By: McClendon, Menendez, Leibowitz, Chavez H.B. No. 2747
A BILL TO BE ENTITLED
AN ACT
relating to the administration of a retirement health care plan for
firefighters and police officers in certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.02, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended by amending Subdivisions (1), (3), (4),
and (8) and adding Subdivisions (1-a), (6-a)-(6-d), (8-a), and (10)
to read as follows:
(1) "Active member" means a firefighter or a police
officer who is a current contributing member of the fund [who is an
active firefighter or police officer of the municipality].
(1-a) "Actuary" means an actuary selected by the board
to conduct an actuarial study who is a Fellow of the Society of
Actuaries, a Fellow of the Conference of Consulting Actuaries, or a
member of the American Academy of Actuaries.
(3) "Beneficiary" means a retired police officer, a
retired firefighter, or the spouse or other eligible dependent of a
retired or deceased police officer or retired or deceased
firefighter who is entitled to receive retiree health benefits
under Section 5.01(a) of this Act.
(4) "Collective bargaining agreements [agreement]"
means the [a] collectively bargained agreements in effect on
January 1, 2004, [agreement] between a municipality to which this
Act applies and the exclusive bargaining agents of the firefighters
and police officers of the municipality under Chapter 174, Local
Government Code.
(6-a) "Master contract document" means the master
contract in effect on January 1, 2004, containing the terms and
conditions of the health and medical benefits plan established
under the collective bargaining agreements.
(6-b) "Member" means a firefighter or police officer
who has become a member of the fund as provided by Section 4.01 of
this Act and has not retired, died, or forfeited the person's
interest in the fund.
(6-c) "Member payroll" means, for any applicable pay
period, the base pay plus additional compensation for employment
longevity paid to all active members who were active members during
the pay period.
(6-d) "Pension act" means Chapter 824, Acts of the
73rd Legislature, Regular Session, 1993 (Article 6243o, Vernon's
Texas Civil Statutes).
(8) "Retiree" means a member of the fund who was
formerly a firefighter or police officer of the municipality, who
retired after September 30, 1989, and who has a right to retirement
health benefits under Section 5.01(a) of this Act.
(8-a) "Retiree health plan" means the group family
health plan established by the collective bargaining agreements and
the master contract document.
(10) "Years of service" means the number of full years
beginning on the date the firefighter or police officer becomes a
member of the fund until the date the firefighter or police officer
retires or otherwise terminates employment as a firefighter or
police officer less any service credit for the amount of time the
member is engaged in active service with any uniformed service of
the United States that the member does not purchase as provided by
Section 4.022 of this Act.
SECTION 2. Section 1.03, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 1.03. APPLICABILITY. This Act applies to a paid fire
and police department of a municipality with a population of one
million or more but less than 1,175,000, according to the most
recent federal census [of 750,000 or more that has adopted Chapter
174, Local Government Code].
SECTION 3. Section 2.01(b), Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
(b) The board, through its secretary, shall administer the
required elections of the active members and retiree trustees. The
board shall hold a runoff election between the two candidates
receiving the most votes if no candidate receives a majority of the
votes cast for a trustee position. On the executive director's
certification that a candidate for trustee is eligible for office
and is unopposed for election, the board shall certify the
candidate as elected to the board.
SECTION 4. Section 2.03(c), Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
(c) A removal election must be held within 90 [30] days
after the date the board certifies that a proper petition for a
removal election has been signed by at least 20 percent of the
persons eligible to vote to elect the trustee. A trustee's term of
service ends on the entry of an order by the board declaring that a
majority of the votes cast in a removal election under this section
favor removal.
SECTION 5. Section 2.04(b), Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
(b) The board in its discretion may elect other officers of
the board. An officer may be, but is not required to be, a trustee
[treasurer of the municipality is the treasurer of the board].
SECTION 6. Section 3.01, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended by adding Subsections (f)-(k) to read
as follows:
(f) The board has full discretion and authority to
administer the fund, construe and interpret this Act, correct any
defect or omission, reconcile any inconsistency, and perform all
other acts necessary to carry out the purpose of this Act and
administer this Act for the greatest benefit of all members. All
decisions of the board are final and binding on all affected
parties.
(g) A gathering of any number of trustees to investigate,
research, or review prospective or current investments or otherwise
attend to the trustees' fiduciary responsibilities, without formal
action by the trustees, is not a deliberation or meeting under
Chapter 551, Government Code, and is not required to be open to the
public.
(h) The trustees, executive director, and employees of the
fund are immune from liability for any action taken or omission made
in good faith in the performance of their duties for the fund.
(i) Information contained in a record that is in the custody
of the fund concerning a member, former member, retiree, deceased
retiree, beneficiary, or alternate payee is confidential under
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:
(1) to the individual;
(2) to the individual's attorney, guardian, executor,
administrator, or conservator, or to another person the executive
director or the executive director's designee determines from
written documentation to be acting in the interest of the
individual or the individual's estate;
(3) to a person authorized by the individual in
writing to receive the information; or
(4) under a subpoena.
(j) Subsection (i) of this section does not prevent the
disclosure of the status or identity of an individual as a member,
former member, retiree, deceased member, deceased retiree,
beneficiary, or alternate payee of the fund.
(k) A determination and disclosure under Subsection (i) of
this section does not require notice to the member, retiree,
beneficiary, or alternate payee.
SECTION 7. The heading to Article 4, Chapter 1332, Acts of
the 75th Legislature, Regular Session, 1997 (Article 6243q,
Vernon's Texas Civil Statutes), is amended to read as follows:
ARTICLE 4. MEMBERSHIP AND CONTRIBUTIONS
SECTION 8. Section 4.01, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 4.01. MEMBERSHIP. A person becomes a member of the
fund on the person's employment as a firefighter or police officer
in a municipality to which this Act applies [Membership in the fund
shall be determined by the collective bargaining agreements].
SECTION 9. Section 4.02, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 4.02. MEMBER CONTRIBUTIONS. (a) An amount in
accordance with the following schedule shall be deducted from each
active member's compensation and contributed to the fund biweekly:
(1) $36.99 beginning after September 30, 2005, and
ending before October 1, 2006;
(2) $44.32 beginning after September 30, 2006, and
ending before October 1, 2007;
(3) $52.17 beginning after September 30, 2007, and
ending before October 1, 2008;
(4) $60.57 beginning after September 30, 2008, and
ending before October 1, 2009;
(5) $69.54 beginning after September 30, 2009, and
ending before October 1, 2010;
(6) $79.13 beginning after September 30, 2010, and
ending before October 1, 2011;
(7) $89.35 beginning after September 30, 2011, and
ending before October 1, 2012;
(8) $100.26 beginning after September 30, 2012, and
ending before October 1, 2013;
(9) $111.89 beginning after September 30, 2013, and
ending before October 1, 2014;
(10) $124.28 beginning after September 30, 2014, and
ending before October 1, 2015;
(11) $137.46 beginning after September 30, 2015, and
ending before October 1, 2016;
(12) $151.49 beginning after September 30, 2016, and
ending before October 1, 2017;
(13) $166.41 beginning after September 30, 2017, and
ending before October 1, 2018;
(14) $182.26 beginning after September 30, 2018, and
ending before October 1, 2019;
(15) $199.11 beginning after September 30, 2019
[Contributions to the fund shall be determined in accordance with
the collective bargaining agreements].
(b) Subject to Subsection (c) of this section, to be
eligible for health benefits under Section 5.01 of this Act, a
retiree who retired with less than 30 years of service, or the
retiree's surviving spouse in the case of a deceased retiree, shall
continue to make contributions to the fund as required by
Subsection (a) of this section beginning on the date of the
retiree's retirement until the total contributions made by the
person equal the amount of contributions the retiree would have
made if the retiree had retired with 30 years of service [Any
donations made to the fund and all money received from any source
for the fund shall be deposited in the fund at the earliest
opportunity].
(c) A retiree who retired under the pension act as a result
of a disability, or the disability retiree's surviving spouse in
the case of a deceased disability retiree, is not required to make
contributions under Subsection (b) of this section for more than 10
years following the date of the disability retiree's retirement
[The municipal contribution to and health benefits paid from the
fund are a part of the compensation for services rendered to the
municipality. This Act is considered part of the contract of
employment and appointment of the firefighters and police officers
of a municipality to which this Act applies].
(d) To be eligible for health benefits under Section 5.01 of
this Act, the surviving spouse of a deceased member who died in the
line of duty, as determined under the collective bargaining
agreements, or was an active member at the time of death, shall
continue to make contributions to the fund as required by
Subsection (a) of this section beginning on the date of the member's
death until the earlier of:
(1) the expiration of 10 years following the date of
the member's death; or
(2) the expiration of the period following the date of
the member's death that, when added to the deceased member's years
of service, equals 30 years.
(e) This section applies only to members who retire, become
disabled, or die in the line of duty after October 1, 2005, and
their surviving spouses.
(f) Persons other than active members shall pay
contributions required under this section on a monthly basis by
payroll deduction or in cash.
(g) The municipal contributions to and health benefits paid
from the fund are a part of the compensation for services rendered
to a municipality to which this Act applies. This Act is considered
part of the contract of employment and appointment of the
firefighters and police officers of a municipality to which this
Act applies.
SECTION 10. Article 4, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended by adding Sections 4.021 and 4.022 to
read as follows:
Sec. 4.021. CONTRIBUTIONS BY A MUNICIPALITY. (a) A
municipality to which this Act applies shall pay into the fund an
amount equal to a percentage of member payroll, according to the
following schedule:
(1) 11.24 percent for each full pay period beginning
after September 30, 2005, and ending before October 1, 2006;
(2) 11.94 percent for each full pay period beginning
after September 30, 2006, and ending before October 1, 2007;
(3) 12.64 percent for each full pay period beginning
after September 30, 2007, and ending before October 1, 2008;
(4) 13.34 percent for each full pay period beginning
after September 30, 2008, and ending before October 1, 2009;
(5) 14.04 percent for each full pay period beginning
after September 30, 2009, and ending before October 1, 2010;
(6) 14.74 percent for each full pay period beginning
after September 30, 2010, and ending before October 1, 2011;
(7) 15.44 percent for each full pay period beginning
after September 30, 2011, and ending before October 1, 2012;
(8) 16.14 percent for each full pay period beginning
after September 30, 2012, and ending before October 1, 2013;
(9) 16.84 percent for each full pay period beginning
after September 30, 2013, and ending before October 1, 2014;
(10) 17.54 percent for each full pay period beginning
after September 30, 2014, and ending before October 1, 2015;
(11) 18.24 percent for each full pay period beginning
after September 30, 2015, and ending before October 1, 2016;
(12) 18.94 percent for each full pay period beginning
after September 30, 2016, and ending before October 1, 2017;
(13) 19.64 percent for each full pay period beginning
after September 30, 2017, and ending before October 1, 2018;
(14) 20.34 percent for each full pay period beginning
after September 30, 2018, and ending before October 1, 2019;
(15) 21.04 percent for each full pay period beginning
after September 30, 2019.
(b) The payments into the fund by the municipality for each
active member shall be made on the same day the contributions are
deducted from active members' compensation under Section 4.02(a) of
this Act.
(c) The municipal contribution to and health benefits paid
from the fund are part of the compensation for services rendered to
the municipality. This Act is considered part of the contract of
employment and appointment of the firefighters and police officers
of a municipality to which this Act applies.
Sec. 4.022. UNIFORMED SERVICE. (a) A member of the fund
who enters any uniformed service of the United States may not:
(1) be required to make the monthly payments into the
fund as required by this Act while the member is engaged in active
service with the uniformed service; or
(2) lose any seniority rights or retirement benefits
provided by this Act because of that service.
(b) Not later than the 90th day after the date of the
member's reinstatement to an active status in a fire or police
department, the member shall file with the secretary of the board a
written statement of intent to pay into the fund an amount equal to
the amount the member would have paid if the member had remained on
active status in the department during the period of the member's
absence while in the uniformed service.
(c) The member shall make the payment described by
Subsection (b) of this section in full within a period of time after
the member's return that is equal to three times the amount of time
the member was absent, except that the maximum period for payment
may not exceed five years.
(d) If the member does not comply with Subsections (b) and
(c) of this section, the member loses all credit toward the member's
years of service for the length of time the member was engaged in
active service in any uniformed service.
(e) The amount of credit purchased under this section may
not exceed the length of the active service in a uniformed service
required to be credited by law.
SECTION 11. Section 4.03(b), Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
(b) This fund is intended to be a voluntary employee's
beneficiary association as described by Section 501(c), Internal
Revenue Code of 1986 (26 U.S.C. Section 501(c)), as amended, and the
board has the discretion to [may] take any action necessary to
ensure that the fund is classified as such.
SECTION 12. Section 5.01, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 5.01. RETIREMENT HEALTH BENEFITS. (a) A person is
eligible to receive health and medical benefits under this Act to
the same extent the person is eligible to receive health and medical
benefits under the retiree health plan, subject to the terms and
conditions of the retiree health plan, except as otherwise provided
by this Act.
(b) Health and medical benefits that are substantially
similar to the health and medical benefits provided under the
retiree health plan shall be provided by the fund to persons who are
eligible to receive them under Subsection (a) of this section,
subject to the terms and conditions of the retiree health plan,
except as otherwise provided by this Act.
(c) The expiration of the terms of the collective bargaining
agreements or the master contract document has no effect on the
benefits provided under this Act.
(d) The board may adjust, modify, or change benefits
provided under this section if the fund's total actuarial unfunded
liability, as determined by the actuary, is not increased by the
adjustment, modification, or change.
(e) The board shall determine which persons are eligible to
receive benefits under this section and which benefits the persons
are eligible to receive under Subsections (a) and (b) of this
section.
(f) The board may discontinue benefits under this section
for any person who does not make the contributions required by
Section 4.02 of this Act.
(g) Beginning on January 1, 2006, the maximum out-of-pocket
(including deductible) payment for each individual each calendar
year as set out in Appendix B to the retiree health plan increases
from $700 to $1,200 [Retirement health benefits shall be
determined in accordance with the collective bargaining
agreements].
SECTION 13. Section 6.02, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 6.02. ACCOUNTS AND FINANCIAL REPORTS. (a) Accounts of
the fund shall be kept as ordered by the board.
(b) The board shall require that monthly financial reports
showing all fund receipts and disbursements be prepared and
submitted to the board.
SECTION 14. Section 6.04(c), Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
(c) The board may directly manage investments of the reserve
funds or may choose to contract for professional management
services. If the funds own real estate, the board may, at its
discretion, establish an organization described by Section
501(c)(2) or [Section] 501(c)(25), Internal Revenue Code of 1986
(26 U.S.C. Sections 501(c)(2) and [Section] 501(c)(25)), as
amended, to hold title to the real estate.
SECTION 15. Section 6.05(a), Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
(a) The board may contract for professional investment
management services, financial consultants, independent auditors,
third-party administrators, preferred providers, health
maintenance organizations, attorneys, and actuaries. Only the
board may enter into those contracts. The board may establish a
reasonable fee for compensation under those contracts.
SECTION 16. Section 6.06, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 6.06. INVESTMENT CONSULTANT [MANAGER] QUALIFICATIONS.
In appointing investment consultants [managers], the board shall
require that the investment consultant [manager] be:
(1) registered under the Investment Advisors Act of
1940 (15 U.S.C. Section 80b-1 et seq.), as amended;
(2) a bank as defined by that Act; or
(3) an insurance company qualified to perform
investment services under the law of more than one state.
SECTION 17. Section 6.01, Chapter 1332, Acts of the 75th
Legislature, Regular Session, 1997 (Article 6243q, Vernon's Texas
Civil Statutes), is repealed.
SECTION 18. This Act takes effect October 1, 2005.