By: Armbrister S.B. No. 1176
A BILL TO BE ENTITLED
AN ACT
relating to systems and programs administered by the Employees
Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter F, Chapter 411, Government Code, is
amended by adding Section 411.1402 to read as follows:
Sec. 411.1402. ACCESS TO CRIMINAL HISTORY RECORD
INFORMATION: EMPLOYEES RETIREMENT SYSTEM OF TEXAS. (a) The
Employees Retirement System of Texas is entitled to obtain from the
department criminal history record information maintained by the
department that relates to a person who is an applicant for
employment with, or who is or has been employed by, the retirement
system.
(b) Criminal history record information obtained by the
Employees Retirement System of Texas under Subsection (a) may be
used only to evaluate an applicant for employment with, or a current
or former employee of, the retirement system.
(c) The Employees Retirement System of Texas may not release
or disclose information obtained under Subsection (a) except on
court order.
(d) After the expiration of any probationary term of the
person's employment or not later than the 180th day after the date
of receipt of the information, whichever is later, the Employees
Retirement System of Texas shall destroy all criminal history
record information obtained under Subsection (a).
SECTION 2. Subdivision (2-a), Section 609.001, Government
Code, is amended to read as follows:
(2-a) "Institution of higher education" means an
institution of higher education as defined by Section 61.003,
Education Code[, other than a public junior college].
SECTION 3. Section 811.001, Government Code, is amended by
adding Subdivision (8-a) to read as follows:
(8-a) "Good cause" means that a person's failure to act
was not because of a lack of due diligence the exercise of which
would have caused a reasonable person to take prompt and timely
action. A failure to act based on ignorance of the law or facts
reasonably discoverable through the exercise of due diligence does
not constitute good cause.
SECTION 4. Section 812.003, Government Code, is amended to
read as follows:
Sec. 812.003. MEMBERSHIP IN EMPLOYEE CLASS. (a) Except as
provided by Subsections [Subsection] (b) and (d), membership in the
employee class of the retirement system includes all employees and
appointed officers of every department, commission, board, agency,
or institution of the state except:
(1) independent contractors and their employees
performing work for the state; and
(2) persons disqualified from membership under
Section 812.201.
(b) An office or employment that is included in the coverage
of the Teacher Retirement System of Texas, the Judicial Retirement
System of Texas Plan One, or the Judicial Retirement System of Texas
Plan Two is not a position with a department, commission, board,
agency, or institution of the state for purposes of this subtitle.
(c) Membership in the employee class is mandatory for
eligible persons.
(d) Membership [For persons whose employment or office
holding begins on or after September 1, 2005, membership in the
employee class begins on the first day the person is employed or
holds office.
[(e) For persons whose employment or office holding begins
before September 1, 2005, membership] in the employee class begins
on the 91st day after the first day a person is employed or holds
office.
(e) [(f)] A person who is reemployed or who again holds
office after withdrawing contributions under Subchapter B for
previous service credited in the employee class begins membership
in the employee class on the 91st day after the first day the person
is reemployed or again holds office.
(f) A [(g) Notwithstanding any other provision of law, a]
member may establish service credit only as provided by Section
813.514 for service performed during the 90-day waiting period
provided by Subsection (d) or (e) [or (f)].
[(h) Subsections (e), (f), and (g) and this subsection
expire September 1, 2005.]
SECTION 5. Subsection (a), Section 812.005, Government
Code, is amended to read as follows:
(a) A person's membership in the retirement system is
terminated by:
(1) death of the person;
(2) retirement based on service credited in all
classes of membership in which the person has service credit; or
(3) withdrawal of all of the person's accumulated
contributions[; or
[(4) transfer of the person's accumulated
contributions under Section 815.502(e)].
SECTION 6. Subchapter A, Chapter 812, Government Code, is
amended by adding Section 812.006 to read as follows:
Sec. 812.006. OPTIONAL MEMBERSHIP. (a) In this section, "
qualified employee" means a person who:
(1) has at least three years of service credit in the
retirement system in the legislative branch that was accrued before
June 18, 1993;
(2) was employed by an institution of higher
education, as defined by Section 61.003, Education Code, before
June 18, 1993, and elected to participate in the optional
retirement program under Chapter 830; and
(3) is actively participating in the optional
retirement program.
(b) A qualified employee may make a one-time, irrevocable
election in a manner provided by the retirement system to renew
active participation in the system and cease participation in the
optional retirement program.
(c) An employee who makes an election under this section is
not eligible to establish service credit in the retirement system
for service performed while participating in the optional
retirement program.
(d) This section is contingent upon the receipt of a
favorable Internal Revenue Service ruling addressing all tax
issues.
(e) An election authorized by this section must be made
within 90 days of the Internal Revenue Service ruling.
SECTION 7. Subsection (b), Section 813.102, Government
Code, is amended to read as follows:
(b) A member may reestablish credit by depositing with the
retirement system in a lump sum the amount withdrawn from a
membership class, plus interest computed on the basis of the state
fiscal year at an annual rate of 10 [five] percent from the date of
withdrawal to the date of redeposit.
SECTION 8. Section 813.504, Government Code, is amended to
read as follows:
Sec. 813.504. ELIGIBILITY FOR SERVICE CREDIT PREVIOUSLY
CANCELED. [(a)] A person may reestablish service credit
previously canceled in the retirement system if[:
[(1)] the person is a member of the employee class and
at least six months have elapsed since the end of the month in which
the cancellation became effective[; or
[(2) the person is:
[(A) a former member of the employee class; and
[(B) a participant in the optional retirement
program under Chapter 830].
SECTION 9. Subsection (a), Section 813.513, Government
Code, is amended to read as follows:
(a) An eligible member may establish not more than 36 [60]
months of equivalent membership service credit, including law
enforcement or custodial officer service, in either the elected
class or the employee class.
SECTION 10. Subsection (c), Section 813.514, Government
Code, is amended to read as follows:
(c) After a member makes the deposits required by this
section, the retirement system shall grant the member one month of
equivalent membership service credit for each month of credit
approved. [A member may establish not more than three months of
equivalent membership service credit under this section.]
SECTION 11. Subchapter A, Chapter 814, Government Code, is
amended by adding Section 814.011 to read as follows:
Sec. 814.011. LUMP-SUM PAYMENTS IN LIEU OF ANNUITIES. The
retirement system may elect to make a lump-sum payment to a retiree
or beneficiary in lieu of annuity payments if the actuarial present
value of the annuity at the time of retirement or death does not
exceed $20,000. Payment of a lump sum under this section does not
affect eligibility for any other program administered by the
retirement system.
SECTION 12. Section 814.1042, Government Code, is amended
by amending Subsections (b) and (c) and adding Subsection (d) to
read as follows:
(b) A member who seeks the application of this section must
provide documentation satisfactory to the retirement system of the
amount of service performed for the governmental employer. All
documentation required to establish such service must be received
by the retirement system on or before August 31, 2005.
(c) Service described by this section shall not count toward
the 10 years of service credit used to determine [may not be used in
determining] eligibility for participation under Chapter 1551,
Insurance Code, but may be used to determine eligibility under
Section 814.104(a)(2) regardless of the age of the member.
(d) This section expires August 31, 2005, provided,
however, that this section will remain in full force and effect for
any member who has Texas governmental employer service that has
been certified by the retirement system as provided by Subsection
(b). In which case the member may maintain the service credit
without expiration, and the service credit shall be considered by
the retirement system for the purpose of determining eligibility to
receive a service retirement annuity as provided by Subsection (a).
SECTION 13. Section 814.202, Government Code, is amended by
amending Subsections (a), (b), and (e) and adding Subsection (f) to
read as follows:
(a) A member who was contributing to the retirement system
at the time the member became permanently disabled for the further
performance of duty is eligible to retire for a nonoccupational
disability if the member has at least:
(1) 8 years of membership service credit in the
elected class of membership;
(2) 6 years of membership service credit in the
elected class plus 2 years of military service credit established
before January 1, 1978; or
(3) 10 years of membership service credit in the
employee class of membership.
(b) A member who was contributing to the retirement system
at the time the member became permanently incapacitated for the
further performance of duty, who meets the requirements provided by
Section 811.001(12), and who has service credit in either
membership class is eligible to retire for an occupational
disability regardless of age or amount of service credit.
(e) A member otherwise eligible may not apply for or receive
a nonoccupational disability annuity if the member is eligible for
a service retirement annuity under Section 814.102 or 814.104(a)(2)
or (b) [814.104].
(f) An application for a nonoccupational disability
retirement may not be made after the second anniversary of the date
the member ceased making contributions to the retirement system.
SECTION 14. Section 814.203, Government Code, is amended to
read as follows:
Sec. 814.203. CERTIFICATION OF DISABILITY. As soon as
practicable after an application for disability retirement is
filed, the medical board shall evaluate the medical and other
pertinent information regarding the member's application. If the
medical board finds that the member is mentally or physically
incapacitated for the further performance of duty, as supported by
substantial, objective, medical evidence, and that the incapacity
is likely to be permanent, the medical board shall issue a
certification of disability and submit it to the executive
director. A certification under this section is admissible in a
contested case under Section 815.511 without proving the medical
board as experts.
SECTION 15. Section 814.206, Government Code, is amended by
adding Subsection (f) to read as follows:
(f) A standard nonoccupational disability retirement
annuity under this section is reducible, under actuarial tables
adopted by the board of trustees, for a member who retires before
reaching an applicable age provided by Section 814.102 or 814.104.
SECTION 16. Subsection (a), Section 814.301, Government
Code, is amended to read as follows:
(a) A contributing member who has at least 10 years of
service credit in the elected or employee class of membership may
select a death benefit plan for the payment, if the member dies
while the member is eligible to select a plan, of a death benefit
annuity to a person designated by the member. Death benefit
annuities available for selection by a member described in this
subsection are the optional annuities provided by Sections
814.108(c)(1) and (c)(4), payable as if the member had retired at
the time of death.
SECTION 17. Subsection (a), Section 814.302, Government
Code, is amended to read as follows:
(a) If a contributing member eligible to select a death
benefit plan under Section 814.301 dies without having made a
selection, or if a selection cannot be made effective, the member's
designated beneficiary may select a plan in the same manner as if
the member had made the selection. If there is no designated
beneficiary, the personal representative of the decedent's estate
may make the selection for the benefit of the decedent's heirs or
devisees. In lieu of selecting a death benefit plan, the designated
beneficiary or, if there is none, the personal representative of
the decedent's estate, may elect to receive a refund of
contributions and any applicable payment under Section 814.401.
SECTION 18. Subsection (a), Section 815.103, Government
Code, is amended to read as follows:
(a) The board of trustees shall administer all assets of the
retirement system. The board is the trustee of the system's assets.
The board of trustees shall hold all retirement system assets in
trust for the exclusive benefit of the members and annuitants of the
system and administer all operations funded by trust assets for the
same purpose.
SECTION 19. Section 815.109, Government Code, is amended to
read as follows:
Sec. 815.109. CORRECTION OF ERRORS. If an error in the
records of the retirement system results in a person receiving more
or less money than the person is entitled to receive under this
subtitle, the retirement system shall correct the error in
accordance with Section 802.1024 and so far as practicable shall
adjust future payments so that the actuarial equivalent of the
benefit to which the person is entitled is paid.
SECTION 20. Section 815.204, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) The medical board is not subject to subpoena regarding
findings it makes in assisting the executive director under this
section, and its members may not be held liable for any opinions,
conclusions, or recommendations made under this section.
SECTION 21. Subsections (a), (c), and (d), Section 815.504,
Government Code, are amended to read as follows:
(a) The retirement system may photograph, microphotograph,
or film any record in its possession or preserve the record through
electronic document imaging.
(c) A photograph, microphotograph, [or] film, or electronic
document image of a record reproduced under Subsection (a) is
equivalent to the original record for all purposes, including
introduction as evidence in all courts and administrative agency
proceedings. A [duly] certified or authenticated copy of such a
record [photograph, microphotograph, or film] is admissible as
evidence equally with the original [photograph, microphotograph,
or film].
(d) The executive director or an authorized representative
may certify the authenticity [of a photograph, microphotograph, or
film] of a record reproduced under this section and shall charge a
fee for the certified copy [photograph, microphotograph, or film]
as provided by law.
SECTION 22. Subchapter F, Chapter 815, Government Code, is
amended by adding Sections 815.5111, 815.513, and 815.514 to read
as follows:
Sec. 815.5111. DILIGENT PROSECUTION OF SUIT. The plaintiff
shall prosecute with reasonable diligence any suit brought under
Section 815.511(f). If the plaintiff does not secure proper
service of process or does not prosecute the suit within one year
after it is filed, the court shall presume that the suit has been
abandoned. The court shall dismiss the suit on a motion for
dismissal made by or on behalf of the retirement system unless the
plaintiff, after receiving appropriate notice, shows good cause for
the delay.
Sec. 815.513. EXCLUSIVE REMEDIES. The remedies provided
under this chapter are the exclusive remedies available to a
member, retiree, beneficiary, or alternate payee.
Sec. 815.514. MAILINGS ON BEHALF OF NONPROFIT ASSOCIATION.
The retirement system may make mailings on behalf of a nonprofit
association of active or retired state employees described by
Section 814.009, for purposes of association membership and
research only, to annuitants identified in information contained in
records that are in the custody of the system. The nonprofit
association requesting a mailing shall pay the expenses of the
mailing.
SECTION 23. Subsection (b), Section 838.108, Government
Code, is amended to read as follows:
(b) A member is eligible to establish service credit under
this section only for the purpose of becoming eligible to retire, or
retiring, under Section 839.101(a)(3) [if the member has at least
120 months of actual membership service of the type of service that
the member seeks to establish].
SECTION 24. Subsection (a), Section 840.001, Government
Code, is amended to read as follows:
(a) The board of trustees of the Employees Retirement System
of Texas, as provided by Subchapter A of Chapter 815, is responsible
for the general administration and operation of the retirement
system. The board of trustees shall hold all retirement system
assets in trust for the exclusive benefit of the members and
annuitants of the system and administer all operations funded by
trust assets for the same purpose.
SECTION 25. Section 1551.003, Insurance Code, is amended by
adding Subdivision (9-a) to read as follows:
(9-a) "Good cause" means that a person's failure to act
was not because of a lack of due diligence the exercise of which
would have caused a reasonable person to take prompt and timely
action. A failure to act based on ignorance of the law or facts
reasonably discoverable through the exercise of due diligence does
not constitute good cause.
SECTION 26. Subsection (c), Section 1551.063, Insurance
Code, is amended to read as follows:
(c) To accomplish the purposes of this chapter, the [The]
board of trustees may release the records to:
(1) an administrator, carrier, agent, or attorney
acting on behalf of the board;
(2) another governmental entity having a legitimate
need for the information to perform a function of the board of
trustees;
(3) an authorized [a] medical provider of the
participant [to accomplish the purposes of this chapter]; or
(4) a party in response to a subpoena issued under
applicable law.
SECTION 27. Subsection (e), Section 1551.101, Insurance
Code, is amended to read as follows:
(e) An individual is eligible to participate in the group
benefits program as provided by Subsection (a) if the individual
receives compensation for service performed for an institution of
higher education pursuant to a payroll certified by an institution
of higher education or by an elected or appointed officer of this
state and either:
(1) is eligible to become [be] a member of the Teacher
Retirement System of Texas after any waiting period provided by law
before membership in that retirement system; or
(2) is employed at least 20 hours a week and is not
permitted to be a member of the Teacher Retirement System of Texas
because the individual is employed by an institution of higher
education only in a position that as a condition of employment
requires the individual to be enrolled as a student in the
institution in graduate-level courses.
SECTION 28. Subchapter E, Chapter 1551, Insurance Code, is
amended by adding Section 1551.220 to read as follows:
Sec. 1551.220. BENEFICIARY CAUSING DEATH OF PARTICIPANT OR
BENEFICIARY OF PARTICIPANT. (a) A benefit payable on the death of
a participant or the beneficiary of a participant in the group
benefits program may not be paid to a person convicted of causing
that death but instead is payable as if the convicted person had
predeceased the decedent.
(b) The Employees Retirement System of Texas is not required
to change the recipient of benefits under this section unless it
receives actual notice of the conviction of a beneficiary.
However, the retirement system may delay payment of a benefit
payable on the death of a participant or beneficiary of a
participant pending the results of a criminal investigation and of
legal proceedings relating to the cause of death.
(c) For the purposes of this section, a person has been
convicted of causing the death of a participant or beneficiary of a
participant if the person:
(1) pleads guilty or nolo contendere to, or is found
guilty by a court of, causing the death of the participant or
beneficiary of a participant, regardless of whether sentence is
imposed or probated; and
(2) has no appeal of the conviction pending and the
time provided for appeal has expired.
SECTION 29. Subsection (a), Section 1551.259, Insurance
Code, is amended to read as follows:
(a) The amount of group life coverage and group accidental
death and dismemberment coverage in force for a participant on the
date the participant dies shall be paid, on the establishment of a
valid claim, to a person surviving the death in the following order
of precedence:
(1) to the beneficiary designated by the participant
in a signed and witnessed document mailed before the death of the
participant [writing received before death by the employing state
agency];
(2) if a beneficiary is not designated, to the spouse
of the participant;
(3) if Subdivisions (1) and (2) do not apply, to the
children of the participant and descendants of the deceased
children by representation;
(4) if Subdivisions (1)-(3) do not apply, to the
parents of the participant or the survivor of the parents;
(5) if Subdivisions (1)-(4) do not apply, to the
executor or administrator of the estate of the participant; or
(6) if Subdivisions (1)-(5) do not apply, to other
relatives of the participant entitled under applicable laws of the
participant's domicile on the date of the participant's death.
SECTION 30. Subchapter G, Chapter 1551, Insurance Code, is
amended by adding Section 1551.3195 to read a follows:
Sec. 1551.3195. AMOUNT OF CONTRIBUTION FOR ANNUITANTS WHO
WERE PART-TIME EMPLOYEES. An annuitant who as an employee received
the benefits of a state contribution under Section 1551.319(b) for
coverage during any portion of the annuitant's last employment by a
state agency is not eligible to receive more than the state
contribution provided under Section 1551.319(b) unless the
annuitant was designated by the annuitant's employer as a full-time
employee during the three-consecutive-month period before
retirement.
SECTION 31. Subsection (d), Section 1551.351, Insurance
Code, is amended to read as follows:
(d) A person may appeal a determination made under
Subsection (a) or (b) or Section 1551.352 only to the board of
trustees. A proceeding under this subsection is a contested case
under Chapter 2001, Government Code. This subchapter applies to an
appeal to the board of trustees under this subsection. The
appellant has the burden of proof on all issues, including issues in
the nature of an affirmative defense. Any[, and any] sanction
imposed is not stayed during an appeal under this subsection. [If a
person fails to make a timely appeal, any sanction relates back to
the date of the Employees Retirement System of Texas'
determination.] An appeal of a decision of the board of trustees
under this subsection is under the substantial evidence rule.
SECTION 32. Subchapter H, Chapter 1551, Insurance Code, is
amended by adding Section 1551.361 to read as follows:
Sec. 1551.361. DILIGENT PROSECUTION OF SUIT. The plaintiff
shall prosecute with reasonable diligence any suit brought under
Section 1551.359. If the plaintiff does not secure proper service
of process or does not prosecute the suit within one year after it
is filed, the court shall presume that the suit has been abandoned.
The court shall dismiss the suit on a motion for dismissal made on
or behalf of the Employees Retirement System of Texas, unless the
plaintiff, after receiving appropriate notice, shows good cause for
the delay.
SECTION 33. A retiree of the Employees Retirement System of
Texas who at the time of retirement had at least 25 years of service
credit in the retirement system and has served as the executive head
of a legislative agency is eligible to make an election to retire as
a member of the elected class of membership. The election must be
made in writing to the Employees Retirement System of Texas before
September 1, 2008. After the filing of such an election, the
retirement system shall consider all the service credit established
by the person who makes the election, including service credit
established after the date the election is filed, as if it were
performed as a member of the elected class of membership.
SECTION 34. (a) The change in law made by this Act to
Section 814.202, Government Code, applies only to a person who
applies for a disability retirement annuity on or after the
effective date of this Act. A person who applied for a disability
retirement annuity before the effective date of this Act is
governed by the law as it existed immediately before the effective
date of this Act, and the former law is continued in effect for that
purpose.
(b) The changes in law made by this Act to Sections 814.301
and 814.302, Government Code, apply only to the selection of a death
benefit plan that is made on or after the effective date of this
Act. A person who selected a death benefit plan before the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
(c) The change in law made by this Act to Subsection (d),
Section 1551.351, Insurance Code, applies only to an appeal filed
on or after the effective date of this Act. An appeal filed under
that subsection before the effective date of this Act is governed by
the law as it existed immediately before the effective date of this
Act, and the former law is continued in effect for that purpose.
SECTION 35. The following provisions of the Government Code
are repealed:
(1) Section 813.103;
(2) Section 813.507;
(3) Section 813.508;
(4) Section 813.510; and
(5) Subsection (d), Section 814.202.
SECTION 36. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2005.
(b) The changes in law made by this Act to Subsection (a),
Section 813.513, Government Code, and Section 1551.3195, Insurance
Code, as added by this Act, take effect January 1, 2006.
(c) The change in law made by this Act to Subsection (b),
Section 813.102, Government Code, takes effect September 1, 2006.