7 as a trust fund with the comptroller, who is custodian of the fund.
17-8 (b) The board of trustees shall administer the fund on
17-9 behalf of the participants in the plans of coverage provided under
17-10 this chapter.
17-11 (c) The following shall be paid into the primary health
17-12 fund:
17-13 (1) distributions to the fund from the permanent
17-14 school fund as provided by Section 5, Article VII, Texas
17-15 Constitution;
17-16 (2) ad valorem tax revenue or other revenue of
17-17 participating school districts as provided by Section 45.0032,
17-18 Education Code;
17-19 (3) state appropriations for the premiums or other
17-20 contributions for primary health coverage for program participants;
17-21 (4) premiums or other contributions paid for primary
17-22 health coverage of the retirees, dependents, surviving spouses, and
17-23 surviving children of program participants;
17-24 (5) money recovered under contracts for the
17-25 implementation or administration of the primary health plan;
17-26 (6) appropriations for implementation and
17-27 administration of the primary health plan;
18-1 (7) investment and depository income of the primary
18-2 health fund;
18-3 (8) contributions paid by employees of participating
18-4 school districts and the state under Article 3A.152 of this
18-5 chapter; and
18-6 (9) other money required or authorized to be paid into
18-7 the primary health fund.
18-8 (d) Money in the primary health fund may be used only to pay
18-9 for primary health coverage provided under this chapter, including
18-10 the expenses of administering the program.
18-11 Art. 3A.202. PUBLIC SCHOOL EMPLOYEES OPTIONAL INSURANCE
18-12 FUND. (a) The school employees optional insurance fund is created
18-13 as a trust fund with the comptroller, who is custodian of the fund.
18-14 (b) The board of trustees shall administer the optional
18-15 insurance fund on behalf of the participants in the plans of
18-16 insurance coverage provided under this chapter.
18-17 (c) The following shall be credited to the optional
18-18 insurance fund:
18-19 (1) premiums and other contributions from participants
18-20 in plans of optional insurance;
18-21 (2) money recovered under contracts for providing
18-22 optional insurance coverage;
18-23 (3) investment and depository income of the optional
18-24 insurance fund; and
18-25 (4) other money required or authorized to be paid into
18-26 the optional insurance fund.
18-27 (d) Money in the optional insurance fund may be used only to
19-1 pay for optional insurance coverage, including the expenses of
19-2 administering the optional insurance program.
19-3 Art. 3A.203. INVESTMENT AUTHORITY. The board of trustees
19-4 may invest assets of any fund administered under this subchapter in
19-5 the manner provided by Subchapter D, Chapter 825, Government Code,
19-6 for assets of the system.
19-7 SUBCHAPTER F. RECORDS, PROCEEDINGS, AND ACCOUNTING
19-8 Art. 3A.251. CONFIDENTIALITY OF RECORDS. (a) Section
19-9 825.507, Government Code, applies to information in records
19-10 relating to a retiree, employee, annuitant, or beneficiary under
19-11 the group program.
19-12 (b) The system may disclose to a health or benefit provider
19-13 information in the records of an individual that the system
19-14 determines is necessary to administer the group program.
19-15 Art. 3A.252. CLAIM DENIAL OR EXPULSION. (a) A program
19-16 participant or a covered dependent, surviving spouse, or surviving
19-17 dependent child may appeal a claim denial or an expulsion from the
19-18 group program to the board of trustees.
19-19 (b) Adjudication of claims and expulsion from the group
19-20 program are subject to the contested case provisions under Chapter
19-21 2001, Government Code.
19-22 Art. 3A.253. HEARING EXAMINER. The board of trustees may
19-23 delegate its authority to adjudicate claims and expulsions to a
19-24 qualified hearing examiner.
19-25 Art. 3A.254. APPEAL. A decision of the board of trustees or
19-26 a hearing examiner is subject to review by a district court in
19-27 Travis County or in the county in which the claimant resides.
20-1 ARTICLE 2. FUNDING OF GROUP INSURANCE PROGRAM
20-2 SECTION 2.01. Section 42.253, Education Code, is amended by
20-3 amending Subsections (f)-(l) and adding Subsection (m) to read as
20-4 follows:
20-5 (f) For the first school year in which a school district
20-6 levies a tax under Section 45.003(f), the rate authorized under
20-7 Subsection (e) is reduced by an amount equal to the portion of the
20-8 district's maintenance and operations tax rate for the final year
20-9 of the preceding biennium necessary for the district to pay for its
20-10 expenditures for that year, if any, for group health coverage for
20-11 district employees. The commissioner may adopt rules necessary to
20-12 administer this subsection. A decision of the commissioner under
20-13 this subsection is final and may not be appealed.
20-14 (g) Amounts transferred to the reserve account under
20-15 Subsection (e) shall be used in the succeeding fiscal year to
20-16 finance increases in allocations to school districts under
20-17 Subsection (j) [(i)]. If the amount in the reserve account is less
20-18 than the amount of the increases under Subsection (j) [(i)] for the
20-19 second year of a state fiscal biennium, the commissioner shall
20-20 certify the amount of the difference to the Legislative Budget
20-21 Board not later than January 1 of the second year of the state
20-22 fiscal biennium. The Legislative Budget Board shall propose to the
20-23 legislature that the certified amount be transferred to the
20-24 foundation school fund from the economic stabilization fund and
20-25 appropriated for the purpose of increases in allocations under
20-26 Subsection (i) [(h)].
20-27 (h) [(g)] If a school district demonstrates to the
21-1 satisfaction of the commissioner that the estimate of the
21-2 district's tax rate, student enrollment, or taxable value of
21-3 property used in determining the amount of state funds to which the
21-4 district is entitled are so inaccurate as to result in undue
21-5 financial hardship to the district, the commissioner may adjust
21-6 funding to that district in that school year to the extent that
21-7 funds are available for that year, including funds in the reserve
21-8 account. Funds in the reserve account may not be used under this
21-9 subsection until any reserve funds have been used for purposes of
21-10 Subsection (g) [(f)].
21-11 (i) [(h)] If the legislature fails during the regular
21-12 session to enact the transfer and appropriation proposed under
21-13 Subsection (g) [(f)] and there are not funds available under
21-14 Subsection (k) [(j)], the commissioner shall reduce the total
21-15 amount of state funds allocated to each district by an amount
21-16 determined by a method under which the application of the same
21-17 number of cents of increase in tax rate in all districts applied to
21-18 the taxable value of property of each district, as determined under
21-19 Subchapter M, Chapter 403, Government Code, results in a total levy
21-20 equal to the total reduction. The following fiscal year, a
21-21 district's entitlement under this section is increased by an amount
21-22 equal to the reduction made under this subsection.
21-23 (j) [(i)] Not later than March 1 each year, the commissioner
21-24 shall determine the actual amount of state funds to which each
21-25 school district is entitled under the allocation formulas in this
21-26 chapter for the current school year and shall compare that amount
21-27 with the amount of the warrants issued to each district for that
22-1 year. If the amount of the warrants differs from the amount to
22-2 which a district is entitled because of variations in the
22-3 district's tax rate, student enrollment, or taxable value of
22-4 property, the commissioner shall adjust the district's entitlement
22-5 for the next fiscal year accordingly.
22-6 (k) [(j)] The legislature may appropriate funds necessary
22-7 for increases under Subsection (j) [(i)] from funds that the
22-8 comptroller, at any time during the fiscal year, finds are
22-9 available.
22-10 (l) [(k)] The commissioner shall compute for each school
22-11 district the total amount by which the district's allocation of
22-12 state funds is increased or reduced under Subsection (j) [(i)] and
22-13 shall certify that amount to the district.
22-14 (m) [(l)] In this section, the number of students in
22-15 weighted average daily attendance is calculated in the manner
22-16 provided by Section 42.302.
22-17 SECTION 2.02. Section 42.302(b), Education Code, is amended
22-18 to read as follows:
22-19 (b) In computing the district enrichment tax rate of a
22-20 school district, the total amount of maintenance and operations
22-21 taxes collected by the school district does not include the amount
22-22 of:
22-23 (1) the district's local fund assignment under Section
22-24 42.252; [or]
22-25 (2) taxes levied under Section 45.003(f); or
22-26 (3) taxes paid into a tax increment fund under Chapter
22-27 311, Tax Code.
23-1 SECTION 2.03. The heading to Chapter 43, Education Code, is
23-2 amended to read as follows:
23-3 CHAPTER 43. PERMANENT SCHOOL FUND, [AND] AVAILABLE
23-4 SCHOOL FUND, AND SCHOOL EMPLOYEES PRIMARY HEALTH COVERAGE FUND
23-5 SECTION 2.04. Sections 43.001 and 43.002, Education Code, are
23-6 amended to read as follows:
23-7 Sec. 43.001. COMPOSITION OF PERMANENT SCHOOL FUND AND
23-8 AVAILABLE SCHOOL FUND. (a) The permanent school fund, which is a
23-9 perpetual endowment for the public schools of this state, consists
23-10 of:
23-11 (1) all land appropriated for the public schools by
23-12 the constitution and laws of this state;
23-13 (2) all of the unappropriated public domain remaining
23-14 in this state, including all land recovered by the state by suit or
23-15 otherwise except pine forest land as defined by Section 88.111;
23-16 (3) all proceeds from the authorized sale of permanent
23-17 school fund land;
23-18 (4) all proceeds from the lawful sale of any other
23-19 properties belonging to the permanent school fund;
23-20 (5) all investments authorized by Section 43.003 of
23-21 properties belonging to the permanent school fund; [and]
23-22 (6) all income from the mineral development of
23-23 permanent school fund land, including income from mineral
23-24 development of riverbeds and other submerged land;
23-25 (7) the interest and dividends arising from any
23-26 securities or funds belonging to the permanent school fund;
23-27 (8) all interest derivable from the proceeds of the
24-1 sale of land set apart for the permanent school fund; and
24-2 (9) all money derived from the lease of land belonging
24-3 to the permanent school fund.
24-4 (b) The available school fund, which shall be apportioned
24-5 annually to each school district [county] according to its
24-6 scholastic population, consists of:
24-7 (1) the distributions to the fund from the permanent
24-8 school fund as provided by Section 5, Article VII, Texas
24-9 Constitution;
24-10 (2) [the interest and dividends arising from any
24-11 securities or funds belonging to the permanent school fund;]
24-12 [(2) all interest derivable from the proceeds of the
24-13 sale of land set apart for the permanent school fund;]
24-14 [(3) all money derived from the lease of land
24-15 belonging to the permanent school fund;]
24-16 [(4)] one-fourth of all revenue derived from all state
24-17 occupation taxes, exclusive of delinquencies and cost of
24-18 collection;
24-19 (3) [(5)] one-fourth of revenue derived from state
24-20 gasoline and special fuels excise taxes as provided by law; and
24-21 (4) [(6)] all other appropriations to the available
24-22 school fund made by the legislature for public school purposes.
24-23 (c) The term "scholastic population" in Subsection (b) or
24-24 any other law governing the apportionment, distribution, and
24-25 transfer of the available school fund means all students of school
24-26 age enrolled in average daily attendance the preceding school year
24-27 in the public elementary and high school grades of a school
25-1 district in [districts within or under the jurisdiction of a county
25-2 of] this state.
25-3 Sec. 43.002. TRANSFERS FROM PERMANENT SCHOOL FUND AND
25-4 GENERAL REVENUE FUND TO AVAILABLE FUND. (a) On the first working
25-5 day of each month in a state fiscal year, the comptroller shall
25-6 transfer from the permanent school fund to the available school
25-7 fund an amount equal to one-twelfth of the annual distribution from
25-8 the permanent school fund to the available school fund for the
25-9 fiscal year as determined by the State Board of Education under
25-10 Section 5, Article VII, Texas Constitution, and by the General
25-11 Appropriations Act.
25-12 (a-1) Notwithstanding Subsection (a), for the fiscal year
25-13 beginning September 1, 2001, the comptroller shall transfer from
25-14 the permanent school fund to the available school fund:
25-15 (1) on January 2, 2002, an amount equal to
25-16 five-twelfths of the annual distribution from the permanent school
25-17 fund to the available school fund for that fiscal year as provided
25-18 by Section 5, Article VII, Texas Constitution, and by the General
25-19 Appropriations Act; and
25-20 (2) on the first working day of each month after
25-21 January 2002, an amount equal to one-twelfth of the annual
25-22 distribution from the permanent school fund to the available school
25-23 fund for that fiscal year as provided by Section 5, Article VII,
25-24 Texas Constitution, and by the General Appropriations Act.
25-25 (a-2) Subsection (a-1) and this subsection expire September
25-26 1, 2002.
25-27 (b) Of the amounts available for transfer from the general
26-1 revenue fund to the available school fund for the months of January
26-2 and February of each fiscal year, no more than the amount necessary
26-3 to enable the comptroller to distribute from the available school
26-4 fund an amount equal to 9-1/2 percent of the estimated annual
26-5 available school fund apportionment to category 1 school districts,
26-6 as defined by Section 42.259, and 3-1/2 percent of the estimated
26-7 annual available school fund apportionment to category 2 school
26-8 districts, as defined by Section 42.259, may be transferred from
26-9 the general revenue fund to the available school fund. Any
26-10 remaining amount that would otherwise be available for transfer for
26-11 the months of January and February shall be transferred from the
26-12 general revenue fund to the available school fund in equal amounts
26-13 in June and in August of the same fiscal year.
26-14 SECTION 2.05. Chapter 43, Education Code, is amended by
26-15 adding Section 43.0021 to read as follows:
26-16 Sec. 43.0021. TRANSFERS FROM PERMANENT SCHOOL FUND AND
26-17 GENERAL REVENUE FUND TO SCHOOL EMPLOYEES PRIMARY HEALTH COVERAGE
26-18 FUND. (a) On the first working day of each month in a state
26-19 fiscal year, the comptroller shall transfer from the permanent
26-20 school fund to the school employees primary health coverage fund an
26-21 amount equal to one-twelfth of the annual distribution from the
26-22 permanent school fund to the school employees primary health
26-23 coverage fund for the fiscal year as determined by the State Board
26-24 of Education under Section 5, Article VII, Texas Constitution, and
26-25 by the General Appropriations Act.
26-26 (b) Notwithstanding Subsection (a), for the fiscal year
26-27 beginning September 1, 2001, the comptroller shall transfer from
27-1 the permanent school fund to the school employees primary health
27-2 coverage fund:
27-3 (1) on January 2, 2002, an amount equal to
27-4 five-twelfths of the annual distribution from the permanent school
27-5 fund to the school employees primary health coverage fund for that
27-6 fiscal year as provided by Section 5, Article VII, Texas
27-7 Constitution, and by the General Appropriations Act; and
27-8 (2) on the first working day of each month after
27-9 January 2002, an amount equal to one-twelfth of the annual
27-10 distribution from the permanent school fund to the school employees
27-11 primary health coverage fund for that fiscal year as provided by
27-12 Section 5, Article VII, Texas Constitution, and by the General
27-13 Appropriations Act.
27-14 (c) Subsection (b) and this subsection expire September 1,
27-15 2002.
27-16 SECTION 2.06. Section 45.003, Education Code, is amended by
27-17 amending Subsection (d) and adding Subsections (f)-(h) to read as
27-18 follows:
27-19 (d) Except as provided by Subsection (f), a [A] proposition
27-20 submitted to authorize the levy of maintenance taxes must include
27-21 the question of whether the governing board or commissioners court
27-22 may levy, assess, and collect annual ad valorem taxes for the
27-23 further maintenance of public schools, at a rate not to exceed the
27-24 rate, which may be not more than $1.50 on the $100 valuation of
27-25 taxable property in the district, stated in the proposition.
27-26 (f) In addition to a proposition submitted under Subsection
27-27 (d), a proposition may be submitted to authorize the levy of
28-1 maintenance taxes that includes the question of whether the
28-2 governing board or commissioners court may levy, assess, and
28-3 collect annual ad valorem taxes for the specific purpose of
28-4 receiving state equalization aid to permit the district or county
28-5 to participate in the Texas school employees group insurance
28-6 program under Chapter 3A, Insurance Code, at:
28-7 (1) a rate not to exceed the rate stated in the
28-8 proposition; or
28-9 (2) a rate sufficient to permit the district to
28-10 participate in the Texas school employees group insurance program.
28-11 (g) On the ballot containing a proposition submitted under
28-12 Subsection (f), immediately following the proposition the ballot
28-13 shall state: "This tax, if approved, would result in a (net
28-14 decrease or net increase) of ($___) on the $100 valuation of
28-15 taxable property in the (district or county)." For a district that
28-16 levies a tax for which state aid will not be provided under Section
28-17 42.253(f) at a rate that is greater than the tax rate under Section
28-18 45.0031 for the following school year, the amount of a net decrease
28-19 to be stated is the difference between the portion of the district
28-20 tax rate for which state aid will not be provided under Section
28-21 42.253(f) and the tax rate under Section 45.0031. The amount of a
28-22 net increase to be stated is:
28-23 (1) for a district that levies a tax for which state
28-24 aid will not be provided under Section 42.253(f) at a rate that is
28-25 less than the tax rate under Section 45.0031 for the following
28-26 school year, the difference between the tax rate under Section
28-27 45.0031 and the portion of the district tax rate for which state
29-1 aid will not be provided under Section 42.253(f); or
29-2 (2) for a district that does not levy a tax for which
29-3 state aid will not be provided under Section 42.253(f), the tax
29-4 rate under Section 45.0031 for the following school year.
29-5 (h) The limitation on the tax rate under Subsection (d) does
29-6 not apply to the combined rate of taxes imposed as a result of an
29-7 election under Subsection (d) and an election under Subsection (f).
29-8 SECTION 2.07. Subchapter A, Chapter 45, Education Code, is
29-9 amended by adding Sections 45.0031 and 45.0032 to read as follows:
29-10 Sec. 45.0031. TAX RATE FOR PARTICIPATION IN GROUP HEALTH
29-11 PLANS. (a) The legislature in the General Appropriations Act
29-12 shall set for each year of the state fiscal biennium the effective
29-13 tax rate, expressed as a number of cents on the $100 valuation of
29-14 taxable property, that school districts must levy under Section
29-15 45.003(f) to receive state equalization aid to permit the districts
29-16 to participate in the Texas school employees group insurance
29-17 program under Chapter 3A, Insurance Code. An effective tax rate
29-18 under this subsection must be based on the estimates required under
29-19 Section 42.254(a)(2) of the taxable value of property of school
29-20 districts participating in the Texas school employees group
29-21 insurance program. The employees of a district that levies the
29-22 required effective tax rate and remits the required revenue as
29-23 provided by Section 45.0032 are eligible to participate in the
29-24 program and are entitled to receive the primary health plan
29-25 coverage under the Texas school employees group insurance program
29-26 without any further expenditure by the district.
29-27 (b) Each year, the comptroller shall certify to each
30-1 participating school district in writing:
30-2 (1) the effective tax rate set under Subsection (a);
30-3 (2) the amount of revenue the district must provide to
30-4 participate in the Texas school employees group insurance program,
30-5 which is determined by multiplying the effective tax rate set under
30-6 Subsection (a) by the quotient of the district's taxable value of
30-7 property for the preceding tax year, as determined under Subchapter
30-8 M, Chapter 403, Government Code, or, if applicable, under Section
30-9 42.2521, divided by 100; and
30-10 (3) as determined by the board of trustees of the
30-11 Teacher Retirement System of Texas, the actual cost per full-time
30-12 employee, expressed as a monthly premium, for coverage under the
30-13 primary health plan and under each other group coverage plan
30-14 established under Article 3A.101, Insurance Code.
30-15 (c) Each school district that will levy taxes under Section
30-16 45.003(f) shall determine the nominal rate the district must levy
30-17 to collect the amount of revenue certified under Subsection (b)(2).
30-18 In determining a nominal rate under this subsection, a school
30-19 district shall use the district's anticipated collection rate
30-20 certified to the district under Section 26.04(b), Tax Code.
30-21 Sec. 45.0032. REMITTANCE OF REVENUE FOR PARTICIPATION IN
30-22 GROUP HEALTH PLAN. (a) A school district that levies a tax under
30-23 Section 45.003(f) to permit the district to participate in the
30-24 Texas school employees group insurance plan under Chapter 3A,
30-25 Insurance Code, shall, in the time and manner prescribed by
30-26 comptroller rule, remit to the comptroller for deposit in the
30-27 school employees primary health coverage fund the amount of revenue
31-1 certified to the district under Section 45.0031(b)(2).
31-2 (b) If the revenue received from a tax levied under Section
31-3 45.003(f) is less than the amount of revenue certified to the
31-4 school district under Section 45.0031(b)(2), or if the district
31-5 does not levy a tax under Section 45.003(f), the district shall
31-6 remit other revenue sufficient to comply with Subsection (a). If
31-7 the revenue received from a tax levied under Section 45.003(f) is
31-8 greater than the amount of revenue certified to the district under
31-9 Section 45.0031(b)(2), the district shall:
31-10 (1) deposit or invest the excess funds in accordance
31-11 with law; and
31-12 (2) use the excess funds and the interest or earnings
31-13 on the excess funds to comply with the district's obligation under
31-14 this section in the subsequent fiscal year.
31-15 (c) If a school district fails to comply with Subsection
31-16 (a), the comptroller or commissioner, as appropriate, may:
31-17 (1) reduce the district's aid under Chapter 42 for the
31-18 current or a subsequent school year;
31-19 (2) take any action permitted by Section 42.258 for
31-20 recovery of an overallocation of state funds distributed under
31-21 Chapter 42; or
31-22 (3) if the district is required to take action under
31-23 Chapter 41 to reduce its wealth per student to the equalized wealth
31-24 level, adjust the district's wealth per student in the amount
31-25 necessary to require the district to purchase attendance credits
31-26 under Subchapter D, Chapter 41, costing an amount equal to the
31-27 amount of revenue the district fails to remit under Subsection (a).
32-1 (d) For each month of a state fiscal year, a school district
32-2 that does not levy a tax under Section 45.003(f) but that
32-3 participates in the Texas school employees group insurance plan
32-4 shall, in the time and manner prescribed by comptroller rule, remit
32-5 to the comptroller for deposit in the school employees primary
32-6 health coverage fund an amount equal to the monthly premium for the
32-7 group coverage plan selected by the district under the program, as
32-8 certified to the district under Section 45.0031(b)(3), multiplied
32-9 by the number of full-time employees covered for that month.
32-10 (e) The comptroller shall deposit all revenue received under
32-11 this section in the school employees primary health coverage fund
32-12 under Article 3A.201, Insurance Code.
32-13 SECTION 2.08. Section 26.08, Tax Code, is amended by adding
32-14 Subsection (k) to read as follows:
32-15 (k) For the first tax year in which a school district levies
32-16 a tax under Section 45.003(f), Education Code, the rollback rate
32-17 for the district under Subsection (i) is reduced by an amount equal
32-18 to the portion of the district maintenance and operations tax rate
32-19 for which state aid will not be provided under Section 42.253(f),
32-20 Education Code.
32-21 ARTICLE 3. CONFORMING AMENDMENT
32-22 SECTION 3.01. Section 22.004, Education Code, is amended to
32-23 read as follows:
32-24 Sec. 22.004. GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES. (a)
32-25 Each district may participate in the group benefits program
32-26 provided under Chapter 3A, Insurance Code.
32-27 (b) A district that does not elect to participate in the
33-1 program described by Subsection (a) shall make available to its
33-2 employees group health coverage provided by a risk pool established
33-3 by one or more school districts under Chapter 172, Local Government
33-4 Code, or under a policy of insurance or group contract issued by an
33-5 insurer, a company subject to Chapter 20, Insurance Code, or a
33-6 health maintenance organization under the Texas Health Maintenance
33-7 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
33-8 coverage must meet the substantive coverage requirements of Article
33-9 3.51-6, Insurance Code, and any other law applicable to group
33-10 health insurance policies or contracts issued in this state. The
33-11 coverage must include major medical treatment but may exclude
33-12 experimental procedures. In this subsection, "major medical
33-13 treatment" means a medical, surgical, or diagnostic procedure for
33-14 illness or injury. The coverage may include managed care or
33-15 preventive care and must be comparable to the basic health coverage
33-16 provided under the Texas Employees Uniform Group Insurance Benefits
33-17 Act (Article 3.50-2, Vernon's Texas Insurance Code). The board of
33-18 trustees of the Teacher Retirement System of Texas shall adopt
33-19 rules to determine whether a school district's group health
33-20 coverage is comparable to the basic health coverage specified by
33-21 this subsection. The rules must provide for consideration of the
33-22 following factors concerning the district's coverage in determining
33-23 whether the district's coverage is comparable to the basic health
33-24 coverage specified by this subsection:
33-25 (1) the deductible amount for service provided inside
33-26 and outside of the network;
33-27 (2) the coinsurance percentages for service provided
34-1 inside and outside of the network;
34-2 (3) the maximum amount of coinsurance payments a
34-3 covered person is required to pay;
34-4 (4) the amount of the copayment for an office visit;
34-5 (5) the schedule of benefits and the scope of
34-6 coverage;
34-7 (6) the lifetime maximum benefit amount; and
34-8 (7) verification that the coverage is issued by a
34-9 provider licensed to do business in this state by the Texas
34-10 Department of Insurance or is provided by a risk pool authorized
34-11 under Chapter 172, Local Government Code, or that a district is
34-12 capable of covering the assumed liabilities in the case of coverage
34-13 provided through district self-insurance.
34-14 (c) [(b)] The cost of the coverage provided under the
34-15 program described by Subsection (a) shall be paid by the state, the
34-16 district, and the employees in the manner provided by Chapter 3A,
34-17 Insurance Code. The cost of coverage provided under a plan adopted
34-18 under Subsection (b) shall [may] be shared by the employees and the
34-19 district without contribution by the state.
34-20 (d) [(c)] Each district shall report the district's
34-21 compliance with this section [subsection] to the executive director
34-22 of the Teacher Retirement System of Texas not later than March 1 of
34-23 each even-numbered year in the manner required by the board of
34-24 trustees of the Teacher Retirement System of Texas. For a district
34-25 that does not elect to participate in the program described by
34-26 Subsection (a), the [The] report must be based on the district
34-27 group health coverage plan in effect during the current plan year
35-1 and must include:
35-2 (1) appropriate documentation of:
35-3 (A) the district's contract for group health
35-4 coverage with a provider licensed to do business in this state by
35-5 the Texas Department of Insurance or a risk pool authorized under
35-6 Chapter 172, Local Government Code; or
35-7 (B) a resolution of the board of trustees of the
35-8 district authorizing a self-insurance plan for district employees
35-9 and of the district's review of district ability to cover the
35-10 liability assumed;
35-11 (2) the schedule of benefits;
35-12 (3) the premium rate sheet, including the amount paid
35-13 by the district and employee;
35-14 (4) the number of employees covered by the [each]
35-15 health coverage plan offered by the district; and
35-16 (5) any other information considered appropriate by
35-17 the executive director of the Teacher Retirement System of Texas.
35-18 (e) For each district that does not elect to participate in
35-19 the program described by Subsection (a), and based [(d) Based] on
35-20 the criteria prescribed by Subsection (b) [(a)], the executive
35-21 director of the Teacher Retirement System of Texas shall certify
35-22 whether a district's coverage is comparable to the basic health
35-23 coverage provided under the Texas Employees Uniform Group Insurance
35-24 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code). If
35-25 the executive director of the Teacher Retirement System of Texas
35-26 determines that the group health coverage offered by a district is
35-27 not comparable, the executive director shall report that
36-1 information to the district and to the Legislative Budget Board.
36-2 The executive director shall submit a report to the legislature not
36-3 later than September 1 of each even-numbered year describing the
36-4 status of each district's group health coverage program based on
36-5 the information contained in the report required by Subsection (d)
36-6 [(c)] and the certification required by this subsection.
36-7 (f) [(e)] A school district that does not elect to
36-8 participate in the program described by Subsection (a) may not
36-9 contract with an insurer, a company subject to Chapter 20,
36-10 Insurance Code, or a health maintenance organization to issue a
36-11 policy or contract under this section, or with any person to assist
36-12 the school district in obtaining or managing the policy or contract
36-13 unless, before the contract is entered into, the insurer, company,
36-14 organization, or person provides the district with an audited
36-15 financial statement showing the financial condition of the insurer,
36-16 company, organization, or person.
36-17 (g) [(f)] An insurer, a company subject to Chapter 20,
36-18 Insurance Code, or a health maintenance organization that issues a
36-19 policy or contract under this section and any person that assists
36-20 the school district in obtaining or managing the policy or contract
36-21 for compensation shall provide an annual audited financial
36-22 statement to the school district showing the financial condition of
36-23 the insurer, company, organization, or person.
36-24 (h) [(g)] An audited financial statement provided under this
36-25 section must be made in accordance with rules adopted by the
36-26 commissioner of insurance or state auditor, as applicable.
36-27 SECTION 3.02. Section 43.016, Education Code, is amended to
37-1 read as follows:
37-2 Sec. 43.016. USE OF AVAILABLE SCHOOL FUND. All available
37-3 school funds shall be appropriated in each school district [county]
37-4 for the education of its students [children].
37-5 SECTION 3.03. Section 42.158(d), Education Code, is amended
37-6 to read as follows:
37-7 (d) The amount appropriated for allotments under this
37-8 section may not exceed $25 million in a school year. If the total
37-9 amount of allotments to which districts are entitled under this
37-10 section for a school year exceeds the amount appropriated for
37-11 allotments under this section, the commissioner shall reduce each
37-12 district's allotment under this section in the manner provided by
37-13 Section 42.253(i) [42.253(h)].
37-14 SECTION 3.04. Section 42.2521(b), Education Code, is amended
37-15 to read as follows:
37-16 (b) To the extent that a sufficient amount of money is not
37-17 available to fund all adjustments under this section, the
37-18 commissioner shall reduce adjustments in the manner provided by
37-19 Section 42.253(i) [42.253(h)] so that the total amount of
37-20 adjustments equals the amount of money available to fund the
37-21 adjustments.
37-22 SECTION 3.05. Section 46.009(b), Education Code, is amended
37-23 to read as follows:
37-24 (b) If the amount appropriated for purposes of this
37-25 subchapter for a year is less than the total amount determined
37-26 under Subsection (a) for that year, the commissioner shall:
37-27 (1) transfer from the Foundation School Program to the
38-1 instructional facilities program the amount by which the total
38-2 amount determined under Subsection (a) exceeds the amount
38-3 appropriated; and
38-4 (2) reduce each district's foundation school fund
38-5 allocations in the manner provided by Section 42.253(i)
38-6 [42.253(h)].
38-7 SECTION 3.06. Section 56.208(a), Education Code, is amended
38-8 to read as follows:
38-9 (a) The Early High School Graduation Scholarship program is
38-10 financed under the Foundation School Program. Funding for the
38-11 state tuition credits is not subject to the provisions of Sections
38-12 42.253(e) through (l) [(k)].
38-13 SECTION 3.07. Section 371.005(f), Government Code, is amended
38-14 to read as follows:
38-15 (f) The governor or board may adopt an order under this
38-16 section withholding or transferring any portion of the total amount
38-17 appropriated to finance the foundation school program for a fiscal
38-18 year. The governor or board may not adopt such an order if it
38-19 would result in an allocation of money between particular programs
38-20 or statutory allotments under the foundation school program
38-21 contrary to the statutory proration formula provided by Section
38-22 42.253(i) [42.253(h)], Education Code. The governor or board may
38-23 transfer an amount to the total amount appropriated to finance the
38-24 foundation school program for a fiscal year and may increase the
38-25 basic allotment. The governor or board may adjust allocations of
38-26 amounts between particular programs or statutory allotments under
38-27 the foundation school program only for the purpose of conforming
39-1 the allocations to actual student [pupil] enrollments or
39-2 attendance.
39-3 ARTICLE 4. REPEALER; TRANSITION; EFFECTIVE DATE
39-4 SECTION 4.01. The following are repealed:
39-5 (1) Article 3.50-4, Insurance Code;
39-6 (2) Article 3.50-4A, Insurance Code, as added by
39-7 Chapter 1540, Acts of the 76th Legislature, Regular Session, 1999;
39-8 and
39-9 (3) Article 3.50-4A, Insurance Code, as added by
39-10 Chapter 372, Acts of the 76th Legislature, Regular Session, 1999.
39-11 SECTION 4.02. Section 43.008, Education Code, is repealed.
39-12 SECTION 4.03. (a) The Teacher Retirement System of Texas
39-13 shall transfer all assets and liabilities of the programs provided
39-14 under Article 3.50-4A, Insurance Code, as added by Chapter 1540,
39-15 Acts of the 76th Legislature, Regular Session, 1999, and Article
39-16 3.50-4A, Insurance Code, as added by Chapter 372, Acts of the 76th
39-17 Legislature, Regular Session, 1999, all coverages provided under
39-18 those programs, and all records pertaining to those programs to the
39-19 optional group insurance program provided under Chapter 3A,
39-20 Insurance Code, as added by this Act, not later than the date that
39-21 optional program is implemented.
39-22 (b) The Teacher Retirement System of Texas shall transfer
39-23 all assets and liabilities of the program provided under Article
39-24 3.50-4, Insurance Code, all coverages provided under that program,
39-25 and all records pertaining to that program to the group program
39-26 provided under Chapter 3A, Insurance Code, as added by this Act,
39-27 not later than the date the group program provided under Chapter 3A
40-1 is implemented.
40-2 SECTION 4.04. (a) During the first year of the 2002-2003
40-3 state fiscal biennium, the Teacher Retirement System of Texas shall
40-4 use money appropriated by the 77th Legislature for the development
40-5 of a primary health plan in a manner necessary to ensure that
40-6 enrollment in that plan provided under Chapter 3A, Insurance Code,
40-7 as added by this Act, begins not later than September 1, 2002.
40-8 (b) Not later than December 31, 2001, the Teacher Retirement
40-9 System of Texas shall deliver to the Legislative Budget Board and
40-10 the Governor's Office of Budget and Planning a comprehensive report
40-11 on its proposal for the health plans under Chapter 3A, Insurance
40-12 Code, as added by this Act, and the status of planned
40-13 implementation of those health plans.
40-14 SECTION 4.05. (a) Except as provided by Subsection (b) or
40-15 (c) of this section, this Act takes effect January 1, 2002.
40-16 (b) Except as provided by Subsection (c) of this section,
40-17 Section 4.01 of this Act takes effect September 1, 2002.
40-18 (c) This Act takes effect only if the constitutional
40-19 amendment proposed by the 77th Legislature, Regular Session, 2001,
40-20 relating to the provision of group health benefits for active and
40-21 retired school employees, distributions from the permanent school
40-22 fund, and the school employees primary health coverage fund is
40-23 approved by the voters. If the proposed constitutional amendment
40-24 is not approved by the voters, this Act has no effect.