78R10991 E
By: Woolley, et al. H.B. No. 752
Substitute the following for H.B. No. 752:
By: Grusendorf C.S.H.B. No. 752
A BILL TO BE ENTITLED
AN ACT
relating to the administration of public retirement systems for
police officers in certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1, Article 6243g-4, Revised Statutes, is
amended to read as follows:
Sec. 1. PURPOSE. The purpose of this article is to restate
and amend the provisions of former law creating and governing a
police officers pension system in each city in this state having a
population of 1.5 million or more, according to the most recent
federal decennial census, and to reflect changes agreed to by the
city and the board of trustees of the pension system under Section
27 of this article. The pension system shall continue to operate
regardless of whether the city's population falls below 1.5 million
[permit the consolidation of the terms of certain pension plans].
SECTION 2. Section 2, Article 6243g-4, Revised Statutes, is
amended by amending Subdivisions (1), (2), (7), (11), (14), and
(23), adding Subdivisions (4-a), (14-a), and (22-a), and
renumbering Subdivision (19) as Subdivision (17-a) to read as
follows:
(1) "Active member" means a person employed as [an
employee who holds] a classified police officer by the [position in
a] police department of a city subject to this article, except for a
person [an employee] who is a part-time, seasonal, or temporary
employee or a person who elected to remain a member of a pension
system described by Chapter 88, Acts of the 77th Legislature,
Regular Session, 2001 (Article 6243h, Vernon's Texas Civil
Statutes). The term does not include a person who is a member of
another pension system of the same city, except to the extent
provided by Section 15(j) or 18 of this article.
(2) "Average total direct pay" means an amount
determined by dividing the following sum by 12:
(A) the highest biweekly pay received by a member
for any single pay period in the last 26 pay periods in which the
member worked full-time, considering only items of total direct pay
that are included in each paycheck, multiplied by 26; plus
(B) the total direct pay, excluding all items of
the type included in Paragraph (A) received during the same last 26
biweekly pay periods [a member's total direct pay for the 26 pay
periods immediately preceding the date of separation from service
or the date of entry into DROP, if earlier, divided by 12].
(4-a) "Catastrophic injury" means a sudden, violent,
life-threatening, duty-related injury sustained by an active
member that is due to an externally caused motor vehicle accident,
gunshot wound, aggravated assault, or other external event or
events and results, as supported by evidence, in one of the
following conditions:
(A) loss of sight in one or both eyes;
(B) loss of one or both feet at or above the
ankle;
(C) loss of one or both hands at or above the
wrist;
(D) injury to the spine that results in permanent
and complete paralysis of both arms, both legs, or one arm and one
leg; or
(E) an externally caused physical traumatic
injury to the brain rendering the member physically or mentally
unable to perform the member's duties as a police officer.
(7) "Dependent child" means a deceased member's
unmarried natural or adopted child who:
(A) has not attained age 18;
(B) has attained age 18 but not age 24 [22] and is
attending school on a full-time basis; or
(C) has attained age 18 and is permanently
disabled as the result of a disability that began before the child
attained age 18.
(11) "Former member" means a person who was once an
active member, vested or not, but who [has] terminated active
member status and received a refund of member contributions.
(14) "Member" means [includes] an active member,
inactive member, or retired member, as the context may require. The
term[, but] does not include a former member.
(14-a) "Normal retirement age" means the earlier of:
(A) the age at which the member attains 20 years
of service; or
(B) the age at which the member first attains
both the age of at least 60 and at least 10 years of service.
(17-a) [(19)] "Retired member" means a member who has
separated from service and who is eligible to receive an immediate
service or disability pension under this article.
(22-a) "Survivor" means a surviving spouse, a
dependent child, or a dependent parent.
(23) "Total direct pay" means wages as defined by
Section 3401(a) of the code, plus any amounts that are not included
in gross income by reason of workers' compensation claims under
Section 104(a)(1), 125, 402(g)(2), or 457 of the code, [and] member
contributions picked up pursuant to Section 414(h)(2) of the code,
and any portion of a motorcycle allowance that is not considered
wages, less any pay received for overtime work. The term does not
include nontaxable payments not expressly described by this
subdivision. However, the compensation included in applying the
limits under Sections 26(c) and (d) of this article shall include
overtime pay and exclude any amount that is excluded from gross
income under Section 104(a)(1) of the code and the portion of any
motorcycle allowance that is excluded from gross income by any
other provision of the code not mentioned in this subdivision.
SECTION 3. Section 3, Article 6243g-4, Revised Statutes, is
amended by amending Subsections (a)-(d), (f), and (g) and adding
Subsection (h) to read as follows:
(a) The board of trustees of the pension system that was
created under Chapter 76, Acts of the 50th Legislature, Regular
Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes), and
that operates under Section 67, Article XVI, Texas Constitution,
continues to be responsible for the general administration,
management, and operation of the pension system, including the
direction of investment and oversight of the fund's assets.
(b) The board is composed of seven members as follows:
(1) the administrative head of the city or the
administrative head's authorized representative;
(2) three employees of the police department having
membership in the pension system, [and] elected by the active,
inactive, and retired members of the pension system [in the manner
determined at a one-time election held for the pension system
before October 1, 1999];
(3) two retired members[, elected in the manner
determined at a one-time election held for the pension system
before October 1, 1999,] who are receiving pensions from the system
and are not officers or employees of the city, elected by the
active, inactive, and retired members of the pension system; and
(4) the treasurer of the city or the person
discharging the duties of the city treasurer.
(c) The terms of office of the board members elected as
described by Subsection (b)(2) of this section shall be three
years, beginning on January 1 and ending on December 31, with one
board member being elected every year at an election called by the
board and held in December. If a vacancy occurs among the three
elected active board members, the board shall hold an election
within 60 days after the date the vacancy occurred. At that
election, an active member shall be elected to serve for the
remainder of the term of the vacant position or for a full term if
the term of the board member that caused the vacancy would have
ended in that year.
(d) The terms of office of the board members elected as
described by Subsection (b)(3) of this section shall be three
years, beginning on January 1 and ending on December 31. Beginning
in 1999, and each third succeeding year, one board member shall be
elected at an election called by the board and held in December.
Beginning in 2000, and each third succeeding year, a second board
member shall be elected at an election called by the board and held
in December. If a vacancy occurs among the two elected retired
members of the board, the board shall hold an election within 60
days after the date the vacancy occurred. At that election, a
retired member shall be elected to serve for the remainder of the
term of the vacant position or for a full term if the term of the
board member that caused the vacancy would have ended in that year.
A board member who is a retired member and who was appointed to the
board before January 1999 shall serve the remainder of the board
member's term. On expiration of the appointed term, the appointed
board member is eligible to run for the board position described by
Subsection (b)(3) of this section in the same manner as any other
retired member.
(f) An individual who is [If it is so determined at a
one-time election held for the pension system before October 1,
1999,] an officer or employee of any employee organization or
retiree organization or an employee of the pension system is
prohibited from being elected to the board, appointed to the board,
or in any other way serving as [becoming] a member of the board.
(g) Each board member shall, within 30 days after taking
office [the date of appointment or election], take an oath of
office:
(1) to diligently and honestly administer the affairs
of the pension system by:
(A) being loyal exclusively to all members;
(B) being prudent in protecting and managing the
trust's property;
(C) defending the trust's assets; and
(D) acting under the terms of the plan; and
(2) to not knowingly violate, or willingly permit to
be violated, this article.
(h) Notwithstanding any other provision in this section, if
a candidate for an elected trustee position is unopposed in an
election, the election may not be held for that position. The board
shall certify the candidate as elected to the board on the executive
director's certification that the candidate is eligible to be a
trustee under this section and is unopposed for election. The
certified candidate shall take the oath of office as soon as
practicable in January, after being declared elected in December.
SECTION 4. Section 4(a), Article 6243g-4, Revised Statutes,
is amended to read as follows:
(a) Elected members of the board who are employees of the
city's police department are entitled to leave from their employer
to attend to the official business of the pension system and are not
required to report to the city or any other governmental entity
regarding travel or the official business of the pension system,
except when on city business.
SECTION 5. Section 5, Article 6243g-4, Revised Statutes, is
amended by amending Subsection (d) and adding Subsection (b-1) to
read as follows:
(b-1) The board may hire an executive director. The
executive director, acting under the direction of the board, shall
handle the operations of the plan and shall perform other duties as
the board may assign. The executive director shall also serve as
the plan administrator for purposes of complying with Subchapter A,
Chapter 804, Government Code.
(d) The board may employ one or more actuaries, legal
counsel, accountants, or other professionals [an actuary, legal
counsel, an accountant, or another professional] and pay the
compensation for these services from the fund.
SECTION 6. Section 6, Article 6243g-4, Revised Statutes, is
amended by adding Subsections (e-1), (g), and (h) and amending
Subsection (f) to read as follows:
(e-1) The board may sue on behalf of the pension system in
any court with proper subject matter jurisdiction regardless of
location. The board has sole authority to litigate matters on
behalf of the pension system.
(f) The board has full discretion and authority to
administer the pension system, to construe and interpret this
article, to correct any defect or omission, to reconcile any
inconsistency that appears in this article, and to do all other acts
necessary to carry out the purpose of this article in a manner and
to the extent that the board considers expedient to administer this
article for the greatest benefit of all members. All decisions of
the board are final and binding on all affected parties.
(g) The board, if reasonably necessary in the course of
performing a board function, may subpoena a witness or the
production of a book, record, or other document. The presiding
officer of the board may issue, in the name of the board, a subpoena
only if a majority of the board approves. The presiding officer of
the board, or the presiding officer's designee, shall administer an
oath to each witness. A peace officer shall serve a subpoena issued
by the board. If the person to whom a subpoena is directed fails to
comply, the board may bring suit to enforce the subpoena in a
district court of the county in which the person resides or in the
county in which the book, record, or other document is located. If
the district court finds that good cause exists for issuance of the
subpoena, the court shall order compliance. The district court may
modify the requirements of a subpoena that the court finds are
unreasonable. Failure to obey the order of the district court is
punishable as contempt.
(h) The board is not subject to Title 6, Property Code.
SECTION 7. Sections 7(d) and (f), Article 6243g-4, Revised
Statutes, are amended to read as follows:
(d) On the date the board makes a declaration under
Subsection (c) of this section, the board shall call a special
election to be held not earlier than the 20th or later than the 60th
[30th] day after that date to fill the vacancy for the unexpired
term of the person who was removed. The person who was removed is
not eligible to run in the special election but is eligible to run
in all subsequent board elections.
(f) The hearing must begin as soon as the hearing examiner
can be scheduled but not later than the 60th day after the date the
board votes to remove the board member. In a hearing conducted
under this subsection, the hearing examiner may issue subpoenas.
The parties may agree to an expedited hearing procedure. Unless
otherwise agreed by the parties, in an expedited procedure, the
hearing examiner must issue a decision not later than the 10th day
after the date the hearing ends. Unless operating under an
expedited hearing procedure, the hearing examiner shall make a
reasonable effort to issue a decision not later than the 30th day
after the date the hearing ends. The hearing examiner's inability
to meet the time requirements imposed by this subsection does not
affect the hearing examiner's jurisdiction or final decision. The
final decision of the hearing examiner may be either to remove the
board member or not to remove the board member from the board. [A
decision may be made to remove the board member from the board only
if the hearing examiner determines that the board member violated
Subchapter A, Chapter 121, Property Code.] The hearing examiner's
fees and expenses shall be paid by the pension system. The costs of
a witness shall be paid by the party who calls the witness.
SECTION 8. Section 8(a), Article 6243g-4, Revised Statutes,
is amended to read as follows:
(a) Each active member of the pension system shall pay into
the system each month 8 3/4 percent of the member's total direct
pay. The payments shall be deducted by the city from the salary of
each active member each payroll period [monthly] and paid to the
pension system. Except for the repayment of withdrawn
contributions under Section 17(f) or 18(c)(3) of this article and
rollovers permitted by Section 17(h) of this article, a person may
not be required or permitted to make any payments into the pension
system after the person separates from service.
SECTION 9. The heading to Section 9, Article 6243g-4,
Revised Statutes, is amended to read as follows:
Sec. 9. CONTRIBUTIONS [MONTHLY PAYMENT] BY THE CITY.
SECTION 10. Section 9(a), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(a) The city shall make substantially equal contributions
to the fund as soon as administratively feasible after each payroll
period. For each fiscal year ending after June 30, 2005, the city's
minimum contribution shall be the greater of 16 percent of the
members' total direct pay or the level percentage of salary payment
required to amortize the unfunded actuarial liability over a
constant period of 30 years computed on the basis of an acceptable
actuarial reserve funding method approved by the board. However,
for the fiscal year ending June 30, 2002, the city's contribution
shall be $32,645,000, for the fiscal year ending June 30, 2003, the
city's contribution shall be $34,645,000, for the fiscal year
ending June 30, 2004, the city's contribution shall be $36,645,000,
and for the fiscal year ending June 30, 2005, the city's
contribution shall be 16 percent of the members' total direct pay.
[For fiscal years ending before June 30, 2002, the city shall make
contributions to the fund after each payroll period in an amount
previously agreed to by the city and the board. For the fiscal year
ending June 30, 2002, the city's contribution rate shall be
composed of the normal cost plus the level percentage of salary
payment required to amortize the actuarial liability over a period
of 40 years from January 1, 1983, computed on the basis of an
acceptable actuarial reserve funding method approved by the board.
For each fiscal year ending after June 30, 2002, the city's
contribution shall be the sum of (1) an amount computed in the
manner provided for the contribution for the fiscal year ending
June 30, 2002, plus (2) $2 million multiplied by the number of
fiscal years that have ended since June 30, 2002, but not more than
16 percent of the aggregate total direct pay of all active members
for the fiscal year. If the amount described by (1) in the
preceding sentence is greater than 16 percent of the aggregate
total direct pay of all active members for the year, the amount
described by (1) shall be contributed.]
SECTION 11. Section 11(a), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(a) A member who returns to service after an interruption in
service is entitled to credit for the previous service to the extent
provided by Section 19 of this article. [In addition, a member who
is retiring shall receive one-half day of service for each day for
which the city is required to make contributions with respect to the
member's unused sick leave, vacation pay, or accumulated overtime
under Section 9(b) of this article, except to the extent that the
member elects to have the amounts credited to the member's DROP
account. Under no circumstances may payments for the same days of
unused sick leave, vacation pay, or accumulated overtime be used to
both increase a member's service and credit the member's DROP
account.]
SECTION 12. Section 12, Article 6243g-4, Revised Statutes,
is amended by amending Subsections (a), (b), (d), (f), and (g) and
adding Subsections (h) and (i) to read as follows:
(a) A member who separates from service after earning 20 or
more years of service is eligible to receive a monthly service
pension, beginning in the month of separation from service. A
member who separates from service with the city after November 23,
1998, after earning 10 or more but less than 20 years of service in
any of the city's pension systems and who complies with all
applicable requirements of Section 19 of this article is eligible
to receive a monthly service pension, beginning in the month the
individual attains 60 years of age. An individual may not receive a
pension under this article while still an active member, except as
provided by Subsection (f) of this section. All service pensions
end with the month in which the retired member dies. The city shall
supply all personnel, financial, and payroll records necessary to
establish the member's eligibility for a benefit, the member's
credited service, and the amount of the benefit. The city must
provide those records in the format specified by the pension
system.
(b) Except as otherwise provided by this section, the
monthly service pension of a member that becomes due after May 1,
2001 [who separates from service after November 23, 1998], is equal
to 2.75 [2.5] percent of the member's average total direct pay or,
if the member retired before November 24, 1998, 2.75 percent of the
member's base salary, for each of the member's first 20 years of
service, plus an additional two percent of the member's average
total direct pay for each of the member's subsequent years of
service, computed to the nearest one-twelfth of a year. A member
who separates from service after November 23, 1998, including a
member who was a DROP participant, and begins to receive a monthly
service pension shall also receive a one-time lump-sum payment of
$5,000 at the same time the first monthly pension payment is made.
The lump-sum payment under this subsection is not available to a
member who has previously received a $5,000 payment under this
section or Section 16 of this article.
(d) A retired member who receives a service pension under
this article is entitled to receive an additional amount each month
equal to $150 [$88.05], beginning on the later of the date the
retired member's pension begins or the date the first monthly
payment becomes due after June 18, 2001, and continuing until the
end of the month in which the retired member dies. This amount is
intended to defray the retired member's group medical insurance
costs and will be paid directly by the fund to the retired member
for the retired member's lifetime.
(f) Notwithstanding anything to the contrary in this
article, an active or inactive member who is eligible to
participate in the executive official pension plan established by
Chapter 358, Acts of the 48th Legislature, Regular Session, 1943
(Article 6243g, Vernon's Texas Civil Statutes), or a successor
statute, may, while continuing employment with the police
department, participate in the executive official pension plan and
elect:
(1) if an active member:
(A) to begin receiving an immediate pension
benefit and be considered a retired member eligible for all rights
and privileges afforded any other retired member under this
article, if the member has 20 years or more of service and is
eligible for retirement under this section except for the
continuing employment; or
(B) to enter DROP if the member satisfies all
requirements of this article for DROP membership; or
(2) if an inactive member, to begin receiving an
immediate pension benefit equal to 2.75 [2.5] percent of the
member's average total direct pay at the time the member became
inactive for the member's first 20 years of service and be entitled
to all rights and privileges afforded a retired member under this
article.
(g) Notwithstanding anything to the contrary in this
article, service pensions that began before May 1, 2001 [September
1, 1999], shall continue to be paid in accordance with applicable
prior law, subject only to the adjustments that are specifically
provided by this section.
(h) Average total direct pay for a member who retires after
participating in a phase-down program in which the member receives
a periodic payment that is generated from the member's accumulated
sick time, vacation time, and overtime balances shall be based on
the highest pay period, excluding any pay for overtime work, in the
periods during which the member worked full-time before
participating in the phase-down program.
(i) The computation of average total direct pay shall be
made in accordance with procedures and policies adopted by the
board.
SECTION 13. Section 14, Article 6243g-4, Revised Statutes,
is amended by amending Subsections (b)-(g), (j), and (l) and adding
Subsections (f-1) and (m) to read as follows:
(b) An active member who has at least 20 years of service
with the police department may file with the pension system an
[irrevocable] election to participate in DROP and receive a DROP
benefit instead of the standard form of pension provided by this
article. The election may be made, under procedures established by
the board, by an active member who has attained the required years
of service. A DROP election that is made and accepted by the board
may not be revoked before the member's separation from service.
(c) The monthly service pension and death benefits of an
active member who becomes a DROP participant will be determined as
if the active member had separated from service and begun receiving
a pension on the effective date of the DROP election. The active
member does not retire but does not accrue additional service
credit beginning on the effective date of the election, and
increases in pay that occur on or after that date may not be used in
computing the active member's monthly service pension, except as
provided by Subsection (l) of this section, but cost-of-living
adjustments that occur on or after that date and that otherwise
would be applicable to the pension will be made.
(d) The member's DROP benefit is determined as provided by
this subsection and Subsection (e) of this section. Each month an
amount equal to the monthly service pension the active member would
have been entitled to receive if the active member had separated
from service on the effective date of entry into DROP, less any
amount that is intended to help defray the active member's group
medical insurance costs as described by Section 12(d) of this
article, shall be credited to a notional DROP account for the active
member, and each month an amount equal to the monthly contributions
the active member makes to the fund on and after the effective date
of entry into DROP also shall be credited to the same notional DROP
account. In any year in which a 13th payment is made to retired
members under Section 12(e) of this article, an amount equal to the
amount of the 13th payment that would have been made to the DROP
participant if the DROP participant had retired on the date of DROP
entry will be credited to the DROP account. [In addition, any
amount that is contributed by the city under Section 9(b) of this
article with respect to the active member's unused sick leave,
vacation pay, or accumulated overtime, and that is not required to
be used to provide 10 or 20 years of service to the member under
Section 11 of this article or used to repay withdrawn contributions
under Section 18(c) of this article shall be credited to the DROP
account as of the end of the month in which it is contributed.]
(e) As of the end of each month an amount is credited to each
active member's notional DROP account at the rate of one-twelfth of
a hypothetical earnings rate on amounts in the account. The
hypothetical earnings rate is determined for each calendar year
based on the average of the aggregate annual rate of return on
investments of the pension system for the five consecutive fiscal
years ending June 30 preceding the calendar year to which the
earnings rate applies. The rate may not be less than zero. [The
board may lower any future rate below the rate otherwise prescribed
by this subsection to the extent necessary to ensure that the DROP
does not adversely affect the financial condition of the fund.]
(f) At the time of a DROP participant's separation from
service, the DROP participant or, if separation from service was
due to the DROP participant's death, the person entitled to receive
benefits under Sections 16 and 16A of this article shall be afforded
a one-time election to revoke the DROP election and substitute
either the annuity that would have been paid if the member had never
elected DROP or an annuity and notional DROP account equal to the
annuity and notional DROP account that would have been received if
the member had entered DROP on a date elected by the member or
survivor. The date elected by the member or survivor may not be
earlier than the earliest date the member could have elected to
enter DROP or later than the date of the member's death or other
separation from service. The computation of the value of the
annuity and DROP account of a member or survivor who makes a Back
DROP election shall be subject to the policies and procedures
adopted by the board. For purposes of this subsection, "Back DROP"
means the option to make this one-time election [If a DROP
participant separates from service because of disability or death,
the member or the member's spouse or, if there is no eligible
spouse, any other person eligible to receive benefits under Section
16 of this article, as applicable, may either receive an amount
equal to the member's DROP account or revoke the member's DROP
election and elect to receive benefits as provided by this article
without regard to this section. A revocation and election under
this subsection must be made at the time and in the manner provided
in a procedure that the board may adopt from time to time.
Alternatively, the retired member, a deceased member's spouse, or,
if there is no spouse, the person entitled to receive benefits under
Section 16 of this article may elect to receive a distribution that
is equal to the member's DROP account and benefits as described by
Subsection (c) of this section].
(f-1) If a DROP participant separates from service due to
death and the person entitled to receive benefits under Sections 16
and 16A of this article does not revoke the DROP election, the DROP
benefit may be received in the form of an additional annuity over
the life expectancy of the surviving spouse.
(g) In lieu of receiving a lump-sum DROP benefit on
separation from service, a retired member who has been a DROP
participant or, if separation from service was due to the DROP
participant's death, the surviving spouse may leave the retired
member's DROP account with the pension system, in which case
interest will be credited to the DROP account in the manner
described by Subsection (e) of this section [this subsection].
[The interest credited for any month shall be at the applicable
annual interest rate as defined by Section 417(e)(3)(A)(ii)(II) of
the code and published by the Internal Revenue Service for June of
the year preceding the calendar year in which the interest is
credited.]
(j) A retired member who is a DROP participant, or a
surviving spouse, may elect to receive distribution of the DROP
account in a one-time lump-sum payment or in any other form of
distribution that is approved by the board and satisfies the
requirements of Section 401(a)(9) of the code. [Distributions to a
deceased member's survivors, as described by Subsection (f) of this
section, shall be made in a lump sum as soon as administratively
feasible after the deceased member's death.]
(l) The DROP account of each DROP participant who was an
active member on May 1, 2001, shall be recomputed and adjusted,
effective on that date, to reflect the amount that would have been
credited to the account if the member's pension had been computed
based on 2.75 percent of the member's average total direct pay, or
base pay if applicable, for each of the member's first 20 years of
service. The DROP account adjustment shall also include the
assumed earnings that would have been credited to the account if the
2.75 percent multiplier for the first 20 years of service had been
in effect from the time the member became a DROP participant [If
DROP causes any unanticipated actuarial costs, the board may take
action as necessary to mitigate the unanticipated actuarial cost,
including discontinuing acceptance of additional elections to
participate in the DROP, but the pension system shall continue to
administer DROP for the members participating before the date of
discontinuance of enrollment].
(m) The DROP monthly service pension, as described by
Subsection (c) of this section, of each DROP participant who
retires after May 1, 2001, shall be recomputed as of the date of
retirement, based on the DROP participant's average total direct
pay at the time of retirement and changes to the benefit formula in
Section 12(b) of this article that have occurred since the member's
DROP entry date. If this recomputation would result in a greater
monthly service pension, as described by Subsection (c) of this
section, the DROP participant's monthly service pension shall be
adjusted to the greater amount.
SECTION 14. Section 15, Article 6243g-4, Revised Statutes,
is amended by amending Subsections (a)-(d) and adding Subsections
(h)-(k) to read as follows:
(a) An active member who becomes totally and permanently
incapacitated for the performance of the member's duties as a
result of a bodily injury received in, or illness caused by, the
performance of those duties shall, on presentation to the board of
proof of total and permanent incapacity, be retired and shall
receive an immediate duty-connected disability pension equal to the
greater of 55 [50] percent of the member's average total direct pay
at the time of retirement or the member's accrued service pension.
If the injury or illness involves a traumatic event that directly
causes an immediate cardiovascular condition resulting in a total
disability, the member is eligible for a duty-connected disability
pension. A disability pension granted by the board shall be paid to
the member for the remainder of the member's life or for as long as
the incapacity remains. If a member is a DROP participant at the
commencement of the member's disability, the member shall have the
option of receiving the DROP balance in any manner that is approved
by the board and that satisfies the requirements of Section
401(a)(9) of the code and Treasury Regulation Section 1.104-1(b)
(26 C.F.R. Section 1.104-1) and is otherwise available to any other
member under this article.
(b) A member with 10 years or more of credited service who
becomes totally and permanently incapacitated for the performance
of the member's duties and is not eligible for either an immediate
service pension or a duty-connected disability pension is eligible
for an immediate monthly pension computed in the same manner as a
service retirement pension but based on average total direct pay
and service accrued to the date of the disability. The pension
under this subsection may not be less than 27.5 percent of the
member's average total direct pay.
(c) A member who becomes entitled to receive a disability
pension after November 23, 1998, is entitled to receive a one-time
lump-sum payment of $5,000 at the same time the first monthly
disability pension payment is made, but only if the member has not
previously received a $5,000 payment under this section or Section
12 of this article. The retired member [person] shall also receive
an additional amount each month equal to $150 [$88.05], beginning
on the later of the date the pension begins or the date the first
monthly payment becomes due after June 18, 2001, and continuing as
long as the disability pension continues, to help defray the cost of
group medical insurance. [A retired member whose disability
pension continues and was in pay status on November 23, 1998, is
entitled to receive a one-time lump-sum payment of $5,000 as soon as
administratively feasible after November 23, 1998. This payment
has no effect on the amount of the retired member's monthly
pension.] For any year in which a 13th payment is made to retired
members under Section 12(e) of this article, a 13th payment,
computed in the same manner, shall also be paid to members who have
retired under this section.
(d) A person may not receive a disability pension unless the
person files with the board an application for a disability pension
not later than 180 days after the date of separation from service,
at which time the board shall have the person examined by a
physician chosen and compensated by the board. The physician shall
make a report and recommendations to the board regarding the extent
of any disability and whether any disability that is diagnosed is a
duty-connected disability. Except as provided by Subsection (j) of
this section, a [A] person may not receive a disability pension for
an injury received or illness incurred after separation from
service.
(h) As soon as administratively feasible after the later of
June 18, 2001, or the date of the member's retirement because of
disability, an additional monthly disability benefit may be
provided to the member. The additional monthly benefit shall be
equal to the difference between the monthly benefit the member is
receiving under Subsection (a) or (b) of this section, whichever is
applicable, and 100 percent of the member's average total direct
pay at the time of retirement because of disability. The additional
benefit will end on the earlier of the fourth anniversary of the
date the benefit is first paid, the end of the last month the member
is engaged in an education or training program approved in
accordance with procedures adopted by the board, or the date the
member is approved to return to active duty. This additional
monthly benefit is not reduced by any DROP account distributions
the member receives unless the member elects to receive the DROP
distributions in the form of an annuity. This additional benefit is
not available to a member who is receiving a disability benefit
under Subsection (j) of this section.
(i) Effective for payments that become due after April 30,
2000, and instead of the disability benefit provided by Subsection
(a), (b), or (h) of this section, a member who suffers a
catastrophic injury shall receive a monthly benefit equal to 100
percent of the member's average total direct pay determined as of
the date of retirement.
(j) A member who transfers from the police department of a
city subject to this article to another department of the same city,
or who separates from service and is rehired in another department,
and who subsequently terminates employment with the city due to a
duty-connected injury incurred while working as a non-police
employee, shall be entitled to receive an immediate proportional
nonduty-connected disability benefit computed in the same manner as
provided by Subsection (b) of this section, but the benefit shall be
based only on service earned as an employee of the police
department. For purposes of this proportional disability benefit
only, the 180-day application filing requirement in Subsection (d)
of this section begins at the time of separation from the department
that employed the member at the time the disability was incurred. A
person may not receive a disability pension for an injury incurred
after termination from service with the city or for a nonduty
disability incurred after separation from service with the police
department. This proportional nonduty-connected disability
benefit is not available to a person who is already receiving a
service retirement pension or disability pension under this
article.
(k) A benefit payment that becomes due under this section is
effective on the later of the first day the disabled member leaves
the payroll of the city or the date the member signs the application
for a disability pension.
SECTION 15. Sections 16(a), (c), and (f)-(h), Article
6243g-4, Revised Statutes, are amended to read as follows:
(a) For purposes of this article, a marriage is considered
to exist only if the marriage is recorded in the records of the
recorder's office in the county in which the marriage ceremony was
performed. In [or, in] the case of a [declaration of] common-law
marriage, a marriage declaration must be [if the declaration is]
signed by the member and the member's common-law spouse before a
notary public and recorded in the records of the county clerk's
office in the county in which the couple resides at the commencement
of the marriage [filed with the board]. In addition, a marriage
that is evidenced by a declaration of common-law marriage signed
before a notary public after December 31, 1999, may not be treated
as effective earlier than the date on which it was signed before the
notary public.
(c) If a member of the pension system who has not completed
10 years of service in the police department is killed or dies from
any cause growing out of or in consequence of any act clearly not in
the actual performance of the member's official duty, the member's
surviving spouse, dependent child or children, or dependent parent
or parents are entitled to receive an immediate benefit. The
benefit is computed in the same manner as a service retirement
pension but is based on the deceased member's service and average
total direct pay at the time of death. The monthly benefit may not
be less than 27.5 percent of the member's average total direct pay
[only to a refund of the member's contributions to the pension
system].
(f) A surviving spouse who receives a survivor's benefit
under this article is entitled to receive an additional amount each
month equal to $150 [$88.05], beginning with the later of the date
the first payment of the survivor's benefit is due or the date the
first monthly payment becomes due after June 18, 2001, and
continuing until the end of the month in which the surviving spouse
dies.
(g) A [surviving spouse or dependent who was in pay status
on November 23, 1998, is entitled to receive a one-time lump-sum
payment of $5,000 as soon as administratively feasible after
November 23, 1998. The] surviving spouse or dependent who becomes
eligible to receive benefits with respect to an active member who
dies in active service after November 23, 1998, is entitled to
receive a one-time lump-sum payment of $5,000 at the time the first
monthly pension benefit is paid, if the member has not already
received a $5,000 lump-sum payment under Section 12 or 15(c) of this
article. If more than one dependent is eligible to receive a
payment under this subsection, the $5,000 shall be divided equally
among the eligible dependents. This payment has no effect on the
amount of the surviving spouse's or dependents' monthly pension and
may not be paid more than once.
(h) The monthly benefits of surviving spouses or dependents
provided under this section, except the $150 [$88.05] monthly
payments described by Subsection (f) of this section, shall be
increased annually at the same time and by the same percentage as
the pensions of retired members are increased in accordance with
Section 12(c) of this article. Also, for any year in which a 13th
payment is made pursuant to Section 12(e) of this article, a 13th
payment, computed in the same manner, shall also be made to
survivors who are entitled to receive death benefits at that time.
SECTION 16. Article 6243g-4, Revised Statutes, is amended
by adding Section 16A to read as follows:
Sec. 16A. BENEFICIARY DESIGNATION. (a) The provisions of
Section 16 of this article pertaining to rights of survivors do not
apply to an amount held in a member's DROP account. A member who
participates in DROP may designate a beneficiary to receive the
balance of the member's DROP account in the event of the member's
death, as permitted by Section 401(a)(9) of the code and the board's
policies. A member who is married is considered to have designated
the member's spouse as the member's beneficiary unless the spouse
consents, in a notarized writing delivered to the board, to the
designation of another person as beneficiary. If no designated
beneficiary survives the member, the board may pay the balance of
the member's DROP account to the member's beneficiaries in the
following order:
(1) to the member's spouse;
(2) if the member does not have a spouse, to each child
of the member in equal shares;
(3) if the member does not have a spouse or any
children, to each surviving parent of the member in equal shares; or
(4) if the member has no beneficiaries described by
Subdivisions (1), (2), and (3) of this subsection, to the estate of
the member.
(b) If a member names a spouse as a beneficiary and is
subsequently divorced from that spouse, the divorce voids the
designation of the divorced spouse as the member's beneficiary. A
designation of a divorced spouse will cause the board to pay any
balance remaining in the member's DROP account in the order
prescribed by Subsection (a) of this section.
SECTION 17. Section 17(h), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(h) Subject to procedures adopted by the board, the pension
system shall accept a direct cash transfer of funds from another
plan that is an eligible rollover distribution within the meaning
of Section 402(f)(2)(A) of the code. The transfer shall be accepted
only for the purpose of repaying contributions the member has
previously withdrawn or for other purposes expressly authorized by
the board's procedures. [City contributions made under Section 9(b)
of this article based on the unused sick leave, vacation pay, and
accumulated overtime pay of a member who has separated from service
may be applied, at the election of the member seeking a refund, to
pay a refund of member contributions if the contributions are not
used under Section 11(c) of this article to satisfy a service
requirement for retirement.]
SECTION 18. Section 18, Article 6243g-4, Revised Statutes,
is amended by amending Subsections (a) and (b) and adding
Subsection (d) to read as follows:
(a) Except as provided by this section:
(1) [,] credit may not be allowed to any person for
service with any department in the city other than the police
department; and
(2) a [. Except as provided by this section, if a
person is transferred to or from some other department of the city
to or from the police department, the] person's service will be
computed from the date of entry into the service of the police
department until the date of separation from service with the
police department.
(b) Solely for purposes of determining whether a person has
a sufficient number of years of service to receive a retirement
pension or to enter the DROP program, and not for purposes of
determining the amount of the pension or DROP credit, a person who
is employed in any full-time position with the city after June 18,
2001 [November 23, 1998], and has or obtains any credited service
with the pension system after that date, shall receive service
credit for any period of full-time employment with the same city.
However, a person may not receive credit for service with both the
police department and any other department of the city for the same
period.
(d) Classified police officers who were formerly employed
by a city as park police, airport police, or marshals, who were
involuntarily transferred from another city department to the
police department of the city, and who are current active members of
the pension system shall have the option to receive credit with the
pension system for previous service with another pension system of
the city, provided that a person may not receive service credit for
both pension systems for the same period of service.
SECTION 19. Section 20, Article 6243g-4, Revised Statutes,
is amended to read as follows:
Sec. 20. DONATIONS. The pension system may accept gifts
and donations, and the gifts and donations shall be added to the
fund for the use of the pension system, including, but not limited
to, for use for education programs and the related administrative
expenses of the programs.
SECTION 20. Section 22, Article 6243g-4, Revised Statutes,
is amended to read as follows:
Sec. 22. LEGAL ADVICE. The city attorney of the city shall
handle all legal matters for the pension system that are referred by
the board without additional compensation for the service. The
board may, however, as it considers necessary, employ outside legal
counsel to the exclusion of, or to assist, the city attorney and pay
reasonable compensation for the service of the additional legal
counsel from the fund.
SECTION 21. Section 23, Article 6243g-4, Revised Statutes,
is amended to read as follows:
Sec. 23. MEMBERS IN MILITARY SERVICE. (a) A member of the
pension system engaged in active service in a uniformed service may
not be required to make the monthly payments into the fund and may
not lose any previous years' service with the city because of the
uniformed service. The uniformed service shall count as continuous
service in the police department if the member returns to the city
police department after discharge from the uniformed service as an
employee within the period required by the Uniformed Services
Employment and Reemployment Rights Act of 1994 (38 U.S.C. Section
4301 et seq.), as amended, and the uniformed service does not exceed
the period for which a person is entitled to have service counted
pursuant to that Act. Notwithstanding any other provision of this
article, contributions and benefits shall be paid and qualified
service for military service shall be determined in compliance with
Section 414(u) of the code.
(b) The city is required to make its [regular monthly]
payments into the fund on behalf of each member while the member is
engaged in a uniformed service. If a member who has less than 10
years of service in the pension system dies directly or indirectly
as a result of the uniformed service, and without returning to
active service, the spouse, dependent children, dependent parent,
or estate of the member is entitled to receive a benefit [refund] in
the same manner as described by Section 16(c) of this article.
SECTION 22. Sections 25(d) and (e), Article 6243g-4,
Revised Statutes, are amended to read as follows:
(d) The total salary taken into account for any purpose for
any member of the pension system may not exceed $200,000 for any
year for an eligible participant, or for years beginning after 2001
for an ineligible participant, or $150,000 a year before 2001 for an
ineligible participant. These dollar limits shall be adjusted from
time to time in accordance with guidelines provided by the United
States secretary of the treasury. For purposes of this subsection,
an eligible participant is a person who first became an active
member before 1996, and an ineligible participant is a member who is
not an eligible participant.
(e) Accrued benefits under this article become 100 percent
nonforfeitable for a member on the date the member has completed 10
years of service. If the pension system or the fund is terminated
or partially terminated, or city contributions to the fund are
discontinued completely, there may not be a reversion of funds to
the employer. On complete or partial termination or discontinuance
of city contributions, the fund held by the pension system shall be
used exclusively for benefits for members and their surviving
spouses and dependents, and the members' [affected employees']
rights to the benefits, to the extent funded, shall be
nonforfeitable if not already nonforfeitable under this
subsection.
SECTION 23. Article 6243g-4, Revised Statutes, is amended
by adding Section 29 to read as follows:
Sec. 29. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS OR
BENEFICIARIES. (a) Information contained in a record that is in
the custody of a fund established under this article concerning an
individual member, retiree, survivor, or beneficiary is
confidential for purposes of Sections 552.101, 552.102, and
552.117, Government Code. The information may not be disclosed in a
form that identifies a specific individual unless the information
is disclosed to:
(1) the individual;
(2) the individual's attorney, guardian, executor,
administrator, or conservator; or
(3) a person who has written authorization from the
individual to receive the information.
(b) This section does not prevent the disclosure of the
status or identity of an individual as a member, former member,
retiree, deceased member, survivor, beneficiary, or alternate
payee of the system.
SECTION 24. Sections 9(b), 15(f), and 16(d), Article
6243g-4, Revised Statutes, are repealed.
SECTION 25. This Act takes effect September 1, 2003.