By Lucio                                              S.B. No. 1010
         77R3592 SMJ-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to loans for the purchase of certain service credit in the
 1-3     Teacher Retirement System of Texas.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subchapter F, Chapter 823, Government Code, is
 1-6     amended by adding Section 823.5015 to read as follows:
 1-7           Sec. 823.5015.  LOAN TO REESTABLISH SERVICE CREDIT. (a)  The
 1-8     board of trustees may make a loan to a member for the purpose of
 1-9     reinstating service credit canceled by membership termination if:
1-10                 (1)  the credit was canceled on or before December 31,
1-11     2000;
1-12                 (2)  the member is eligible to retire under Section
1-13     824.202; and
1-14                 (3)  the member purchases a credit life insurance
1-15     policy for the term of the loan in an amount sufficient to repay
1-16     the loan and designates the retirement system as the beneficiary of
1-17     the policy.
1-18           (b)  The board of trustees shall set an annual rate of
1-19     interest for a loan made under this section at a rate not to exceed
1-20     eight percent.
1-21           (c)  The maximum repayment term for a loan made under this
1-22     section is the fifth anniversary of the date on which the contract
1-23     for the loan is made.
1-24           (d)  A loan made under this section may be used only to
 2-1     reinstate the canceled service credit.
 2-2           (e)  The board of trustees shall adopt rules to implement
 2-3     this section.
 2-4           SECTION 2.  This Act takes effect immediately if it receives
 2-5     a vote of two-thirds of all the members elected to each house, as
 2-6     provided by Section 39, Article III, Texas Constitution.  If this
 2-7     Act does not receive the vote necessary for immediate effect, this
 2-8     Act takes effect September 1, 2001.