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78R6032 T

By:  Farabee                                                      H.B. No. 1376



A BILL TO BE ENTITLED

AN ACT

relating to the optional retirement program for certain employees 
of public institutions of higher education.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 830.002, Government Code, is amended by 
adding Subsection (d) to read as follows:
	(d)  The Higher Education Coordinating Board shall establish 
uniform minimum standards comporting with the purpose of Section 
830.001 that a company, or the investments it offers, must meet to 
be eligible to offer a participant in the optional retirement 
program an investment authorized under Subsection (a) or Section 
830.004 but may not otherwise limit the investment that a 
participant may purchase under the program.  Standards established 
under this subsection shall apply uniformly to all mutual fund and 
all fixed annuity investment options.  This subsection shall in no 
way restrict an institution of higher education from adopting 
standards as set forth in Section 830.004(a).
	SECTION 2.  Section 830.004, Government Code, is amended by 
amending Subsection (a) and adding Subsections (c) and (d) to read 
as follows:
	(a)  A governing board may provide for contributions to any 
type of investment authorized by section 403(b) of the Internal 
Revenue Code of 1986 (26 U.S.C. Section 403), as it existed on 
January 1, 1981, and may arrange the purchase of fixed or variable 
retirement annuities that meet the requirements of section 403(b) 
of the Internal Revenue Code of 1986 (26 U.S.C. Section 403) and 
Section 401(g) of the Internal Revenue Code of 1986 (26 U.S.C. 
Section 401).  A governing board may establish minimum standards, 
including minimum participation requirements, that a company, or 
the investments it offers, must meet to be eligible to offer a 
participant in the optional retirement program an investment 
authorized by this subsection or Section 830.002(d) but may not 
otherwise limit the investment that a participant may purchase 
under the program if the investment is authorized by this 
subsection and Section 830.002(d) and qualifies under the 
applicable standards established under this subsection and Section 
830.002(d). [annuity contracts from any insurance or annuity 
company that is qualified to do business in this state.]
	(c)  A governing board shall accept applications from 
companies seeking to obtain approval based on compliance with the 
applicable standards established under Section 830.002(d) and 
Section 830.004(a) and deny or approve the applications at least 
once each year.
	(d)  The Higher Education Coordinating Board may annually 
assess a fee for companies seeking to establish or maintain 
approval of compliance with the provisions of Section 830.002(d).
	SECTION 3.  Section 830.006, Government Code, is amended to 
read as follows: 
	Sec. 830.006  REPORTS FROM INSTITUTIONS.  (a)  The governing 
board of each institution of higher education, other than the Texas 
Higher Education Coordinating Board, shall annually submit a report 
to the Higher Education Coordinating Board that includes 
information concerning the number of participants and eligible 
positions and the amount of contributions.
	(b)  The governing board of each institution required to file 
a report under Subsection (a) shall keep records, make 
certifications, and furnish to the Texas Higher Education 
Coordinating Board information and reports as required by the to 
enable it to carry out its functions under this subtitle.
	SECTION 4.  This Act takes effect September 1, 2003.  
Institutions adopting uniform standards and minimum participation 
requirements must have them implemented by December 31, 2003 or 
must adhere to the rules set forth by the Texas Higher Education 
Coordinating Board.