By: Keffer (Senate Sponsor - Averitt) H.B. No. 2400

(In the Senate - Received from the House April 24, 2007; April 26, 2007, read first time and referred to Committee on State Affairs; May 4, 2007, reported favorably by the following vote: Yeas 8, Nays 0; May 4, 2007, sent to printer.)

A BILL TO BE ENTITLED

AN ACT

relating to membership in, contributions to, benefits from, and administration of the Texas Emergency Services Retirement System.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 861, Government Code, is amended by adding Sections 861.008 and 861.009 to read as follows:

Sec. 861.008. IMMUNITY FROM LIABILITY. The state board, commissioner, and employees of the pension system are not liable for any action taken or omission made or suffered by them in good faith in the performance of any duty or prerogative in connection with the administration of the pension system.

Sec. 861.009. VENUE. An action in state court by or against the pension system shall be brought in Travis County.

SECTION 2. Section 862.002(a), Government Code, is amended to read as follows:

(a) Except as otherwise provided by this section and Section 862.0021, each person who performs service as a volunteer or auxiliary employee of a participating department is a member of the pension system.

SECTION 3. Chapter 862, Government Code, is amended by adding Section 862.0021 to read as follows:

Sec. 862.0021. PROBATIONARY PERIOD BEFORE MEMBERSHIP. (a) A participating department may impose a probationary period for a volunteer or auxiliary employee.

(b) A probationary period imposed under this section must end not later than six months after the date the person begins service with the participating department.

(c) The participating department is not required to pay contributions for the person during the probationary period.

(d) A person's membership in the pension system begins on the date that the department begins payment of contributions for that person, without regard to whether the person's service is subject to a probationary period for other purposes.

SECTION 4. Sections 864.004 and 864.005, Government Code, are amended to read as follows:

Sec. 864.004. DISABILITY RETIREMENT BENEFITS [ANNUITY]. (a) A member is entitled to disability retirement benefits from the pension system only if a local board determines that the member became disabled during the performance of emergency service duties and is unable to return to work at the member's regular occupation or, if the member is a student, is unable to return to the member's scholastic studies. A disabled member must, at the time of disability, elect between a service [or disability] retirement annuity or disability retirement benefits, if eligible for both.

(b) A disabled member described by Subsection (a) who does not elect to receive a service retirement annuity is entitled to [who is disabled during the performance of emergency service duties is automatically vested 100 percent as of the date of disability if the disability occurs before the member has completed the period provided under Section 864.001 for full service retirement benefits.

[(c) A member whose disability results from performing emergency service duties is guaranteed a] disability retirement benefits [annuity] of $300 a month or a greater amount that the state board by rule adopts based on monthly contributions of a participating department for its members.

(c) To continue to receive disability retirement benefits in the form of a continuing annuity, computed in the manner described by Subsection (b), a [(d) A] person who is determined by a local board to be temporarily disabled must:

(1) apply to the medical board appointed by the state board; [Social Security Administration] and

(2) [be certified,] not later than the first [second] anniversary of the date the person was determined to be temporarily disabled, be certified by the medical board as permanently disabled for the performance of the duties of the person's regular occupation [by that agency or by any alternative procedure the state board provides by rule].

Sec. 864.005. CERTIFICATION AND CONTINUANCE OF DISABILITY. (a) A local board shall require a member who is receiving temporary disability benefits to file a disability rating report every three months from a physician chosen by the local board. If a report indicates a significant improvement in [change of] condition, the local board, after notice and a hearing, may adopt an order to terminate payments [or place the member on permanent disability]. The local board shall send a copy of each order adopted under this subsection to the commissioner.

(b) Temporary disability [Disability] benefits cease if the recipient returns to work at the person's regular occupation, resumes scholastic studies, or performs emergency service duties for any agency, or if the local board adopts an order under Subsection (d).

(c) Subject to Subsection (d), temporary disability benefits cease on a date at the expiration of a period, not to exceed one year, determined to be the likely duration of the disability by a physician in a written statement to the pension system.

(d) If the local board has reason to believe that a ground for termination of temporary disability benefits exists, the local board may set a date for a hearing on the matter. The local board, after notice and a hearing, may adopt an order terminating temporary disability benefits if the local board determines that a ground for termination exists. The local board may not adopt an order under this subsection on the basis of a physician's previously submitted statement as to the likely duration of the disability if the local board determines, after a hearing, that the disability continues. The local board shall send a copy of each order adopted under this subsection to the commissioner.

(e) Payments of a continuing disability retirement annuity to a retiree certified by the medical board as permanently disabled under Section 864.004(c) cease if the retiree returns to work at the retiree's regular employment or performs emergency service duties.

(f) If the commissioner has reason to believe that a ground for termination of a continuing disability retirement annuity exists, the commissioner shall set a date for a hearing on continuation or termination of the annuity. The commissioner, after notice and a hearing, shall adopt an order terminating the continuing disability retirement annuity if the commissioner determines that a ground for termination exists.

(g) Except as provided by this subsection, a continuing disability retirement annuity terminates on the fifth anniversary of the date payment of the annuity begins. To continue receiving payments of a continuing disability retirement annuity after the fifth anniversary, the retiree must be recertified by the medical board as being permanently disabled for the performance of [becomes capable of performing the duties of the person's most recent position with a participating department or] the duties of any [another] occupation for which the person is reasonably suited by education, training, and experience and that could reasonably be expected to provide the person with at least 75 percent of the salary the person was earning at the time the disability occurred. Rejection of a suitable offer of employment as described in this subsection is conclusive evidence for purposes of this subtitle that the person is no longer eligible to receive disability retirement benefits[, if the employment would provide the person with a salary equal to or greater than the salary the person was earning at the time the disability occurred].

(h) [(c)] The state board or a local board may require financial information from a person as a condition to the continued receipt of disability retirement benefits, including federal income tax returns and wage earning forms. Failure to timely provide requested information is a ground for terminating benefits.

SECTION 5. Section 864.006(a), Government Code, is amended to read as follows:

(a) The surviving spouse and dependents of a member who dies as a result of performing emergency service duties are entitled to receive in equal shares a death benefit annuity equal to [two-thirds of] the service retirement annuity that the decedent would have been entitled to receive if the decedent had been able to retire, vested at 100 percent, on the date of the decedent's death. [As long as both the spouse and one or more dependents survive, an additional one-third of that annuity is payable to the dependents in equal shares.]

SECTION 6. Sections 864.007, 864.008, and 864.011, Government Code, are amended to read as follows:

Sec. 864.007. MEMBER NONSERVICE DEATH BENEFIT. The state board by rule may provide the beneficiary of a deceased member whose death did not result from the performance of emergency service duties a [lump-sum] benefit, which may be a lump-sum amount or an annuity [that is the greater of:

[(1) the amount contributed to the fund on the decedent's behalf; or

[(2) the sum that would have been contributed on the decedent's behalf from whatever source at the end of the period provided under Section 864.001 for full service retirement benefits].

Sec. 864.008. VESTED MEMBER DEATH BENEFIT ANNUITY. (a) The state board by rule may provide that the surviving spouse of a deceased member who dies as an active member of a participating department before retirement but after meeting the minimum age and service requirements for service retirement is entitled to a portion [two-thirds] of the monthly annuity that the decedent would have received if the decedent had retired on the date of death.

(b) The state board by rule may provide that the surviving spouse of a deceased member who dies after terminating service with all participating departments and meeting a service [vesting] requirement under Section 864.001 but before attaining the age of 55 is entitled to a death benefit annuity, in an amount to be determined by rule, beginning on the date that is the later of:

(1) the date that the decedent would have attained that age; or

(2) the date of application for the annuity [, equal to two-thirds of the monthly annuity to which the decedent would have been entitled on that date].

(c) A rule adopted under Subsection (b) may not authorize payment for a period before the date specified by that subsection.

Sec. 864.011. FIRST PAYMENT OF RETIREMENT OR DEATH BENEFIT ANNUITY. The cashing or depositing of the first payment of a service retirement annuity, disability retirement annuity, or death benefit annuity by a person entitled to it, or the receipt by a financial institution for credit to that person's account of a transfer of funds by the pension system through electronic means, is considered acceptance of the amount of the annuity and of the amount of service of the person on whose service the annuity is based [, if the annuity is based on the payee's service, is conclusive evidence for purposes of this subtitle that the payee is retired].

SECTION 7. Chapter 864, Government Code, is amended by adding Section 864.0135 to read as follows:

Sec. 864.0135. OPTIONAL ANNUITY INCREASE OR SUPPLEMENTAL PAYMENTS. (a) The state board by rule may authorize a participating department to:

(1) make one or more supplemental payments to retirees and other beneficiaries of the pension system; or

(2) provide an increase in the amount of annuities paid to retirees and other beneficiaries of the pension system.

(b) A participating department that elects an option under a rule adopted under this section shall fund all increased benefits that are provided to retirees and other beneficiaries of the department under the option.

SECTION 8. Sections 864.016(a), (c), and (d), Government Code, are amended to read as follows:

(a) A claim for disability retirement benefits or a lump-sum death benefit must be filed with the local board. A claim for service retirement benefits must be filed with the commissioner, who shall forward the claim to the appropriate local board for a hearing. A claim for a death benefit annuity must be filed with the commissioner, who shall make a determination of the merits of the claim and issue a decision to the claimant. On receiving a claim under this section, the local board shall hold a hearing to decide the claim. The local board shall send a written copy of its decision to the claimant and the commissioner. If a local board does not determine a claim for service retirement benefits and file its determination with the commissioner before the 16th day after the date the local board receives the claim, the commissioner may determine the merits of the claim.

(c) An appeal of a local board decision under this section is begun by delivering a notice of appeal to the presiding officer or secretary of the local board that made the decision. The notice must be delivered not later than the 20th day after the date of the decision and contain a brief description of the reasons for the appeal. The aggrieved person must file a copy of the notice with the commissioner.

(d) An appeal of a local board decision under this section is held in Austin and is a contested case under Chapter 2001, conducted as a de novo hearing by the State Office of Administrative Hearings.

SECTION 9. Section 865.010(c), Government Code, is amended to read as follows:

(c) The commissioner may request and administer [, in an emergency,] state funds appropriated by the legislature in addition to those required by this subtitle [and appropriated by the legislature].

SECTION 10. Section 864.015, Government Code, is repealed.

SECTION 11. (a) The change in law made by this Act to Sections 864.004 and 864.005, Government Code, does not apply to a person who, on the effective date of this Act, is receiving permanent disability retirement benefits under those sections as they existed immediately before amendment by this Act, and the prior law is continued in effect for this purpose.

(b) A person who, on the effective date of this Act, is receiving temporary disability benefits under Section 864.004, Government Code, as that section existed immediately before amendment by this Act, is entitled to receive temporary disability benefits in accordance with a certification made before the effective date of this Act. To continue to receive disability retirement benefits after September 1, 2008, the person must be certified, before September 1, 2008, as permanently disabled as provided by Section 864.005, Government Code, as amended by this Act, and is subject to the recertification requirement of that section.

SECTION 12. This Act takes effect September 1, 2007.

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