79R16322 DLF-F
By: Eiland H.B. No. 2568
Substitute the following for H.B. No. 2568:
By: Flynn C.S.H.B. No. 2568
A BILL TO BE ENTITLED
AN ACT
relating to certain retired school employees and the powers and
duties of the Teacher Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 12.057(b), Education Code, is amended to
read as follows:
(b) An employee of an independent school district who is
employed on a campus or program granted a charter under this
subchapter and [Section 12.052, 12.0521(a)(1), or 12.053] who
qualifies for membership in the Teacher Retirement System of Texas
shall be covered under the system in the same manner and to the same
extent as a qualified employee of the independent school district
who is employed on a regularly operating campus or in a regularly
operating program [is covered].
SECTION 2. Section 12.1057(a), Education Code, is amended
to read as follows:
(a) An employee of an open-enrollment charter school
operating under a charter granted by the State Board of Education
who qualifies for membership in the Teacher Retirement System of
Texas shall be covered under the system to the same extent a
qualified employee of a school district is covered.
SECTION 3. Subchapter D, Chapter 12, Education Code, is
amended by adding Section 12.1164 to read as follows:
Sec. 12.1164. NOTICE TO TEACHER RETIREMENT SYSTEM OF TEXAS.
(a) The commissioner must notify the Teacher Retirement System of
Texas in writing of the revocation, denial of renewal, or surrender
of a charter under this subchapter not later than the 10th business
day after the date of the event.
(b) The commissioner must notify the Teacher Retirement
System of Texas in writing that an open-enrollment charter school
is no longer receiving state funding not later than the 10th
business day after the date on which the funding ceases.
(c) The commissioner must notify the Teacher Retirement
System of Texas in writing that an open-enrollment charter school
has resumed receiving state funds not later than the 10th business
day after the date on which funding resumes.
SECTION 4. Sections 22.004(a), (b), (c), (i), and (j),
Education Code, are amended to read as follows:
(a) A district shall participate in the uniform group
coverage program established under Chapter 1579 [Article 3.50-7],
Insurance Code, as provided by Subchapter D [Section 5] of that
chapter [article].
(b) A district that does not participate in the program
described by Subsection (a) shall make available to its employees
group health coverage provided by a risk pool established by one or
more school districts under Chapter 172, Local Government Code, or
under a policy of insurance or group contract issued by an insurer,
a company subject to Chapter 842, Insurance Code, or a health
maintenance organization under Chapter 843, Insurance Code. The
coverage must meet the substantive coverage requirements of Chapter
1251, Subchapter A, Chapter 1364, and Subchapter A, Chapter 1366
[Article 3.51-6], Insurance Code, and any other law applicable to
group health insurance policies or contracts issued in this state.
The coverage must include major medical treatment but may exclude
experimental procedures. In this subsection, "major medical
treatment" means a medical, surgical, or diagnostic procedure for
illness or injury. The coverage may include managed care or
preventive care and must be comparable to the basic health coverage
provided under Chapter 1551, Insurance Code. The board of trustees
of the Teacher Retirement System of Texas shall adopt rules to
determine whether a school district's group health coverage is
comparable to the basic health coverage specified by this
subsection. The rules must provide for consideration of the
following factors concerning the district's coverage in
determining whether the district's coverage is comparable to the
basic health coverage specified by this subsection:
(1) the deductible amount for service provided inside
and outside of the network;
(2) the coinsurance percentages for service provided
inside and outside of the network;
(3) the maximum amount of coinsurance payments a
covered person is required to pay;
(4) the amount of the copayment for an office visit;
(5) the schedule of benefits and the scope of
coverage;
(6) the lifetime maximum benefit amount; and
(7) verification that the coverage is issued by a
provider licensed to do business in this state by the Texas
Department of Insurance or is provided by a risk pool authorized
under Chapter 172, Local Government Code, or that a district is
capable of covering the assumed liabilities in the case of coverage
provided through district self-insurance.
(c) The cost of the coverage provided under the program
described by Subsection (a) shall be paid by the state, the
district, and the employees in the manner provided by Subchapter F,
Chapter 1579 [Article 3.50-7], Insurance Code. The cost of
coverage provided under a plan adopted under Subsection (b) shall
be shared by the employees and the district using the contributions
by the state described by Subchapter F, Chapter 1579 [Section 9,
Article 3.50-7], Insurance Code, or Subchapter D [by Article
3.50-8, Insurance Code].
(i) Notwithstanding any other provision of this section, a
district participating in the uniform group coverage program
established under Chapter 1579 [Article 3.50-7], Insurance Code,
may not make group health coverage available to its employees under
this section after the date on which the program of coverages
provided under Chapter 1579 [Article 3.50-7], Insurance Code, is
implemented.
(j) This section does not preclude a district that is
participating in the uniform group coverage program established
under Chapter 1579 [Article 3.50-7], Insurance Code, from entering
into contracts to provide optional insurance coverages for the
employees of the district.
SECTION 5. Subchapter A, Chapter 22, Education Code, is
amended by adding Section 22.007 to read as follows:
Sec. 22.007. INCENTIVES FOR EARLY RETIREMENT. A district
may not offer or provide a financial or other incentive to an
employee of the district to encourage the employee to retire from
the Teacher Retirement System of Texas.
SECTION 6. Chapter 22, Education Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. COMPENSATION SUPPLEMENTATION
Sec. 22.101. DEFINITIONS. In this subchapter:
(1) "Cafeteria plan" means a plan as defined and
authorized by Section 125, Internal Revenue Code of 1986.
(2) "Employee" means an active, contributing member of
the Teacher Retirement System of Texas who:
(A) is employed by a district, other educational
district whose employees are members of the Teacher Retirement
System of Texas, participating charter school, or regional
education service center;
(B) is not a retiree eligible for coverage under
the program established under Chapter 1575, Insurance Code;
(C) is not eligible for coverage by a group
insurance program under Chapter 1551 or 1601, Insurance Code; and
(D) is not an individual performing personal
services for a district, other educational district that is a
member of the Teacher Retirement System of Texas, participating
charter school, or regional education service center as an
independent contractor.
(3) "Participating charter school" means an
open-enrollment charter school established under Subchapter D,
Chapter 12, that participates in the program established under
Chapter 1579, Insurance Code.
(4) "Regional education service center" means a
regional education service center established under Chapter 8.
Sec. 22.102. AUTHORITY TO ADOPT RULES; OTHER AUTHORITY.
(a) The agency may adopt rules to implement this subchapter.
(b) The agency may enter into interagency contracts with any
other agency of this state for the purpose of assistance in
implementing this subchapter.
Sec. 22.103. DISTRIBUTION BY AGENCY. Subject to the
availability of funds, each month the agency shall deliver to each
district, including a district that is ineligible for state aid
under Chapter 42, each other educational district that is a member
of the Teacher Retirement System of Texas, each participating
charter school, and each regional education service center state
funds in an amount, as determined by the agency, equal to the
product of the number of employees employed by the district,
school, or service center multiplied by the amount specified in the
General Appropriations Act for purposes of this subchapter and
divided by 12. The agency shall distribute funding to only one
entity for employees who are employed by more than one entity listed
in this section.
Sec. 22.104. FUNDS HELD IN TRUST. All funds received by a
district, other educational district, participating charter
school, or regional education service center under this subchapter
are held in trust for the benefit of the employees on whose behalf
the district, school, or service center received the funds.
Sec. 22.105. RECOVERY OF DISTRIBUTIONS. The agency is
entitled to recover from a district, other educational district,
participating charter school, or regional education service center
any amount distributed under this subchapter to which the district,
school, or service center was not entitled.
Sec. 22.106. DETERMINATION BY AGENCY FINAL. A
determination by the agency under this subchapter is final and may
not be appealed.
Sec. 22.107. DISTRIBUTION BY SCHOOL. Each month, each
district, other educational district that is a member of the
Teacher Retirement System of Texas, participating charter school,
and regional education service center must distribute to its
employees the funding received under this subchapter. To receive
the monthly distribution, an individual must meet the definition of
an employee under Section 22.101 for that month.
Sec. 22.108. USE OF SUPPLEMENTAL COMPENSATION. An employee
may use a monthly distribution received under this subchapter for
any employee benefit, including depositing the amount of the
distribution into a cafeteria plan, if the employee is enrolled in a
cafeteria plan, or using the amount of the distribution for health
care premiums through a premium conversion plan. The employee may
take the amount of the distribution as supplemental compensation.
Sec. 22.109. SUPPLEMENTAL COMPENSATION. An amount
distributed to an employee under this subchapter must be in
addition to the rate of compensation that:
(1) the district, other educational district,
participating charter school, or regional education service center
paid the employee in the preceding school year; or
(2) the district, school, or service center would have
paid the employee in the preceding school year if the employee had
been employed by the district, school, or service center in the same
capacity in the preceding school year.
SECTION 7. Section 821.003, Government Code, is amended to
read as follows:
Sec. 821.003. RETIREMENT SYSTEM. The retirement system is
a public entity [an agency of the state]. Except as provided by
Section 825.304, the Teacher Retirement System of Texas is the name
by which all business of the retirement system shall be transacted,
all its funds invested, and all its cash, securities, and other
property held.
SECTION 8. Section 822.201(c), Government Code, is amended
to read as follows:
(c) Excluded from salary and wages are:
(1) expense payments;
(2) allowances;
(3) payments for unused vacation or sick leave;
(4) maintenance or other nonmonetary compensation;
(5) fringe benefits;
(6) deferred compensation other than as provided by
Subsection (b)(3);
(7) compensation that is not made pursuant to a valid
employment agreement;
(8) payments received by an employee in a school year
that exceed $5,000 for teaching a driver education and traffic
safety course that is conducted outside regular classroom hours;
(9) the benefit replacement pay a person earns as a
result of a payment made under Subchapter B or C, Chapter 661;
(10) any amount [contributions to a health
reimbursement arrangement account] received by an employee under
Subchapter D, Chapter 22, Education Code, former Article 3.50-8,
Insurance Code, former Chapter 1580, Insurance Code, or Rider 9,
page III-39, Chapter 1330, Acts of the 78th Legislature, Regular
Session, 2003 (the General Appropriations Act); and
(11) any compensation not described by Subsection (b).
SECTION 9. Section 823.006, Government Code, is amended to
read as follows:
Sec. 823.006. LIMITS ON ANNUAL CONTRIBUTIONS FOR PURCHASE
OF [PERMISSIVE] SERVICE CREDIT [RESTRICTIONS]. Notwithstanding
any other provision of this subtitle, the retirement system may
limit the purchase of service credit to the extent required by
applicable limits on the amount of annual contributions a
participant may make to a qualified plan under Sections 401(a) and
415(c), Internal Revenue Code of 1986. [(a) In this section:
[(1) "Nonqualified service" means service for which
permissive service credit is authorized by this subtitle, other
than:
[(A) military service; and
[(B) service for any agency or instrumentality of
this state, including a political subdivision of this state, or for
any public school supported by the United States or a state or
territory of the United States, if credit for the service would not
cause a person to receive a retirement benefit for the same service
from more than one retirement system or program.
[(2) "Permissive service credit" means service
credit:
[(A) that is not membership credit authorized to
be reinstated;
[(B) that is recognized under this subtitle for
purposes of computing a member's benefit under the retirement
system;
[(C) for which the member has not received credit
with the retirement system; and
[(D) that a member may receive only by making a
voluntary additional contribution in an amount determined as
provided by this subtitle that does not exceed the amount necessary
to fund the benefit attributable to the service credit.
[(b) The purchase of permissive service credit by a person
who first becomes a member of the retirement system after August 31,
2000, is subject to the restrictions and conditions of Subsection
(d) in addition to all other requirements of this subtitle
applicable to the purchase.
[(c) The purchase by any person of permissive service credit
that was first made available under the retirement system after
December 31, 1997, is subject to the restrictions and conditions of
Subsection (d) in addition to all other requirements of this
subtitle applicable to the purchase.
[(d) Under a circumstance described by Subsection (b) or
(c), a member may not purchase more than five years of permissive
service credit for nonqualified service, and a member may not
purchase service credit for nonqualified service before the member
has at least five years of membership service credit.]
SECTION 10. Sections 823.401(d) and (e), Government Code,
are amended to read as follows:
(d) A member may establish credit under this section by
depositing with the retirement system for each year of service
credit the actuarial present value, at the time of deposit, of the
additional standard retirement annuity benefits that would be
attributable to the purchase of the service credit under this
section, based on rates and tables recommended by the retirement
system's actuary and adopted by the board of trustees [claimed a
contribution computed at the rate of:
[(1) 12 percent of the full-time rate of the member's
annual compensation, plus any additional eligible compensation
received, during the first year of service for which the member
received membership credit in the retirement system that is both
after the service for which credit is sought and after September 1,
1956; or
[(2) 12 percent of the full-time rate of the member's
annual compensation, plus any additional eligible compensation
received, during the most recent year of service for which the
member received membership credit that is after the service for
which credit is sought, if the member has performed no service in
Texas since September 1, 1956].
(e) [In addition to the contribution required by Subsection
(d), a member claiming credit under this section must pay a fee of
eight percent, compounded annually, of the required contribution
from the date of first eligibility to the date of deposit.] A
deposit for at least one year of credit[, including the fee,] must
be made with an initial application for credit, and all payments for
service claimed under this section must be made before retirement.
SECTION 11. Section 824.202, Government Code, is amended by
amending Subsections (a), (b), and (d) and adding Subsections
(a-1), (b-1), and (d-1) to read as follows:
(a) Except as provided by Subsection (a-1), a [A] member is
eligible to retire and receive a standard service retirement
annuity if:
(1) the member is at least 65 years old and has at
least five years of service credit in the retirement system;
(2) the member is at least 60 years old and has at
least 20 years of service credit in the retirement system;
(3) the member is at least 50 years old and has at
least 30 years of service credit in the retirement system; or
(4) the sum of the member's age and amount of service
credit in the retirement system equals the number 80.
(a-1) This subsection applies only to a person who becomes a
member of the retirement system on or after September 1, 2006. A
member subject to this subsection is eligible to retire and receive
a standard service retirement annuity if:
(1) the member is at least 65 years old and has at
least five years of service credit in the retirement system; or
(2) the member is at least 60 years old and has at
least five years of service credit in the retirement system and the
sum of the member's age and amount of service credit in the
retirement system equals the number 80.
(b) This subsection applies only to a person who is not
subject to Subsection (b-1) or (d). If a member subject to this
subsection is at least 55 years old and has at least five years of
service credit in the retirement system, the member is eligible to
retire and receive a service retirement annuity reduced from the
standard service retirement annuity available under Subsection
(a)(1), to a percentage derived from the following table:a percentage of] the
standard service retirement annuity available under Subsection (a)
decreased [(a)(3), derived from the table in Subsection (c). The
board of trustees shall extend the table in Subsection (c) to ages
earlier than 50 years by decreasing the percentages] by two percent
for each year of age under 50 years.
(d-1) This subsection applies only to a person who becomes a
member of the retirement system on or after September 1, 2006. If
the sum of the member's age and amount of service credit in the
retirement system equals the number 80, with at least five years of
service credit, or if the member has at least 30 years of service
credit in the retirement system, the member is eligible to retire
regardless of age and receive a service retirement annuity, reduced
from the standard service retirement annuity available under
Subsection (a)(2), to a percentage derived from the following
table: Age at date of retirement 50 51 52 53 54 55 56 57 58 59 60
Minimum years of service credit required 30 29 28 27 26 25 24 23 22 21 20
Percentage of standard annuity receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
For each year of age under 50 years with 30 years of service
credit, the standard service retirement annuity shall be five
percent less than the percentage for age 50 with 30 years of service
credit.
SECTION 12. Section 824.203(a), Government Code, is amended
to read as follows:
(a) Except as provided by Subsections (c) and [,] (d), [and
(e),] the standard service retirement annuity is an amount computed
on the basis of the member's average annual compensation for the
five [three] years of service, whether or not consecutive, in which
the member received the highest annual compensation, times 2.3
percent for each year of service credit in the retirement system.
SECTION 13. Sections 824.2045(a), (b), (c), and (d),
Government Code, are amended to read as follows:
(a) A member [who is eligible for an unreduced service
retirement annuity and is not participating in the deferred
retirement option plan under Subchapter I] may select a standard
service retirement annuity or an optional service retirement
annuity described by Section 824.204, reduced for early age as
applicable under Section 824.202, together with a partial lump-sum
distribution, if:
(1) the member is eligible for a service retirement
annuity;
(2) the sum of the member's age and amount of service
credit in the retirement system equals the number 90; and
(3) the member is not participating in the deferred
retirement option plan under Subchapter I.
(b) The amount of the lump-sum distribution under this
section may not exceed the sum of 36 months of a standard service
retirement annuity reduced for early age as applicable under
Section 824.202 computed without regard to this section.
(c) The service retirement annuity selected by the member
shall be actuarially reduced to reflect the lump-sum option
selected by the member and shall be actuarially equivalent to a
standard or optional service retirement annuity, as applicable,
reduced for early age as applicable under Section 824.202, without
the partial lump-sum distribution. The annuity and lump sum shall
be computed to result in no actuarial loss to the retirement system.
(d) The retiring member may choose a lump sum equal to 12
months of a standard service retirement annuity and payable at the
same time that the first monthly payment of the annuity is paid, a
lump sum equal to 24 months of a standard annuity and payable in one
or two annual payments, or a lump sum equal to 36 months of a
standard annuity and payable in one, two, or three annual payments.
At the option of the member, a payment under this subsection may be
made as provided by Section 825.509. The amount of the lump sum
shall be computed based on a standard service retirement annuity
reduced for early age as applicable under Section 824.202.
SECTION 14. Section 824.405, Government Code, is amended to
read as follows:
Sec. 824.405. TABLES FOR DETERMINATION OF DEATH BENEFIT
ANNUITY. For the purpose of computing a death benefit annuity under
Section 824.402(a)(4) or 824.403, the board of trustees shall
extend the tables:
(1) in Section 824.202(b) or (b-1), as applicable, to
ages earlier than 55 years by actuarially reducing the benefit
available at the age of 55 years to the actuarial equivalent at the
attained age of the beneficiary; and
(2) in Section 824.202(b) or (d-1), as applicable,
[824.202(c)] to ages earlier than the earliest retirement age by
actuarially reducing the benefit available at the earliest
retirement age to the actuarial equivalent at the attained age of
the beneficiary.
SECTION 15. Section 824.503(d), Government Code, is amended
to read as follows:
(d) A benefit under Subsection (c) is payable to the person
or persons designated as the beneficiary of the beneficiary and, if
such person has not been designated or does not survive, then to the
persons entitled to distribution of the deceased beneficiary's
estate.
SECTION 16. Section 824.602(a), Government Code, is amended
to read as follows:
(a) Subject to Section 825.506, the retirement system may
not, under Section 824.601, withhold a monthly benefit payment if
the retiree is employed in a Texas public educational institution:
(1) as a substitute only with pay not more than the
daily rate of substitute pay established by the employer and, if the
retiree is a disability retiree, the employment has not exceeded a
total of 90 days in the school year;
(2) in a position, other than as a substitute, on no
more than a one-half time basis for the month;
(3) in one or more positions on as much as a full-time
basis, if the work occurs in not more than six months of a school
year that begins after the retiree's effective date of retirement;
(4) in a position, other than as a substitute, on no
more than a one-half time basis for no more than 90 days in the
school year, if the retiree is a disability retiree;
(5) in a position as a classroom teacher on as much as
a full-time basis, if the retiree has retired under Section
824.202(a) or (a-1), is certified under Subchapter B, Chapter 21,
Education Code, to teach the subjects assigned, is teaching in an
acute shortage area as determined by the board of trustees of a
school district as provided by Subsection (m), and has been
separated from service with all public schools for at least 12
months;
(6) in a position as a principal, including as an
assistant principal, on as much as a full-time basis, if the retiree
has retired under Section 824.202(a) or (a-1) without reduction for
retirement at an early age, is certified under Subchapter B,
Chapter 21, Education Code, to serve as a principal, and has been
separated from service with all public schools for at least 12
months; or
(7) as a bus driver for a school district on as much as
a full-time basis, if the retiree has retired under Section
824.202(a) or (a-1), and the retiree's primary employment is as a
bus driver.
SECTION 17. Subchapter G, Chapter 824, Government Code, is
amended by adding Section 824.6022 to read as follows:
Sec. 824.6022. REQUIRED REPORTS; OFFENSE. (a) An employer
shall file a monthly certified statement of employment of a retiree
in the form and manner required by the retirement system.
(b) A person commits an offense if the person is an
administrator of an employer, is responsible for filing a statement
under Subsection (a), and knowingly fails to file the statement as
required.
SECTION 18. Subchapter I, Chapter 824, Government Code, is
amended by adding Section 824.8011 to read as follows:
Sec. 824.8011. DEADLINE TO ELECT TO PARTICIPATE. A person
must make an election to participate in the plan not later than
December 31, 2005.
SECTION 19. Section 824.805(b), Government Code, is amended
to read as follows:
(b) This subsection applies only to a [A] member
participating in the plan on September 1, 2005, or to a member whose
period of participation in the plan expired on or before September
1, 2005, but who has not retired on or before that date. A member
described by this subsection [2001,] may, before December 31, 2005,
revoke the member's decision to participate [2001, elect to
discontinue participation] in the plan on a form prescribed by and
filed with the retirement system. The retirement system shall make
account transfers and change records for a member who revokes the
member's decision to participate [elects under this subsection to
discontinue participation] in the plan as if the member had never
participated in the plan.
SECTION 20. Section 825.101, Government Code, is amended to
read as follows:
Sec. 825.101. GENERAL ADMINISTRATION. The board of
trustees is responsible for the general administration and
operation of the retirement system. Notwithstanding any other law,
the board of trustees has exclusive control over all assets held in
trust by the retirement system and all operations funded by trust
assets and shall administer the retirement system for the sole and
exclusive benefit of the members and participants.
SECTION 21. Section 825.103, Government Code, is amended by
adding Subsections (c), (d), (e), (f), and (g) to read as follows:
(c) Chapter 412, Labor Code, does not apply to the
retirement system. The board of trustees may acquire services
described by that chapter in any manner or amount the board
considers reasonable. The State Office of Risk Management shall
provide services for the retirement system as requested by the
retirement system, and the retirement system may use the services
of the State Office of Risk Management to obtain insurance and
perform risk management and workers' compensation claim services.
The State Office of Risk Management shall pay to the retirement
system any amounts collected on behalf of the system through
subrogation of claims, regardless of the budget biennium in which
the office receives the amounts. The State Office of Risk
Management shall pay these amounts directly to the retirement
system instead of to the general revenue fund.
(d) Notwithstanding any other law, the retirement system
has exclusive authority over the purchase of goods and services
using money other than money appropriated from the general revenue
fund, including specifically money from trusts under the
administration of the retirement system, and Subtitle D, Title 10,
does not apply to the retirement system with respect to that money.
The retirement system shall acquire goods or services by
procurement methods approved by the board of trustees or the
board's designee. For purposes of this subsection, goods and
services include all professional and consulting services and
utilities as well as supplies, materials, equipment, skilled or
unskilled labor, and insurance. The Texas Building and Procurement
Commission shall procure goods or services for the retirement
system at the request of the retirement system, and the retirement
system may use the services of that commission in procuring goods or
services.
(e) Chapters 2054 and 2055 do not apply to the retirement
system. The board of trustees shall control all aspects of
information technology and associated resources relating to the
retirement system, including computer, data management, and
telecommunication operations, procurement of hardware, software,
and middleware, and telecommunication equipment and systems,
location, operation, and replacement of computers, computer
systems, and telecommunication systems, data processing, security,
disaster recovery, and storage. The Department of Information
Resources shall assist the retirement system at the request of the
retirement system, and the retirement system may use any service
that is available through that department.
(f) Subchapter C, Chapter 2260, does not apply to the
retirement system. The acceptance of benefits by the retirement
system under a contract does not waive immunity from suit or
immunity from liability.
(g) Notwithstanding any other law, Chapters 2261 and 2262 do
not apply to the retirement system. The Contract Advisory Team
shall assist the retirement system at the request of the retirement
system. The retirement system may use the training program for
contract management provided under Chapter 2262.
SECTION 22. Section 825.112, Government Code, is amended to
read as follows:
Sec. 825.112. [FIDUCIARY] INSURANCE. Notwithstanding any
other law, the [The] board of trustees may self-insure or purchase
any [liability] insurance, including fiduciary and liability [for
the] coverage for trust assets or for [of] the trustees, employees,
and agents of the board of trustees, [from an insurer licensed to do
business in this state] in [the] amounts the board of trustees
considers reasonable and prudent [necessary. A policy of insurance
purchased under this section may not provide reimbursement for
liability imposed or expenses incurred because of a trustee's,
employee's, or agent's intentional fraud or intentional failure to
act prudently].
SECTION 23. Section 825.115, Government Code, is amended to
read as follows:
Sec. 825.115. APPLICABILITY OF CERTAIN LAWS. (a) Except as
provided by this section, the [The] board of trustees is subject to
the open meetings law, Chapter 551, and the administrative
procedure law, Chapter 2001.
(b) The board of trustees may in its sole discretion make a
final decision on a contested case. Notwithstanding any other law,
the board of trustees may in its sole discretion modify, refuse to
accept, or delete any proposed finding of fact or conclusion of law
contained in a proposal for decision submitted by an administrative
law judge or other hearing examiner, or make alternative findings
of fact and conclusions of law, in a proceeding considered to be a
contested case under Chapter 2001. The board of trustees shall
state in writing the specific reason for its determination and may
adopt rules for the implementation of this subsection. The board of
trustees may delegate its authority under this subsection to the
executive director, and the executive director may delegate the
authority to another employee of the retirement system.
(c) The executive director or the executive director's
designee under Subsection (b) may refer an appeal relating to the
pension plan to the State Office of Administrative Hearings for a
hearing or may employ, select, or contract for the services of an
administrative law judge or hearing examiner not affiliated with
the State Office of Administrative Hearings to conduct a hearing.
This subsection prevails over any other law to the extent of any
conflict.
SECTION 24. Section 825.208, Government Code, is amended to
read as follows:
Sec. 825.208. COMPENSATION OF EMPLOYEES; PAYMENT OF
EXPENSES. (a) Notwithstanding any other law, the [The] board of
trustees shall approve the rate of compensation of all persons it
employs and the amounts necessary for other expenses for operation
of the retirement system. If expenditures are paid from money
appropriated from the general revenue fund rather than from trust
funds, the [The] rates and amounts may not exceed those paid for
similar services for the state.
(b) The retirement system is exempt from Chapter 660 and
Subchapter K, Chapter 659, to the extent the board of trustees
determines an exemption is necessary for the performance of
fiduciary duties.
(c) The board of trustees may compensate employees of the
retirement system, whether subject to or exempt from the overtime
provisions of the Fair Labor Standards Act of 1938 (29 U.S.C.
Section 201 et seq.), at the rate equal to the employees' regular
rate of pay for work performed on a legal holiday or for other
compensatory time accrued, when taking compensatory time off would
be disruptive to the system's normal business functions.
SECTION 25. Section 825.307(a), Government Code, is amended
to read as follows:
(a) The retirement system shall deposit in a member's
individual account in the member savings account:
(1) the amount of contributions to the retirement
system that is deducted from the member's compensation;
(2) the portion of a deposit made on or after
resumption of membership that represents the amount of retirement
benefits received;
(3) the portion of a deposit to reinstate service
credit previously canceled that represents the amount withdrawn or
refunded;
(4) the portion of a deposit to establish military
service credit required by Section 823.302(c);
(5) the portion of a deposit to establish equivalent
membership service credit required by Section 823.401(d),
823.402(e)(1) or (e)(2), or 823.404(c)[, 823.405, or
823.3021(f)(1)]; and
(6) interest earned on money in the account as
provided by Subsections (b) and (c) and Section 825.313(c).
SECTION 26. Section 825.308, Government Code, is amended to
read as follows:
Sec. 825.308. STATE CONTRIBUTION ACCOUNT. The retirement
system shall deposit in the state contribution account:
(1) all state contributions to the retirement system
required by Section 825.404;
(2) amounts from the interest account as provided by
Section 825.313(b)(2);
(3) retirement annuities waived or forfeited in
accordance with Section 824.601 or 824.004;
(4) fees collected under Section 825.403(h);
(5) fees and interest for reinstatement of service
credit or establishment of membership service credit as provided by
Section 823.501;
(6) the portion of a deposit required by Section
823.302 to establish military service credit that represents a fee;
and
(7) employer contributions required under Section
825.4092 [the portion of a deposit required by Section 823.401(e)
to establish out-of-state service credit that represents a fee].
SECTION 27. Section 825.403, Government Code, is amended by
adding Subsections (k) and (l) to read as follows:
(k) Reporting entities and the commissioner of education
shall inform the retirement system of changes in status of a school
district or charter school that affect the reporting
responsibilities of the entity.
(l) The commissioner of education shall notify the
retirement system in writing:
(1) of the revocation, denial of renewal, or surrender
of a charter issued by the State Board of Education, within 10
business days of the date of the event;
(2) that an open-enrollment charter school or other
reporting entity no longer is receiving state funds, within 10
business days of the date on which funding ceases; and
(3) when an open-enrollment charter school or other
reporting entity resumes receiving state funds, within 10 business
days of the date on which funding resumes.
SECTION 28. Subchapter E, Chapter 825, Government Code, is
amended by adding Section 825.4041 to read as follows:
Sec. 825.4041. EMPLOYER PAYMENTS. (a) For purposes of this
section, a new member is a person first employed on or after
September 1, 2005, including a former member who withdrew
retirement contributions under Section 822.003 and is reemployed on
or after September 1, 2005.
(b) During each fiscal year, an employer shall pay an amount
equal to the state contribution rate, as established by the General
Appropriations Act for the fiscal year, applied to the aggregate
compensation of new members of the retirement system, as described
by Subsection (a), during their first 90 days of employment.
(c) On a monthly basis an employer shall:
(1) report to the retirement system, in a form
prescribed by the system, a certification of the total amount of
salary paid during the first 90 days of employment of a new member
and the total amount of employer payments due under this section for
the payroll periods; and
(2) retain information, as determined by the
retirement system, sufficient to allow administration of this
section, including information for each employee showing the
applicable salary as well as aggregate compensation for the first
90 days of employment for new employees.
(d) A person who was hired before September 1, 2005, and was
subject to a 90-day waiting period for membership in the retirement
system becomes eligible to participate in the retirement system as
a member starting September 1, 2005. For the purpose of this
section, the member shall be treated as a new member for the
remainder of the waiting period.
(e) The employer must remit the amount required under this
section to the retirement system at the same time the employer
remits the member's contribution. In computing the amount required
to be remitted, the employer shall include compensation paid to an
employee for the entire pay period that contains the 90th calendar
day of new employment.
(f) At the end of each school year, the retirement system
shall certify to the commissioner of education and to the state
auditor:
(1) the name of each employer that has failed to remit,
within the period required by Section 825.408, all payments
required under this section for the school year; and
(2) the amounts of the unpaid required payments.
(g) If the commissioner of education or the state auditor
receives a certification under Subsection (f), the commissioner or
the state auditor shall direct the comptroller to withhold the
amount certified, plus interest computed at the rate and in the
manner provided by Section 825.408, from the first state money
payable to the employer. The amount withheld shall be deposited to
the credit of the appropriate accounts of the retirement system.
(h) The board of trustees shall take this section into
consideration in adopting the biennial estimate of the amount
necessary to pay the state's contributions to the system.
SECTION 29. Subchapter E, Chapter 825, Government Code, is
amended by adding Section 825.4092 to read as follows:
Sec. 825.4092. EMPLOYER CONTRIBUTIONS FOR EMPLOYED
RETIREES. (a) This section applies to an employer who reports to
the retirement system the employment of a retiree.
(b) Except as provided by Subsection (e), during each
payroll period for which a retiree is reported, the employer shall
contribute to the retirement system for each retiree reported an
amount based on the retiree's salary equal to the sum of:
(1) the current contribution amount that would be
contributed by the retiree if the retiree were an active,
contributing member; and
(2) the current contribution amount authorized by the
General Appropriations Act that the state would contribute for that
retiree if the retiree were an active, contributing member.
(c) Except as provided by Subsection (e), each payroll
period, for each retiree who is enrolled in the Texas Public School
Employees Group Benefits Program under Chapter 1575, Insurance
Code, the employer who reports the employment of a retiree shall
contribute to the trust fund established under that chapter any
difference between the amount the retiree is required to pay for the
retiree and any enrolled dependents to participate in the group
program and the full cost of the retiree's and enrolled dependents'
participation in the group program, as determined by the retirement
system. If more than one employer reports the retiree to the
retirement system during a month, the amount of the required
payment shall be prorated among the employers.
(d) Contributions under this section are subject to the
requirements of Section 825.408.
(e) The amounts required to be paid under Subsections (b)
and (c) are not required to be paid by a reporting employer for a
retiree who was reported by that employer under retirement system
rules in effect for the report month of January 2005.
SECTION 30. Section 2254.102, Government Code, is amended
by adding Subsection (d) to read as follows:
(d) This subchapter does not apply to a contract for legal
services entered into by the Teacher Retirement System of Texas if
the services are paid for from money that is not appropriated from
the general revenue fund, including funds of a trust administered
by the retirement system.
SECTION 31. Sections 825.410(a) and (h), Government Code,
are amended to read as follows:
(a) Payments to establish special service credit as
authorized under this subtitle, other than service credit that may
only be determined and paid for at the time of retirement such as
unused leave as authorized by Section 823.403, [in Sections
805.002, 823.302, 823.304, 823.401, 823.501, and 825.403] may be
made in a lump sum by a monthly payroll deduction in an amount not
less than one-twelfth of the contribution required to establish at
least one year of service credit, or in equal monthly installments
over a period not to exceed the lesser of the number of years of
credit to be purchased or 60 months. Installment and payroll
deduction payments are due on the first day of each calendar month
in the payment period. If an installment or payroll deduction
payment is not made in full within 60 days after the due date, the
retirement system may refund all installment or payroll deduction
payments less fees paid on the lump sum due when installment or
payroll deduction payments began. Partial payment of an
installment or payroll deduction payment may be treated as
nonpayment. A check returned for insufficient funds or a closed
account shall be treated as nonpayment. When two or more
consecutive monthly payments have a returned check, a refund may be
made. If the retirement system refunds payments pursuant to this
subsection, the member is not permitted to use the installment
method of payment or the payroll deduction method, as applicable,
for the same service for three years after the date of the refund. A
member who requests and receives a refund of installment or payroll
deduction payments also is not permitted to use the same method of
payment for the same service for three years after the date of the
refund.
(h) The board of trustees has authority to adopt rules to
implement this section, including rules establishing a minimum
amount for monthly installment or payroll deduction payments and
rules establishing payment under Section 823.004(b).
SECTION 32. Section 825.506, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) It is intended that the retirement system administer the
plan in a manner that satisfies the required minimum distribution
provisions of Section 401(a)(9), Internal Revenue Code of 1986.
The board of trustees may adopt rules to administer the
distribution requirements, including distribution when a
participant dies before the entire interest is distributed.
SECTION 33. Sections 825.507(a) and (b), Government Code,
are amended to read as follows:
(a) Records of a participant that are in the custody of the
retirement system or of an administrator, carrier, attorney,
consultant, or governmental agency acting in cooperation with or on
behalf of the retirement system are confidential and not subject to
public disclosure in a form that would identify an individual and
are exempt from the public access provisions of Chapter 552, except
as otherwise provided by this section. Because the records
described by this subsection are exempt from the public access
provisions of Chapter 552, the retirement system is not required to
accept or comply with a request for a record or information about a
record or to seek an opinion from the attorney general, except as
otherwise provided by this section.
(b) The retirement system may release records of a
participant, including a participant to which Chapter 803 applies,
to:
(1) the participant or the participant's attorney or
guardian or another person who the executive director determines is
acting on behalf of the participant;
(2) the executor or administrator of the deceased
participant's estate, including information relating to the
deceased participant's beneficiary;
(3) a spouse or former spouse of the participant if the
executive director determines that the information is relevant to
the spouse's or former spouse's interest in member accounts,
benefits, or other amounts payable by the retirement system;
(4) an administrator, carrier, consultant, attorney,
or agent acting on behalf of the retirement system;
(5) a governmental entity, an employer, or the
designated agent of an employer, only to the extent the retirement
system needs to share the information to perform the purposes of the
retirement system, as determined by the executive director;
(6) a person authorized by the participant in writing
to receive the information;
(7) a federal, [or] state, or local criminal law
enforcement agency that requests a record for a law enforcement
purpose;
(8) the attorney general to the extent necessary to
enforce child support; or
(9) a party in response to a subpoena issued under
applicable law if the executive director determines that the
participant will have a reasonable opportunity to contest the
subpoena.
SECTION 34. The heading to Section 825.512, Government
Code, is amended to read as follows:
Sec. 825.512. INVESTMENT PRACTICES AND PERFORMANCE REPORTS
[AUDIT].
SECTION 35. Section 825.512(e), Government Code, is amended
to read as follows:
(e) The retirement system shall submit an annual investment
performance report not later than the 45th day after the end of each
fiscal year to the governor, the lieutenant governor, the speaker
of the house of representatives, the executive director of the
State Pension Review Board, the legislative audit committee, the
committees of the senate and the house of representatives having
jurisdiction over appropriations, the committees of the senate and
the house of representatives having principal jurisdiction over
legislation governing the retirement system, and the Legislative
Budget Board. The report shall include a listing of all commissions
and fees paid by the system during the reporting period for the
sale, purchase, or management of system assets. [The report shall
be in a form recommended by the evaluating firm.]
SECTION 36. Subchapter F, Chapter 825, Government Code, is
amended by adding Sections 825.519 and 825.520 to read as follows:
Sec. 825.519. ELECTRONIC INFORMATION. The retirement
system may provide confidential information electronically to
members or other participants or employers and receive information
electronically from those persons, including by use of an
electronic signature or certification in a form acceptable to the
retirement system. An unintentional disclosure to, or unauthorized
access by, a third party related to the transmission or receipt of
information under this section is not a violation by the retirement
system of any law, including a rule relating to the protection of
confidential information.
Sec. 825.520. IMMUNITY FROM LIABILITY. The trustees,
executive director, and employees of the retirement system are not
liable for any action taken or omission made or suffered by them in
good faith in the performance of any duty in connection with any
program or system administered by the retirement system.
SECTION 37. Section 1575.004, Insurance Code, is amended to
read as follows:
Sec. 1575.004. DEFINITION OF RETIREE. (a) In this chapter,
"retiree" means:
(1) an individual not eligible for coverage under a
plan provided under Chapter 1551 or 1601 who:
(A) [is at least 65 years of age and] has taken a
service retirement under the Teacher Retirement System of Texas
after September 1, 2005, with at least 10 years of service credit in
the system, which may include up to five years of military service
credit, but which may not include any other service credit
purchased for equivalent or special service credit, and either:
(i) the sum of the retiree's age and years
of service credit in the retirement system equals or exceeds 80 at
the time of retirement, regardless of whether the retiree had a
reduction in the retirement annuity for early age; or
(ii) the retiree has 30 or more years of
service credit in the retirement system at the time of retirement;
(B) has taken a service retirement under the
Teacher Retirement System of Texas after September 1, 2004, but on
or before August 31, 2005, and on September 1, 2005, either:
(i) [was employed in actual service in
public schools in this state during or before the 2003-2004 school
year and at the time of retirement] meets the requirements for
eligibility for the group program for coverage as a retiree as those
requirements existed on August 31, 2004;
(ii) meets the requirements of Paragraph
(A); or
(iii) is enrolled in the group program and
was enrolled in the group program on August 31, 2005; or
(C) [purchased equivalent or special service
credit, and:
[(i) had that service credited on or before
August 31, 2003;
[(ii) retires on or before August 31, 2009;
[(iii) at the time of retirement, meets the
requirements for eligibility for the group program for coverage as
a retiree as those requirements existed on August 31, 2004,
including using up to five years of out-of-state service toward
retiree eligibility; and
[(iv) has taken a service retirement under
the Teacher Retirement System of Texas without reduction for early
age;
[(D) has taken a service retirement under the
Teacher Retirement System of Texas and who has at least 10 years of
service credit in the system, which may include up to five years of
military service credit but which may not include any other service
credit purchased for equivalent or special service credit, and the
sum of the individual's age and amount of service credit described
by this paragraph equals or exceeds the number 80; or
[(E)] has taken a service retirement under the
Teacher Retirement System of Texas on or before August 31, 2004, and
who is enrolled in the group program on August 31, 2005 [2004]; or
(2) an individual who:
(A) has taken a disability retirement under the
Teacher Retirement System of Texas; and
(B) is entitled to receive monthly benefits from
the Teacher Retirement System of Texas.
(b) [Each year of service credit in the system that an
individual would have received but for the individual's
participation in the deferred retirement option plan under
Subchapter I, Chapter 824, Government Code, is considered a year of
service credit solely for the purpose of meeting the definition of
"retiree" under Subsection (a)(1)(A) or (D).
[(c)] In this section, "public school" has the meaning
assigned by Section 821.001, Government Code.
(c) For purposes of this section, to meet the requirements
for eligibility that existed on August 31, 2004, for a service
retiree, an individual must not have been eligible to be covered by
a plan provided under Chapter 1551 or 1601 and must have taken a
service retirement under the Teacher Retirement System of Texas
with either:
(1) at least 10 years of service credit in the
retirement system for actual service in public schools in this
state; or
(2) at least five years of service credit for actual
service in the public schools in this state and five years of
out-of-state service credit in the Teacher Retirement System of
Texas.
SECTION 38. Subchapter A, Chapter 1575, Insurance Code, is
amended by adding Section 1575.008 to read as follows:
Sec. 1575.008. COVERAGE EXEMPT FROM INSURANCE LAW. A
coverage plan provided under this chapter is exempt from any other
insurance law, including common law, that does not expressly apply
to the plan or this chapter.
SECTION 39. Section 1575.052(b), Insurance Code, is amended
to read as follows:
(b) The trustee may:
(1) study the operation of all group coverage provided
under this chapter; and
(2) contract for advice and counsel in implementing
and administering the group program with [an] independent and
experienced group insurance consultants and actuaries [consultant
or actuary].
SECTION 40. Section 1575.203(a), Insurance Code, is amended
to read as follows:
(a) Each state fiscal year, each active employee shall, as a
condition of employment, contribute to the fund an amount equal to
0.65 [0.5] percent of the employee's salary.
SECTION 41. Section 1575.204, Insurance Code, is amended to
read as follows:
Sec. 1575.204. PUBLIC SCHOOL CONTRIBUTION. (a) Each state
fiscal year, each public school shall contribute to the fund the
amount prescribed by the General Appropriations Act, which may not
be less than 0.25 percent or greater than 0.75 percent of the salary
of each active employee of the public school. The public school
shall make the contributions on a monthly basis and as otherwise
prescribed by the trustee.
(b) Each state fiscal year, each employer who reports to the
retirement system under Section 824.6022, Government Code, the
employment of a retiree who is enrolled in the group program shall
contribute to the fund the difference, if any, between the
contribution amount that the reported retiree is required to pay
for the retiree and any enrolled dependents to participate in the
group program and the full cost of the retiree's and enrolled
dependents' participation in the group program, as determined by
the trustee. The amounts required to be paid under this subsection
are not required to be paid by a reporting employer for a retiree
who was reported by that employer under retirement system rules in
effect for the report month of January 2005.
SECTION 42. Section 1575.303, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) The fund is held in trust for the benefit of
participants of the program and may not be diverted.
SECTION 43. Sections 1576.003 and 1576.004, Insurance Code,
are amended to read as follows:
Sec. 1576.003. CONTRACTS TO PROVIDE COVERAGES
[ADMINISTERING FIRM]. The trustee may contract with one or more
carriers authorized to provide [select an administering firm to
administer the group] long-term care insurance to provide that
coverage [program under contract with the trustee].
Sec. 1576.004. PREMIUMS. (a) The trustee shall determine
the procedures by which each program participant pays
[administering firm shall bill each program participant directly
for] premiums and any other program costs. Each participant is
responsible for required payments.
(b) The trustee may authorize any payment method
appropriate for the program, including a payment method under
which:
(1) a participating employee is required to pay
premiums by payroll deduction remitted by the employee's employer
at the times and in the manner determined by the trustee;
(2) a participating retiree is required to pay
premiums by deduction from the retiree's monthly annuity; or
(3) a carrier with which the trustee has contracted
under Section 1576.003 bills a program participant directly.
SECTION 44. Section 1576.005(a), Insurance Code, is
amended to read as follows:
(a) The group long-term care insurance program is not part
of the group coverages offered under Chapter 1575 or 1579.
SECTION 45. Section 1576.006, Insurance Code, is amended
to read as follows:
Sec. 1576.006. RULES. The trustee may adopt rules as
necessary to administer [implement] this chapter[, including rules
specifying the coverage to be offered under the group long-term
care insurance program].
SECTION 46. Chapter 1576, Insurance Code, is amended by
adding Sections 1576.008, 1576.009, 1576.010, 1576.011, 1576.012,
and 1576.013 to read as follows:
Sec. 1576.008. COMPETITIVE BIDDING REQUIREMENTS; RULES.
(a) A contract to provide benefits under this chapter may be
awarded only through competitive bidding under rules adopted by the
trustee.
(b) The rules may provide criteria for determining whether a
carrier is qualified.
Sec. 1576.009. CONTRACT AWARD; CONSIDERATIONS. (a) In
awarding a contract under this chapter, the trustee is not required
to select the lowest bid and may consider any relevant criteria,
including a bidder's:
(1) ability to service contracts;
(2) past experience; and
(3) financial stability.
(b) If the trustee awards a contract to a bidder whose bid
deviates from that advertised, the trustee shall record the
deviation and fully justify the reason for the deviation in the
minutes of the next meeting of the trustee.
Sec. 1576.010. GROUP LONG-TERM CARE INSURANCE PROGRAM FUND.
(a) The group long-term care insurance program fund is a trust fund
with the comptroller.
(b) The trustee shall administer the fund on behalf of the
participants in the plan of insurance coverage provided under this
chapter.
(c) The following shall be credited to the fund:
(1) money recovered under contracts for providing
insurance coverage under this chapter; and
(2) investment and depository income.
Sec. 1576.011. INVESTMENT OF FUND. The trustee may invest
the fund in the manner provided by Section 67(a)(3), Article XVI,
Texas Constitution.
Sec. 1576.012. PAYMENTS FROM FUND. Money in the fund may be
used only to cover the cost of administering the program and to
provide coverage under this chapter.
Sec. 1576.013. COVERAGE EXEMPT FROM INSURANCE LAW. A
coverage plan provided under this chapter is exempt from any other
insurance law, including common law, that does not expressly apply
to the plan or this chapter.
SECTION 47. Subchapter A, Chapter 1579, Insurance Code, is
amended by adding Sections 1579.005–1579.008 to read as follows:
Sec. 1579.005. CONFIDENTIALITY. (a) Section 825.507,
Government Code, applies to records relating to an employee or
dependent under the program and in the custody of the Teacher
Retirement System of Texas or in the custody of an administrator,
carrier, agent, attorney, consultant, or governmental body acting
in cooperation with or on behalf of the system.
(b) The Teacher Retirement System of Texas may disclose to a
health care provider, benefit provider, or claims administrator
information in the records of an individual that the system
determines is necessary to administer the program.
Sec. 1579.006. EXEMPTION FROM PROCESS. (a) The following
are exempt from execution, attachment, garnishment, or any other
process:
(1) benefit payments, including optional benefit
payments;
(2) contributions of active employees, the state, and
a participating entity, and any other contributions;
(3) any rights, benefits, or payments accruing to any
person under this chapter; and
(4) any money in the fund.
(b) The items listed in Subsection (a) may not be assigned
except for direct payment to benefit providers as authorized by the
trustee by contract, rule, or otherwise.
Sec. 1579.007. EXEMPTION FROM STATE TAXES AND FEES. A
premium or contribution on a policy, insurance contract, or
agreement authorized by this chapter is not subject to any state
tax, regulatory fee, or surcharge, including a premium or
maintenance tax or fee.
Sec. 1579.008. COVERAGE EXEMPT FROM INSURANCE LAW. A
coverage plan provided under this chapter is exempt from any other
insurance law, including common law, that does not expressly apply
to the plan or this chapter.
SECTION 48. Section 1579.052, Insurance Code, is amended by
amending Subsection (c) and adding Subsection (e) to read as
follows:
(c) The trustee may contract with [an] independent and
experienced group insurance consultants and actuaries [consultant
or actuary] for advice and counsel in implementing and
administering the program.
(e) The trustee shall take the actions it considers
necessary to devise, implement, and administer the group program.
SECTION 49. Section 1579.102, Insurance Code, is amended to
read as follows:
Sec. 1579.102. CATASTROPHIC CARE COVERAGE PLAN. The
coverage provided under the catastrophic care coverage plan shall
be prescribed by the trustee by rule and must provide coverage at
least as extensive as the coverage provided under the TRS-Care 1 [2]
plan operated under Chapter 1575.
SECTION 50. (a) Section 1579.104, Insurance Code, is
reenacted and amended to read as follows:
Sec. 1579.104. OPTIONAL COVERAGES. The trustee may not
offer optional coverages, other than optional permanent life
insurance, optional long-term care insurance, and optional
disability insurance [those required by Chapter 1577], to employees
participating in the program. This section does not affect the
right of a participating entity to offer optional coverages to its
employees under terms and conditions established by the
participating entity.
(b) In accordance with Section 311.031(c), Government Code,
which gives effect to a substantive amendment enacted by the same
legislature that codifies the amended statute, the text of Section
1579.104, Insurance Code, as set out in Subsection (a) of this
section, gives effect to changes made by Section 1, Chapter 354,
Acts of the 78th Legislature, Regular Session, 2003.
(c) Section 1, Chapter 354, Acts of the 78th Legislature,
Regular Session, 2003, is repealed.
SECTION 51. Section 1579.253(b), Insurance Code, is amended
to read as follows:
(b) The employee may pay the employee's contribution under
this subsection from the amount distributed to the employee under
Subchapter D, Chapter 22, Education Code [1580].
SECTION 52. Subchapter F, Chapter 1579, Insurance Code, is
amended by adding Sections 1579.254 and 1579.255 to read as
follows:
Sec. 1579.254. CONTRIBUTIONS HELD IN TRUST FOR FUND. A
participating entity:
(1) shall hold contributions required by this
subchapter in trust for the fund and its participants; and
(2) may not divert the contributions for any other
purpose.
Sec. 1579.255. INTEREST ASSESSED ON LATE PAYMENT OF
CONTRIBUTIONS BY PARTICIPATING ENTITIES. (a) A participating
entity that does not remit to the trustee all contributions
required by this subchapter before the seventh day after the last
day of the month shall pay to the fund:
(1) the contributions; and
(2) interest on the unpaid amounts at the annual rate
of six percent compounded monthly.
(b) On request, the trustee may grant a waiver of the
deadline imposed by this section based on a participating entity's
financial or technological resources.
SECTION 53. Section 1581.702, Insurance Code, is amended to
read as follows:
Sec. 1581.702. ADDITIONAL SUPPORT. The state shall provide
additional support for a school district to which this section
applies in an amount computed by multiplying the total amount of
supplemental compensation received by district employees under
Subchapter D, Chapter 22, Education Code, [1580] by 0.062.
SECTION 54. (a) The following laws are repealed:
(1) Section 824.202(c), Government Code;
(2) Section 1575.211(c), Insurance Code;
(3) Chapters 1577 and 1580, Insurance Code;
(4) Section 57, Chapter 201, Acts of the 78th
Legislature, Regular Session, 2003;
(5) Chapter 313, Acts of the 78th Legislature, Regular
Session, 2003; and
(6) Section 1.01, Chapter 366, Acts of the 78th
Legislature, Regular Session, 2003.
(b) Section 823.405, Government Code, is repealed.
SECTION 55. The functions and duties of the Teacher
Retirement System of Texas with respect to the compensation
supplementation program established under Chapter 1580, Insurance
Code, and other applicable law, and any appropriation relating to
that program are transferred to the Texas Education Agency. A
reference in law to the Teacher Retirement System of Texas with
respect to the compensation supplementation program means the Texas
Education Agency.
SECTION 56. (a) Notwithstanding Sections 823.401(d) and
(e), Government Code, as amended by this Act, a member of the
Teacher Retirement System of Texas may establish out-of-state
service credit by making the contribution required under Section
823.401, Government Code, as it existed before amendment by this
Act, if the person was a member of the system on December 31, 2005,
and the out-of-state service was performed before January 1, 2006.
(b) The Teacher Retirement System of Texas shall deposit in
the state contribution account under Section 825.308, Government
Code, the portion of a deposit required under Section 823.401,
Government Code, as it existed before amendment by this Act, to
establish out-of-state service that represents a fee.
SECTION 57. (a) The changes in law made by this Act to
Sections 824.203 and 824.2045, Government Code, and the change in
law made by the repeal of Section 824.202(c), Government Code, by
this Act, apply only to a person who retires under the Teacher
Retirement System of Texas on or after September 1, 2005, unless the
person meets one of the requirements of Subsection (b) of this
section. A person who retires under the Teacher Retirement System
of Texas before September 1, 2005, is governed by the law as it
existed immediately before that date, and that law is continued in
effect for that purpose.
(b) A person who retires under the Teacher Retirement System
of Texas on or after September 1, 2005, and who meets one or more of
the following requirements on or before August 31, 2005, is
governed by the law as it existed immediately before September 1,
2005, and that law is continued in effect for that purpose:
(1) the person has attained age 50;
(2) the sum of the person's age and amount of service
credit in the retirement system equals 70 or greater; or
(3) the person has at least 25 years of service credit
in the retirement system.
(c) Only service actually credited in the retirement system
on or before August 31, 2005, may be used to determine eligibility
under Subsections (b)(2) and (3) of this section. Service credit
that will be established only after completion of additional
payments under an installment agreement after August 31, 2005, may
not be considered to be actually credited for the purpose of
Subsections (b)(2) and (3) of this section.
SECTION 58. Section 824.602, Government Code, as amended by
this Act, applies only to a person who retires from the Teacher
Retirement System of Texas on or after the effective date of this
Act. A person who retires from the Teacher Retirement System of
Texas before the effective date of this Act is governed by the law
as it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 59. The changes in law made by this Act by the
addition of Section 825.4092, Government Code, and the amendment of
Section 1575.204, Insurance Code, apply to a reporting entity that
reports a retiree of the Teacher Retirement System of Texas during
any month after the effective date of this Act.
SECTION 60. Effective September 1, 2005, any money in the
school district employees and retirees optional insurance trust
fund created under Chapter 1577, Insurance Code, as that chapter
existed before being repealed by this Act, is transferred to the
group long-term care insurance program fund established under
Chapter 1576, Insurance Code.
SECTION 61. Unless the agreement is terminated before all
payments are made, the change in law made by this Act does not apply
to an agreement that existed immediately before January 1, 2006,
between an individual and the Teacher Retirement System of Texas
for the purchase in installments of service credit under Section
823.405, Government Code.
SECTION 62. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2005.
(b) The change in law made by this Act to Section
825.307(a), Government Code, takes effect January 1, 2009.
(c) Section 54(b) of this Act takes effect January 1, 2006.