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A BILL TO BE ENTITLED
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AN ACT
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relating to retirement systems for police officers in certain |
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municipalities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1.02(1), Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended to read as follows: |
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(1) "Accumulated deposits" means the amount standing |
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to the credit of a member derived from the deposits required to be |
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made by the member to the police retirement system or to the |
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predecessor system. Accumulated deposits also include [improved
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annually by] interest that is credited annually to the account of a |
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vested member at a rate of five percent or the rate determined by |
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the board and that is credited as of December 31 to amounts standing |
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to the credit of the member on January 1 of the same calendar year. |
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Accumulated deposits also include interest credited to the account |
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of a member before September 1, 2007, without regard to whether the |
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member is vested at the time the interest is credited to the |
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member's account. |
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SECTION 2. Article III, Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended by adding Sections 3.13 and 3.14 |
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to read as follows: |
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Sec. 3.13. REIMBURSEMENT OF LEGAL EXPENSES OF BOARD MEMBER |
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OR EMPLOYEE OF SYSTEM. (a) The board may: |
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(1) reimburse a board member or an employee of the |
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police retirement system for liability imposed as damages because |
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of an alleged act, error, or omission committed in the person's |
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capacity as a fiduciary or co-fiduciary of assets of the system or |
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as an employee of the system and for costs and expenses incurred by |
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the person in defense of a claim of an alleged act, error, or |
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omission; or |
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(2) purchase from an insurer authorized to engage in |
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business in this state one or more insurance policies that provide |
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for that reimbursement. |
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(b) The board may not provide reimbursement under this |
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section, and may not purchase an insurance policy under this |
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section that would provide reimbursement, of a board member or |
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employee of the police retirement system for liability imposed or |
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expenses incurred because of the person's personal dishonesty, |
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fraudulent breach of trust, lack of good faith, intentional fraud |
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or deception, or intentional failure to act prudently. |
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(c) The cost of reimbursement or an insurance policy |
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purchased under this section shall be paid from the assets of the |
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police retirement system. |
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Sec. 3.14. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS, |
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RETIREES, ANNUITANTS, OR BENEFICIARIES. (a) Information contained |
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in records that are in the custody of the police retirement system |
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concerning an individual member, retiree, annuitant, or |
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beneficiary is confidential under Section 552.101, Government |
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Code, and may not be disclosed in a form identifiable with a |
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specific individual unless: |
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(1) the information is disclosed to: |
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(A) the individual or the individual's attorney, |
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guardian, executor, administrator, or conservator, or another |
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person who the administrator of the police retirement system |
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determines is acting in the interest of the individual or the |
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individual's estate; |
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(B) a spouse or former spouse of the individual |
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after the administrator of the police retirement system determines |
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that the information is relevant to the spouse's or former spouse's |
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interest in member accounts, benefits, or other amounts payable by |
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the police retirement system; |
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(C) a governmental official or employee after the |
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administrator of the police retirement system determines that |
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disclosure of the requested information is reasonably necessary to |
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the performance of the duties of the official or employee; or |
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(D) a person authorized by the individual in |
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writing to receive the information; or |
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(2) the information is disclosed pursuant to a |
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subpoena and the administrator of the police retirement system |
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determines that the individual will have a reasonable opportunity |
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to contest the subpoena. |
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(b) This section does not prevent the disclosure of the |
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status or identity of an individual as a member, former member, |
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retiree, deceased member or retiree, or beneficiary of the police |
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retirement system. |
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(c) A determination and disclosure under Subsection (a) may |
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be made without notice to the individual member, retiree, |
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annuitant, or beneficiary. |
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(d) If a disclosure under Subsection (a) is a disclosure of |
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protected health information by a covered entity, as those terms |
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are defined by the privacy rule of the Administrative |
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Simplification subtitle of the Health Insurance Portability and |
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Accountability Act of 1996 (Pub. L. No. 104-191) contained in 45 |
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C.F.R. Part 160 and 45 C.F.R. Part 164, Subparts A and E, the |
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covered entity shall ensure that the authorization for the |
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disclosure complies with all of the privacy rule's applicable |
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requirements, standards, and implementation specifications |
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relating to authorizations for uses and disclosures of protected |
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health information. |
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SECTION 3. Section 4.01(f)(1), Chapter 452, Acts of the |
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72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended to read as follows: |
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(1) A member shall cease to be a member of the police |
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retirement system and shall forfeit creditable service if, after |
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employment termination through dismissal, resignation, or from any |
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other cause, the member shall withdraw the member's accumulated |
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deposits as provided under the withdrawal benefit provisions of |
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this Act; provided, however, that any eligible member who has not |
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previously received credit for one-half of the member's previously |
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forfeited creditable service shall be entitled to reinstatement of |
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previously forfeited creditable service if such eligible member or |
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eligible surviving spouse shall have deposited in the system the |
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accumulated deposits withdrawn and an interest charge based on the |
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amount withdrawn times an interest factor. The interest factor is |
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eight percent per year for the [derived by adjusting and
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compounding the annual rates of interest that were credited to the
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accumulated deposits of members, where each annual rate is adjusted
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by dividing it by 0.75. The] period that [for compounding the
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interest factor] begins with the beginning of the month and year in |
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which the member withdrew the member's accumulated deposits and |
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ends with the beginning of the month and year payment is made to the |
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system to reinstate the service. [The annual rate of interest
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applicable for the year when payment is made is considered to be
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equal to the prior year's rate of interest for the purpose of making
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the determination.] |
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SECTION 4. Section 5.03(a), Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended to read as follows: |
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(a) An eligible member or eligible surviving spouse may |
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establish creditable service for probationary service performed as |
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provided under this section according to the following conditions, |
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limitations, and restrictions: |
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(1) Probationary service creditable in the system is |
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any probationary service following commission date for which the |
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member does not have creditable service. |
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(2) An eligible member or eligible surviving spouse |
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may establish creditable service under this section by contributing |
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to the system a single payment equal to the contribution the member |
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would have made to the system for that service at the time the |
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service was performed and an interest charge based on the |
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contribution amount to be repaid times an interest factor. The |
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interest factor is eight percent per year for the [derived by
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adjusting and compounding the annual rates of interest that were
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credited to the accumulated deposits of members, where each annual
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rate is adjusted by dividing it by 0.75. The] period that [for
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compounding the interest factor] begins with the beginning of the |
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month and year at the end of the probationary period for which |
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creditable service is being established to the beginning of the |
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month and year payment is made to the system for the purpose of |
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establishing said service. [The annual rate of interest applicable
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for the year when payment is made is considered to be equal to the
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prior year's rate of interest for the purpose of making the
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determination.] |
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(3) After the eligible member or eligible surviving |
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spouse makes the deposit required by Subdivision (2) of this |
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subsection, the system shall grant the member one month of |
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creditable service for each month of probationary service |
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established under this section. |
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SECTION 5. Section 5.04(c), Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended to read as follows: |
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(c) An eligible member or eligible surviving spouse may |
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establish creditable service for cadet service performed as |
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provided under this section according to the following conditions, |
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limitations, and restrictions: |
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(1) Cadet service creditable in the system is any |
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service while a member of a cadet class for which the member does |
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not have creditable service. |
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(2) An eligible member or eligible surviving spouse |
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may establish creditable service under this section by contributing |
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to the system a single payment equal to the contribution the member |
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would have made to the system for that service at the time the |
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service was performed and an interest charge based on the |
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contribution amount to be repaid times an interest factor. The |
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interest factor is eight percent per year for the [derived by
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adjusting and compounding the annual rates of interest that were
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credited to the accumulated deposits of members, where each annual
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rate is adjusted by dividing it by 0.75. The] period that [for
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compounding the interest factor] begins with the beginning of the |
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month and year at the end of the cadet class for which creditable |
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service is being established and ends with the beginning of the |
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month and year payment is made to the system for the purpose of |
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establishing said service. [The annual rate of interest applicable
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for the year when payment is made is considered to be equal to the
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prior year's rate of interest for the purpose of making the
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determination.] |
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(3) After the eligible member or eligible surviving |
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spouse makes the deposit required by Subsection (c)(2) of this |
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section, the system shall grant the member one month of creditable |
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service for each month of cadet service established under this |
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section. |
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SECTION 6. Section 5.05, Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended by amending Subsections (a) and |
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(c) and adding Subsection (f) to read as follows: |
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(a) The police retirement board may by rule provide that a |
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member or eligible surviving spouse of a member, or a deceased |
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member's designated beneficiary if there is no surviving spouse, |
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may establish creditable service by depositing with the retirement |
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system the actuarial present value, at the time of deposit, of the |
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additional life annuity (modified cash refund) defined in Section |
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6.01 of this Act that would be attributable to the purchase of the |
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service credit under this section, based on rates and tables |
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recommended by the retirement system's actuary and adopted by the |
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board of trustees. The police retirement board may also by rule |
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provide that a member or eligible surviving spouse of a member, or a |
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deceased member's designated beneficiary if there is no surviving |
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spouse, may establish creditable service by depositing with the |
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retirement system the actuarial present value, at the time of |
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deposit, of the additional deferred life annuity (modified cash |
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refund) that would be attributable to the purchase of the service |
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credit under this section, based on rates and tables recommended by |
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the retirement system's actuary and adopted by the board of |
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trustees. As used in this section, a "deferred life annuity |
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(modified cash refund)" means a series of equal monthly payments, |
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payable for life after an inactive member's deferred retirement |
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date, which is on or before the last day of the month in which the |
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inactive member would have satisfied the eligibility requirements |
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of Section 6.02 of this Act if the member had continued as an |
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active-contributory member, excluding any permissive service |
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credit established under this section and excluding any military |
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service credit established under Section 5.02 of this Act. |
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(c) The board may not adopt a rule authorizing the purchase |
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of credit under this section unless the board has obtained an |
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actuarial study indicating that adoption of the rule will not cause |
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the amortization period for [make the retirement system financially
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unsound and that, after adoption of the rule,] the retirement |
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system's unfunded actuarial accrued liability to exceed [can be
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amortized within] the maximum amortization period adopted by the |
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Governmental Accounting Standards Board. |
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(f)(1) At the time a member establishes creditable service |
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for a deferred retirement date under this section, the member may |
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file with the board the member's written statement either selecting |
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one of the optional benefits authorized by this Act and designating |
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the beneficiary of the option if one is selected or stating that the |
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member has been afforded an opportunity to select an option but does |
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not desire to do so. An option selection becomes effective at the |
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member's date of deferred retirement. The member retains the right |
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to make a final selection until the date of deferred retirement. |
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The final selection is binding on all parties. |
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(2) If the member dies before the date of deferred |
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retirement but after filing the written statement selecting one of |
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the optional benefits, the member's survivor benefit is calculated |
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as if the member had retired on the date of deferred retirement |
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under the optional benefit selected and died the next day. |
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(3) In the event a member who is eligible for a |
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deferred retirement dies before the deferred retirement date |
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without making a written selection of an option listed in Section |
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6.03 of this Act and the member has a spouse surviving, the |
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surviving spouse of the member may select the optional form of a |
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survivor benefit in the same manner as if the member had made the |
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selection on the member's scheduled date of deferred retirement or |
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may select a lump-sum payment equal to the accumulated deposits |
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standing to the member's credit in Fund No. 1 plus an equivalent |
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amount from Fund No. 2. If the member does not have a surviving |
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spouse, the member's beneficiary or, if no beneficiary exists, the |
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executor or administrator of the member's estate is entitled to |
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select either an Option V survivor benefit (15-Year Certain and |
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Life Annuity), effective on the member's scheduled date of deferred |
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retirement, or a lump-sum payment equal to the accumulated deposits |
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standing to the member's credit in Fund No. 1 plus an equivalent |
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amount from Fund No. 2. |
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(4) When monthly survivor benefits are payable as a |
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result of the death of a member before the member's deferred |
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retirement date, an additional sum of $10,000 is payable as a death |
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benefit to the member's beneficiary or, if no beneficiary exists, |
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to the member's estate. |
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SECTION 7. Sections 6.05(a) and (c), Chapter 452, Acts of |
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the 72nd Legislature, Regular Session, 1991 (Article 6243n-1, |
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Vernon's Texas Civil Statutes), are amended to read as follows: |
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(a) In the event of death of a member who is ineligible for |
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retirement, the accumulated deposits standing to the member's |
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credit in Fund No. 1 and an equivalent amount from Fund No. 2 shall |
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be payable in a lump sum to the member's beneficiary or, if no |
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beneficiary, to the member's estate, unless the member shall have |
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directed otherwise in writing duly acknowledged and filed with the |
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board. The lump sum may not be less than $10,000 [$7,500]. When the |
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$10,000 [$7,500] minimum is payable, the amount payable from Fund |
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No. 2 is $10,000 [$7,500] minus the accumulated deposits standing |
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to the member's credit in Fund No. 1. |
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(c) In the event of death of a member receiving a retirement |
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benefit, the sum of $10,000 [$7,500] shall be payable in a lump sum |
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to the member's beneficiary or, if no beneficiary, to the member's |
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estate, unless the member shall have directed otherwise in writing, |
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duly acknowledged and filed with the board. The payment under this |
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subsection shall be made from the retiree death benefits fund |
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described in Section 6.08 of this Act. |
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SECTION 8. Section 6.06(a)(4), Chapter 452, Acts of the |
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72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended to read as follows: |
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(4) When monthly survivor benefits are payable as a |
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result of the death of a member before retirement, an additional sum |
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of $10,000 [$7,500] shall be payable as a death benefit to the |
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member's beneficiary or, if no beneficiary exists, to the member's |
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estate. |
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SECTION 9. Section 7.01(a), Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended to read as follows: |
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(a) Only members who are classified as |
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Active-Contributory[, Active-Noncontributory,] or |
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Inactive-Contributory, pursuant to Subsection (e) of Section 4.01 |
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of this Act, or who are approved for extended disability retirement |
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eligibility under this subsection, are eligible for consideration |
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for disability retirement pursuant to this article. A member may be |
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approved by the board for extended disability retirement |
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eligibility only: |
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(1) if that member applies in writing to the board for |
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extended eligibility on a date not earlier than the 30th day before |
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and not later than the 30th day after the date of becoming an |
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Active-Noncontributory member, setting forth the reason why the |
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member should be granted the extended eligibility; |
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(2) if the board, in its sole discretion, approves the |
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application for extended eligibility; and |
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(3) on the terms the board determines to be |
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appropriate. |
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SECTION 10. Article XIII, Chapter 452, Acts of the 72nd |
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Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's |
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Texas Civil Statutes), is amended by adding Section 13.02 to read as |
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follows: |
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Sec. 13.02. MANDATORY DISTRIBUTIONS PROHIBITED. A member |
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or former member who has separated from service may not be required |
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to receive an eligible rollover distribution, as defined in Section |
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13.01(b)(1) of this Act, without the member's consent unless the |
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member or former member is at least 70-1/2 years of age. |
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SECTION 11. This Act takes effect September 1, 2007. |