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79R7859 DLF-D
By: Duncan S.B. No. 1691
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 12.012(b), Education Code, is amended to
read as follows:
(b) An employee of a home-rule school district does not
qualify [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 employed by an
independent school district is covered].
SECTION 2. 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 3. 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 4. 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 5. 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 6. 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.
SECTION 7. 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 8. 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 9. 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 10. 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 11. Section 823.401(d), Government Code, is 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].
SECTION 12. 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 13. 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 14. Section 825.103, Government Code, is amended by
adding Subsections (c), (d), and (e) 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,
Government Code, 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 and data management
operations, procurement of hardware, software, and middleware,
location, operation, and replacement of computers and systems, data
processing, security, and disaster recovery. The Department of
Information Resources shall assist the retirement system at the
request of the retirement system, and the retirement system may use
the services of that department in procuring goods and services.
SECTION 15. 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 16. 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 17. 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) the portion of a deposit required by Section
823.401(e) to establish out-of-state service credit that
represents a fee; and
(8) employer contributions required under Section
825.4092.
SECTION 18. 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 19. 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 employs a
retiree.
(b) During each payroll period in which a retiree is
employed, the employer shall contribute to the retirement system
for each retiree 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 state's current contribution amount authorized
by the General Appropriations Act.
(c) The employer may not deduct any part of the amount
required to be paid under Subsection (b) from the compensation of
the employed retiree.
(d) 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 shall contribute to the
trust fund established under that chapter any difference between
the contribution 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 the retiree is employed by more than one employer during
a month, the amount of the required contribution shall be prorated
among the employers.
(e) Contributions under this section are subject to the
requirements of Section 825.408.
SECTION 20. 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 21. 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 22. Section 825.507(b), Government Code, is amended
to read as follows:
(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 23. The heading to Section 825.512, Government
Code, is amended to read as follows:
Sec. 825.512. INVESTMENT PRACTICES AND PERFORMANCE REPORTS
[AUDIT].
SECTION 24. 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 25. 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 26. Section 1575.004, Insurance Code, is amended
by amending Subsection (a) and adding Subsections (d) and (e) to
read as follows:
(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
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;
(B) 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 as
a retiree as those requirements existed on August 31, 2004;
(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 for actual
service in public education in this state, for military service,
and for out-of-state service [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, 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.
(d) An individual who qualifies as a retiree under
Subsection (a)(1)(B) only at the time of retirement, but does not
enroll in the group program at that time, or who ceases
participation in the group program before qualifying as a retiree
under another provision of this section, may choose on qualifying
as a retiree under another provision of this section to participate
in the group program. An election under this subsection must be made
in accordance with rules adopted by the trustee.
(e) For purposes of this section, to meet the requirements
for eligibility that existed on August 31, 2004, an individual:
(1) 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:
(A) at least 10 years of service credit in the
retirement system for actual service in public schools in this
state; or
(B) at least five years of service credit for
actual public service in the public schools in this state and five
years of out-of-state service credit in the Teacher Retirement
System of Texas; or
(2) must have taken a disability retirement under the
Teacher Retirement System of Texas and have been entitled to
receive monthly benefits from the Teacher Retirement System of
Texas.
SECTION 27. 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 28. 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 public school that employs
a retiree who is enrolled in the group program shall contribute to
the fund the difference, if any, between the contribution amount
that 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 trustee.
SECTION 29. Section 1575.211(c), Insurance Code, is amended
to read as follows:
(c) A retiree who is eligible to participate under Section
1575.004(a)(1)(B) only and who elects to participate is, except as
provided by this subsection, required to pay during the period of
participation the total cost, as determined by the trustee,
attributable to the participation of that individual and the
dependents of that individual until the date the individual is
otherwise eligible under Section 1575.004. The General
Appropriations Act or other similar legislation may specify a
different allocation of total costs for retirees eligible to
participate under Section 1575.004(a)(1)(B) and the dependents of
those retirees. This subsection applies only to an individual who
is eligible to participate as an annuitant under Section
1575.004(a)(1)(B) and who is not otherwise eligible to participate
under another provision of Section 1575.004 at the time of
retirement.
SECTION 30. 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 31. 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 32. Subchapter A, Chapter 1579, Insurance Code, is
amended by adding Sections 1579.005-1579.007 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 coverage or benefit provider 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, active employee and state contributions, and retiree,
surviving spouse, and surviving dependent child contributions;
(2) any rights, benefits, or payments accruing to any
person under this chapter; and
(3) 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.
SECTION 33. 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 34. 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 35. 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 36. 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 37. The following laws are repealed:
(1) Sections 22.004(d) and (e), Education Code;
(2) Section 823.401(i), Government Code;
(3) Section 824.202(c), Government Code;
(4) Chapters 1577 and 1580, Insurance Code;
(5) Section 57, Chapter 201, Acts of the 78th
Legislature, Regular Session, 2003;
(6) Chapter 313, Acts of the 78th Legislature, Regular
Session, 2003; and
(7) Section 1.01, Chapter 366, Acts of the 78th
Legislature, Regular Session, 2003.
SECTION 38. 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 is 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 39. After September 1, 2005, a member of the Teacher
Retirement System of Texas entering into an agreement with the
retirement system for the purchase in installments of out-of-state
service credit must pay the actuarial present value, at the time of
deposit, of the additional benefits. Unless terminated before all
payments are made, an agreement existing as of September 1, 2005,
between an individual and the retirement system for the purchase in
installments of out-of-state service credit, is unaffected by this
Act.
SECTION 40. The change in law made by the repeal of Section
824.202(c), Government Code, applies only to a person who retires
under the Teacher Retirement System of Texas on or after September
1, 2005. 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.
SECTION 41. The changes in law made by this Act to the laws
that affect employer contributions apply to any retiree of the
Teacher Retirement System of Texas employed by an employer as
defined by Section 821.001, Government Code, during any month after
the effective date of this Act.
SECTION 42. An individual who retired after August 31,
2004, and before September 1, 2005, and qualified as a retiree under
Section 1575.004(a)(1)(B), Insurance Code, whether or not the
retiree enrolled in the group program at that time, or ceased to
participate in the group program before qualifying as a retiree
under another provision of Section 1575.004, Insurance Code, shall,
as of September 1, 2005, be eligible under Section
1575.004(a)(1)(D), Insurance Code, as amended by this Act, if the
individual satisfies the requirements of that paragraph as amended
by this Act.
SECTION 43. This Act takes effect September 1, 2005.