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A BILL TO BE ENTITLED
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AN ACT
|
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relating to the continuation and functions of the Teacher |
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Retirement System of Texas; providing penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 824.302, Government Code, is amended to |
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read as follows: |
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Sec. 824.302. ELIGIBILITY FOR DISABILITY RETIREMENT. |
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Subject to Section 824.310, a [A] member is eligible to retire and |
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receive a disability retirement annuity if the member: |
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(1) is mentally or physically disabled from the |
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further performance of duty; and |
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(2) has a [the] disability that is probably permanent. |
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SECTION 2. Sections 824.304(a), (b), and (d), Government |
|
Code, are amended to read as follows: |
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(a) Subject to Section 824.310, if [If] a member has a total |
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of less than 10 years of service credit in the retirement system on |
|
the date of disability retirement, the retirement system shall pay |
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the person a disability retirement annuity of $150 a month for the |
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shortest of the following periods: |
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(1) the duration of the disability; |
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(2) the number of months of creditable service the |
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person has at retirement; or |
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(3) the duration of the person's life. |
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(b) Subject to Section 824.310, if [If] a member has a total |
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of at least 10 years of service credit in the retirement system on |
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the date of disability retirement, the retirement system shall pay |
|
the person for the duration of the disability a disability |
|
retirement annuity in an amount equal to the greater of: |
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(1) a standard service retirement annuity computed |
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under Section 824.203; or |
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(2) $150 a month. |
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(d) The minimum benefits provided by this section are |
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subject to reduction under rules adopted under Section 824.310 and |
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are also subject to reduction in the same manner as other benefits |
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because of the selection of an optional retirement annuity. |
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SECTION 3. Section 824.308(b), Government Code, is amended |
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to read as follows: |
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(b) An optional disability retirement annuity is an annuity |
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payable throughout the disability of the disability retiree and is |
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actuarially reduced from the annuity otherwise payable under |
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Section 824.304(b), after any reduction under rules adopted under |
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Section 824.310, to its actuarial equivalent under the option |
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selected under Subsection (c). |
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SECTION 4. Subchapter D, Chapter 824, Government Code, is |
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amended by adding Section 824.310 to read as follows: |
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Sec. 824.310. PURPOSE OF DISABILITY BENEFIT; LIMIT ON |
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SUPPLEMENTAL INCOME. (a) The purpose of a disability retirement |
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annuity paid under this subchapter is to lessen the financial |
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hardships faced by a member with a disability. |
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(b) The board of trustees shall adopt rules under which the |
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disability retirement annuity paid to a disability retiree under |
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this subchapter is reduced on a sliding-scale basis or is suspended |
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for a period in which the compensation earned by the retiree for |
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work performed in a 12-month period during the disability |
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retirement, as determined under the rules of the board of trustees, |
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exceeds the compensation earned by the retiree during the 12-month |
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period in which the retiree earned the highest compensation for |
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actual service as a member of the retirement system. |
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(c) The rules adopted under Subsection (b) must provide for |
|
the partial or full reinstatement of a disability retirement |
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annuity that is reduced or suspended if the compensation earned by |
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the retiree for work performed during the disability retirement is |
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reduced or suspended. |
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(d) The board of trustees by rule shall require a disability |
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retiree to report to the board the amount of compensation earned by |
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the disability retiree that exceeds the amount established by the |
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board by rule for work performed during the disability. |
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SECTION 5. Sections 825.0032(c) and (e), Government Code, |
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are amended to read as follows: |
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(c) A person [paid officer, employee, or consultant of a
|
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Texas trade association in the field of investment or insurance] |
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may not be a trustee or an employee of the retirement system |
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employed in a "bona fide executive, administrative, or professional |
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capacity," as that phrase is used for purposes of establishing an |
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exemption to the overtime provisions of the federal Fair Labor |
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Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if: |
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(1) the person is a paid officer, employee, or |
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consultant of a Texas trade association in the field of investment |
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or insurance; or |
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(2) the person's spouse is a paid officer, employee, or |
|
consultant of a Texas trade association in the field of investment |
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or insurance [who is exempt from the state's position
|
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classification plan or is compensated at or above the amount
|
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prescribed by the General Appropriations Act for step 1, salary
|
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group 17, of the position classification salary schedule]. |
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(e) In [For the purposes of] this section, a Texas trade |
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association means [is] a [nonprofit,] cooperative[,] and |
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voluntarily joined association of business or professional |
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competitors in this state designed to assist its members and its |
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industry or profession in dealing with mutual business or |
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professional problems and in promoting their common interest. |
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SECTION 6. Section 825.0041, Government Code, is amended to |
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read as follows: |
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Sec. 825.0041. BOARD MEMBER TRAINING. (a) A person who is |
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appointed to and qualifies for office as a member of the board of |
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trustees may not vote, deliberate, or be counted as a member in |
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attendance at a meeting of the board until the person completes a |
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training program that complies with [Before a member of the board
|
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may assume the member's duties and, if applicable, before the
|
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member may be confirmed by the senate the member must complete at
|
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least one course of the training program established under] this |
|
section. |
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(b) A training program must [established under this section
|
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shall] provide the person with information [to the member] |
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regarding: |
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(1) the [enabling] legislation that created the |
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retirement system and the system's programs, functions, rules, and |
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budget [and its policy-making body to which the member is appointed
|
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to serve]; |
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(2) [the programs operated by the system;
|
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[(3)the role and functions of the system;
|
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[(4) the rules of the system with an emphasis on the
|
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rules that relate to disciplinary and investigatory authority;
|
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[(5)the current budget for the system;
|
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[(6)] the results of the most recent formal audit of |
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the system; |
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(3) [(7)] the requirements of laws relating to [the:
|
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[(A)] open meetings, public information, [law,
|
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Chapter 551;
|
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[(B)open records law, Chapter 552; and
|
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[(C)] administrative procedure, and conflicts of |
|
interest [law, Chapter 2001]; |
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[(8) the requirements of the conflict of interest laws
|
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and other laws relating to public officials;] and |
|
(4) [(9)] any applicable ethics policies adopted by |
|
the system or the Texas Ethics Commission. |
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(c) A person appointed to the board of trustees is entitled |
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to reimbursement under Section 825.007 for the travel expenses |
|
incurred in attending the training program regardless of whether |
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the attendance at the program occurs before or after the person |
|
qualifies for office. |
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SECTION 7. Section 825.006, Government Code, is amended to |
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read as follows: |
|
Sec. 825.006. SUNSET PROVISION. The board of trustees of |
|
the Teacher Retirement System of Texas is subject to review under |
|
Chapter 325 (Texas Sunset Act), but is not abolished under that |
|
chapter. The board shall be reviewed during the period in which |
|
state agencies abolished in 2019, and every 12th year after that |
|
year, [2007] are reviewed [or, if the retirement system's operating
|
|
expenses are not subject to the appropriations process on September
|
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1, 1995, the board shall be reviewed during the period in which
|
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state agencies abolished in 1997 are reviewed. This section
|
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expires September 1, 2007]. |
|
SECTION 8. Subchapter A, Chapter 825, Government Code, is |
|
amended by adding Section 825.0061 to read as follows: |
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Sec. 825.0061. COMPLIANCE WITH SUNSET RECOMMENDATIONS. (a) |
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The board of trustees shall: |
|
(1) comply with and implement the management action |
|
recommendations regarding the board of trustees adopted by the |
|
Sunset Advisory Commission on January 10, 2007, as a result of the |
|
commission's review of the retirement system; and |
|
(2) report to the Sunset Advisory Commission not later |
|
than November 1, 2008, the information the Sunset Advisory |
|
Commission requires regarding the board of trustees' |
|
implementation of the recommendations under Subdivision (1). |
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(b) This section expires June 1, 2009. |
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SECTION 9. Section 825.010(a), Government Code, is amended |
|
to read as follows: |
|
(a) It is a ground for removal from the board that [if] a |
|
trustee: |
|
(1) does not have at the time of taking office |
|
[appointment] the qualifications required for the trustee's |
|
position; |
|
(2) does not maintain during service on the board the |
|
qualifications required for the trustee's position; |
|
(3) violates a prohibition established by Section |
|
825.002(b) or 825.0032; |
|
(4) cannot because of illness or disability discharge |
|
the trustee's duties for a substantial part of the term for which |
|
the trustee is appointed; or |
|
(5) is absent from more than half [one-third] of the |
|
regularly scheduled board meetings that the person is eligible to |
|
attend during a calendar year without an excuse approved [unless
|
|
the absence is excused] by a majority vote of the board. |
|
SECTION 10. Subchapter B, Chapter 825, Government Code, is |
|
amended by adding Section 825.1025 to read as follows: |
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Sec. 825.1025. NEGOTIATED RULEMAKING; ALTERNATIVE DISPUTE |
|
RESOLUTION. (a) The board of trustees shall develop and implement |
|
a policy to encourage the use of: |
|
(1) negotiated rulemaking procedures under Chapter |
|
2008 for the adoption of the retirement system's rules; and |
|
(2) appropriate alternative dispute resolution |
|
procedures under Chapter 2009 to assist in the resolution of |
|
internal and external disputes under the retirement system's |
|
jurisdiction. |
|
(b) Subject to Subsection (d), the retirement system's |
|
procedures relating to alternative dispute resolution must |
|
conform, to the extent possible, to any model guidelines issued by |
|
the State Office of Administrative Hearings for the use of |
|
alternative dispute resolution by state agencies. |
|
(c) The board of trustees shall designate a trained person |
|
to: |
|
(1) coordinate the implementation of the policy |
|
adopted under Subsection (a); |
|
(2) serve as a resource for any training needed to |
|
implement the procedures for negotiated rulemaking or alternative |
|
dispute resolution; and |
|
(3) collect data concerning the effectiveness of those |
|
procedures, as implemented by the retirement system. |
|
(d) The board of trustees shall ensure that the |
|
implementation of this section and the negotiated rulemaking |
|
procedures and alternative dispute resolution procedures adopted |
|
under this section are consistent with the fiduciary responsibility |
|
imposed on the board by law. |
|
SECTION 11. Section 825.113, Government Code, is amended by |
|
adding Subsection (g) to read as follows: |
|
(g) The board of trustees shall implement a policy requiring |
|
the retirement system to use appropriate technological solutions to |
|
improve the retirement system's ability to perform its functions. |
|
The policy must ensure that the public is able to interact with the |
|
retirement system on the Internet. |
|
SECTION 12. Section 825.511, Government Code, is amended to |
|
read as follows: |
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Sec. 825.511. COMPLAINT FILES. (a) The retirement system |
|
shall maintain a system to promptly and efficiently act on |
|
complaints [keep an information file about each complaint] filed |
|
with the system that the system has authority to resolve. The |
|
system shall maintain information about parties to the complaint, |
|
the subject matter of the complaint, a summary of the results of the |
|
review or investigation of the complaint, and its disposition |
|
[provide to the person filing the complaint and the persons or
|
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entities complained about the system's policies and procedures
|
|
pertaining to complaint investigation and resolution. The system,
|
|
at least quarterly and until final disposition of the complaint,
|
|
shall notify the person filing the complaint and the persons or
|
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entities complained about of the status of the complaint unless the
|
|
notice would jeopardize an undercover investigation]. |
|
(b) The retirement system shall make information available |
|
describing its procedures for complaint investigation and |
|
resolution [keep information about each complaint filed with the
|
|
system. The information shall include:
|
|
[(1)the date the complaint is received;
|
|
[(2)the name of the complainant;
|
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[(3)the subject matter of the complaint;
|
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[(4) a record of all persons contacted in relation to
|
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the complaint;
|
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[(5) a summary of the results of the review or
|
|
investigation of the complaint; and
|
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[(6) for complaints for which the system took no
|
|
action, an explanation of the reason the complaint was closed
|
|
without action]. |
|
(c) The retirement system shall periodically notify the |
|
complaint parties of the status of the complaint until final |
|
disposition. |
|
SECTION 13. Chapter 825, Government Code, is amended by |
|
adding Subchapter G to read as follows: |
|
SUBCHAPTER G. MEMBER SERVICES |
|
Sec. 825.601. POLICIES GOVERNING RETIREMENT BENEFITS |
|
COUNSELING. The board of trustees shall adopt policies governing |
|
retirement benefits counseling provided to members by the system. |
|
The policies must: |
|
(1) address the manner in which the retirement system |
|
makes group and individual member retirement benefits counseling |
|
available throughout the state; |
|
(2) identify the geographic regions of the state most |
|
in need of retirement benefits counseling services and the manner |
|
in which that need will be met; and |
|
(3) clarify that the retirement system does not |
|
provide financial or legal advice. |
|
Sec. 825.602. RETIREMENT BENEFITS COUNSELING FOR |
|
INDIVIDUALS. (a) To the extent feasible, the retirement system |
|
shall make retirement benefits counseling for individual members |
|
available in conjunction with informational or educational |
|
programs concerning retirement planning that the system provides |
|
for groups. |
|
(b) The retirement system shall provide retirement benefits |
|
counseling for individual members in geographic regions of this |
|
state outside of Austin. |
|
SECTION 14. Sections 22.004(d) and (e), Education Code, are |
|
amended to read as follows: |
|
(d) Each district shall report the district's compliance |
|
with this section to the executive director of the Teacher |
|
Retirement System of Texas not later than March 1 of each |
|
even-numbered year in the manner required by the board of trustees |
|
of the Teacher Retirement System of Texas. For a district that does |
|
not participate in the program described by Subsection (a), the |
|
report must be available for review, together with the policy or |
|
contract for the group health coverage plan, at the central |
|
administrative office of each campus in the district and be posted |
|
on the district's Internet website if the district maintains a |
|
website, must be based on the district group health coverage plan in |
|
effect during the current plan year, and must include: |
|
(1) appropriate documentation of: |
|
(A) the district's contract for group health |
|
coverage with a provider licensed to do business in this state by |
|
the Texas Department of Insurance or a risk pool authorized under |
|
Chapter 172, Local Government Code; or |
|
(B) a resolution of the board of trustees of the |
|
district authorizing a self-insurance plan for district employees |
|
and of the district's review of district ability to cover the |
|
liability assumed; |
|
(2) the schedule of benefits; |
|
(3) the premium rate sheet, including the amount paid |
|
by the district and employee; |
|
(4) the number of employees covered by the health |
|
coverage plan offered by the district; [and] |
|
(5) information concerning the ease of completing the |
|
report, as required by the executive director of the Teacher |
|
Retirement System of Texas; and |
|
(6) any other information considered appropriate by |
|
the executive director of the Teacher Retirement System of Texas. |
|
(e) The [Based on the criteria prescribed by Subsection (b),
|
|
the] executive director of the Teacher Retirement System of Texas |
|
[shall, for each district that does not participate in the program
|
|
described by Subsection (a), certify whether a district's coverage
|
|
is comparable to the basic health coverage provided under Chapter
|
|
1551, Insurance Code. If the executive director of the Teacher
|
|
Retirement System of Texas determines that the group health
|
|
coverage offered by a district is not comparable, the executive
|
|
director shall report that information to the district and to the
|
|
Legislative Budget Board. The executive director] shall submit a |
|
report to the legislature not later than September 1 of each |
|
even-numbered year describing the status of each district's group |
|
health coverage program based on the information contained in the |
|
report required by Subsection (d) [and the certification required
|
|
by this subsection]. The retirement system shall post the report on |
|
the Internet website maintained by the system. |
|
SECTION 15. Section 1575.004(a), Insurance Code, is amended |
|
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) has taken a service retirement under the |
|
Teacher Retirement System of Texas after September 1, 2005, 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, and either: |
|
(i) the sum of the retiree's age and years |
|
of service credit in the retirement system equals or exceeds 80 at |
|
the time of retirement, regardless of whether the retiree had a |
|
reduction in the retirement annuity for early age; or |
|
(ii) the retiree has 30 or more years of |
|
service credit in the retirement system at the time of retirement; |
|
(B) has taken a service retirement under the |
|
Teacher Retirement System of Texas after September 1, 2004, but on |
|
or before August 31, 2005, and on September 1, 2005, either: |
|
(i) meets the requirements for eligibility |
|
for the group program for coverage as a retiree as those |
|
requirements existed on August 31, 2004; |
|
(ii) meets the requirements of Paragraph |
|
(A); or |
|
(iii) is enrolled in the group program and |
|
was enrolled in the group program on August 31, 2005; or |
|
(C) 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, 2005; [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; or |
|
(3) an individual who: |
|
(A) has taken a disability retirement under the |
|
Teacher Retirement System of Texas; |
|
(B) has at least 10 years of service credit in the |
|
Teacher Retirement System of Texas on the date of disability |
|
retirement, as determined under Section 824.304, Government Code; |
|
and |
|
(C) is not entitled to receive monthly benefits |
|
from the Teacher Retirement System of Texas because those benefits |
|
have been suspended in accordance with Section 824.310, Government |
|
Code. |
|
SECTION 16. Subchapter E, Chapter 1575, Insurance Code, is |
|
amended by adding Section 1575.213 to read as follows: |
|
Sec. 1575.213. CERTAIN DISABILITY RETIREES. An individual |
|
who is eligible as a retiree under Section 1575.004(a)(3) shall pay |
|
an additional premium in an amount determined by the trustee. The |
|
amount of the premium may not exceed the total cost, as determined |
|
by the trustee, attributable to the participation of that retiree |
|
and the dependents of that retiree during the period the individual |
|
is eligible as a retiree under Section 1575.004(a)(3). |
|
SECTION 17. Section 4, Chapter 22, Acts of the 57th |
|
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's |
|
Texas Civil Statutes), is amended to read as follows: |
|
Sec. 4. In this section and in Sections 5, 6, 7, 8, 8A, 9, |
|
10, [and] 11, 12, and 13 of this Act: |
|
(1) "Board of trustees" means the board of trustees of |
|
the Teacher Retirement System of Texas. |
|
(2) "Educational institution" means a school district |
|
or an open-enrollment charter school. |
|
(3) "Eligible qualified investment" means a qualified |
|
investment product offered by a company that: |
|
(A) is certified to the board of trustees under |
|
Section 5 of this Act; or |
|
(B) is eligible to certify to the board of |
|
trustees under Section 8 of this Act. |
|
(4) "Employee" means an employee of an educational |
|
institution. |
|
(5) "Qualified investment product" means an annuity or |
|
investment that: |
|
(A) meets the requirements of Section 403(b), |
|
Internal Revenue Code of 1986, and its subsequent amendments; |
|
(B) complies with applicable federal insurance |
|
and securities laws and regulations; and |
|
(C) complies with applicable state insurance and |
|
securities laws and rules. |
|
(6) "Retirement system" means the Teacher Retirement |
|
System of Texas. |
|
(7) "Salary reduction agreement" means an agreement |
|
between an educational institution and an employee to reduce the |
|
employee's salary for the purpose of making direct contributions to |
|
or purchases of a qualified investment product. |
|
SECTION 18. Section 5(a), Chapter 22, Acts of the 57th |
|
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's |
|
Texas Civil Statutes), is amended to read as follows: |
|
(a) An educational institution may enter into a salary |
|
reduction agreement with an employee of the institution only if the |
|
qualified investment product: |
|
(1) is an eligible qualified investment; and |
|
(2) is registered with the retirement system under |
|
Section 8A of this Act. |
|
SECTION 19. Sections 6(c), (e), and (h), Chapter 22, Acts of |
|
the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5, |
|
Vernon's Texas Civil Statutes), are amended to read as follows: |
|
(c) After consultation with the Texas Department of |
|
Insurance and the State Securities Board, the retirement system may |
|
adopt rules only to administer this section and Sections 5, 7, 8, |
|
8A, [and] 11, 12, and 13 of this Act. |
|
(e) The Texas Department of Insurance and the State |
|
Securities Board shall cooperate with the retirement system in the |
|
administration of this Act and shall notify the retirement system |
|
of any action or determination regarding a product or a company that |
|
violates Section 5 or 8A of this Act. |
|
(h) A certification or recertification remains in effect |
|
for five years unless denied, suspended, [rejected] or revoked. |
|
SECTION 20. Section 7(a), Chapter 22, Acts of the 57th |
|
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's |
|
Texas Civil Statutes), is amended to read as follows: |
|
(a) The retirement system may collect a fee, not to exceed |
|
the administrative cost to the retirement system, from a company |
|
that certifies or recertifies under Section 6 or 8 of this Act or |
|
that registers a qualified investment product under Section 8A. |
|
The fee for certification or recertification may not exceed $5,000. |
|
The fee for registration of a qualified investment product must be |
|
set by the retirement system in the reasonable amount necessary to |
|
recover the cost to the system of administering Section 8A of this |
|
Act. |
|
SECTION 21. Chapter 22, Acts of the 57th Legislature, 3rd |
|
Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil |
|
Statutes), is amended by adding Section 8A to read as follows: |
|
Sec. 8A. (a) A qualified investment product offered to an |
|
employee under Section 5 of this Act must be an eligible qualified |
|
investment registered with the retirement system under this |
|
section. To register a product, the company offering the product |
|
must submit an application to the retirement system in accordance |
|
with this section and pay the registration fee established under |
|
Section 7 of this Act. |
|
(b) The retirement system shall adopt the form and content |
|
of the registration application. |
|
(c) The retirement system shall designate not more than two |
|
registration periods each year during which a company may apply to |
|
register a qualified investment product and add the product to the |
|
list of qualified investment products maintained under Subsection |
|
(f) of this section. To register a qualified investment product, a |
|
company must submit an application for a designated registration |
|
period in the manner required by the retirement system. |
|
(d) A company that registers a qualified investment product |
|
under this section shall notify the retirement system if, at any |
|
time, the product is not an eligible qualified investment. |
|
(e) A registration under this section remains in effect for |
|
five years unless denied, suspended, or revoked. |
|
(f) The retirement system shall establish and maintain a |
|
list of qualified investment products that are registered under |
|
this section. The list must include information concerning all the |
|
fees charged in connection with each registered qualified |
|
investment product and the sale and administration of the product. |
|
The list must include other information concerning each product as |
|
determined by the retirement system. In implementing the list, the |
|
retirement system shall take action to avoid increasing the amount |
|
of work required of educational institutions, which may include |
|
assigning a unique identifying number to each product. The list |
|
must be available on the retirement system's Internet website. |
|
SECTION 22. Section 9, Chapter 22, Acts of the 57th |
|
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's |
|
Texas Civil Statutes), is amended to read as follows: |
|
Sec. 9. An educational institution may not: |
|
(1) refuse to enter into a salary reduction agreement |
|
with an employee if the qualified investment product that is the |
|
subject of the salary reduction is an eligible qualified investment |
|
and is registered with the system under Section 8A; |
|
(2) require or coerce an employee's attendance at any |
|
meeting at which qualified investment products are marketed; |
|
(3) limit the ability of an employee to initiate, |
|
change, or terminate a qualified investment product at any time the |
|
employee chooses; |
|
(4) grant exclusive access to an employee by |
|
discriminating against or imposing barriers to any agent, broker, |
|
or company that provides qualified investment products under this |
|
Act; |
|
(5) grant exclusive access to information about an |
|
employee's financial information, including information about an |
|
employee's qualified investment products, to a company or agent |
|
offering qualified investment products unless the employee |
|
consents in writing to the access; |
|
(6) accept any benefit from a company or from an agent |
|
or affiliate of a company that offers qualified investment |
|
products; or |
|
(7) use public funds to recommend a qualified |
|
investment product offered by a company or an agent of a company |
|
that offers a qualified investment product. |
|
SECTION 23. Section 10(a), Chapter 22, Acts of the 57th |
|
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's |
|
Texas Civil Statutes), is amended to read as follows: |
|
(a) A person commits an offense if the person: |
|
(1) sells or offers for sale a qualified investment |
|
product that is not an eligible qualified investment or that is not |
|
registered under Section 8A of this Act and that the person knows |
|
will be the subject of a salary reduction agreement; |
|
(2) violates the licensing requirements of Title 13 |
|
[Subchapter A, Chapter 21], Insurance Code, with regard to a |
|
qualified investment product that the person knows will be the |
|
subject of a salary reduction agreement; or |
|
(3) engages in activity described by Subchapter B, |
|
Chapter 541 [Section 4, Article 21.21], Insurance Code, with regard |
|
to a qualified investment product that the person knows will be the |
|
subject of a salary reduction agreement. |
|
SECTION 24. Section 11(c), Chapter 22, Acts of the 57th |
|
Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's |
|
Texas Civil Statutes), is amended to read as follows: |
|
(c) The notice required under this section must be uniform |
|
and: |
|
(1) be in at least 14-point type; |
|
(2) contain spaces for: |
|
(A) the name, address, and telephone number of |
|
the agent and company offering the annuity contract for sale; |
|
(B) the name, address, and telephone number of |
|
the company underwriting the annuity; |
|
(C) the license number of the person offering to |
|
sell the product; |
|
(D) the name of the state agency that issued the |
|
person's license; |
|
(E) the name of the company account |
|
representative who has the authority to respond to inquiries or |
|
complaints; and |
|
(F) with respect to fixed annuity products: |
|
(i) the current interest rate or the |
|
formula used to calculate the current rate of interest; |
|
(ii) the guaranteed rate of interest and |
|
the percentage of the premium to which the interest rate applies; |
|
(iii) how interest is compounded; |
|
(iv) the amount of any up-front, surrender, |
|
withdrawal, deferred sales, and market value adjustment charges or |
|
any other contract restriction that exceeds 10 years; |
|
(v) the time, if any, the annuity is |
|
required to be in force before the purchaser is entitled to the full |
|
bonus accumulation value; |
|
(vi) the manner in which the amount of the |
|
guaranteed benefit under the annuity is computed; |
|
(vii) whether loans are guaranteed to be |
|
available under the annuity; |
|
(viii) what restrictions, if any, apply to |
|
the availability of money attributable to the value of the annuity |
|
once the purchaser is retired or separated from the employment of |
|
the employer; |
|
(ix) the amount of any other fees, costs, or |
|
penalties; |
|
(x) whether the annuity guarantees the |
|
participant the right to surrender a percentage of the surrender |
|
value each year, and the percentage, if any; and |
|
(xi) whether the annuity guarantees the |
|
interest rate associated with any settlement option; and |
|
(3) state, in plain language: |
|
(A) that the company offering the annuity must |
|
comply with Section 5 of this Act and that the annuity must be a |
|
qualified investment product registered under Section 8A of this |
|
Act; |
|
(B) that the potential purchaser may contact the |
|
retirement system or access its Internet website to determine which |
|
companies are in compliance with Section 5 of this Act and which |
|
qualified investment products are registered under Section 8A of |
|
this Act; |
|
(C) the civil remedies available to the employee; |
|
(D) that the employee may purchase any eligible |
|
qualified investment through a salary reduction agreement; |
|
(E) the name and telephone number of the Texas |
|
Department of Insurance division that specializes in consumer |
|
protection; and |
|
(F) the name and telephone number of the attorney |
|
general's division that specializes in consumer protection. |
|
SECTION 25. Chapter 22, Acts of the 57th Legislature, 3rd |
|
Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil |
|
Statutes), is amended by adding Section 13 to read as follows: |
|
Sec. 13. (a) The board of trustees may deny, suspend, or |
|
revoke the certification or recertification of a company if the |
|
company violates Section 5, 6, 7, 8, 8A, 10, 11, or 12 of this Act or |
|
a rule adopted under those sections. |
|
(b) The board of trustees may deny, suspend, or revoke the |
|
registration of an investment product under this section if: |
|
(1) the product is not an eligible qualified |
|
investment; |
|
(2) the offer of the product violates Section 5, 6, 7, |
|
8, 8A, 10, 11, or 12 of this Act or a rule adopted under those |
|
sections; or |
|
(3) the company that offers the product violates |
|
Section 5, 6, 7, 8, 8A, 10, 11, or 12 of this Act or a rule adopted |
|
under those sections. |
|
(c) A proceeding to suspend or revoke a certification, |
|
recertification, or registration under this section is a contested |
|
case under Chapter 2001, Government Code. |
|
SECTION 26. Section 17.46(b), Business & Commerce Code, is |
|
amended to read as follows: |
|
(b) Except as provided in Subsection (d) of this section, |
|
the term "false, misleading, or deceptive acts or practices" |
|
includes, but is not limited to, the following acts: |
|
(1) passing off goods or services as those of another; |
|
(2) causing confusion or misunderstanding as to the |
|
source, sponsorship, approval, or certification of goods or |
|
services; |
|
(3) causing confusion or misunderstanding as to |
|
affiliation, connection, or association with, or certification by, |
|
another; |
|
(4) using deceptive representations or designations |
|
of geographic origin in connection with goods or services; |
|
(5) representing that goods or services have |
|
sponsorship, approval, characteristics, ingredients, uses, |
|
benefits, or quantities which they do not have or that a person has |
|
a sponsorship, approval, status, affiliation, or connection which |
|
he does not; |
|
(6) representing that goods are original or new if |
|
they are deteriorated, reconditioned, reclaimed, used, or |
|
secondhand; |
|
(7) representing that goods or services are of a |
|
particular standard, quality, or grade, or that goods are of a |
|
particular style or model, if they are of another; |
|
(8) disparaging the goods, services, or business of |
|
another by false or misleading representation of facts; |
|
(9) advertising goods or services with intent not to |
|
sell them as advertised; |
|
(10) advertising goods or services with intent not to |
|
supply a reasonable expectable public demand, unless the |
|
advertisements disclosed a limitation of quantity; |
|
(11) making false or misleading statements of fact |
|
concerning the reasons for, existence of, or amount of price |
|
reductions; |
|
(12) representing that an agreement confers or |
|
involves rights, remedies, or obligations which it does not have or |
|
involve, or which are prohibited by law; |
|
(13) knowingly making false or misleading statements |
|
of fact concerning the need for parts, replacement, or repair |
|
service; |
|
(14) misrepresenting the authority of a salesman, |
|
representative or agent to negotiate the final terms of a consumer |
|
transaction; |
|
(15) basing a charge for the repair of any item in |
|
whole or in part on a guaranty or warranty instead of on the value of |
|
the actual repairs made or work to be performed on the item without |
|
stating separately the charges for the work and the charge for the |
|
warranty or guaranty, if any; |
|
(16) disconnecting, turning back, or resetting the |
|
odometer of any motor vehicle so as to reduce the number of miles |
|
indicated on the odometer gauge; |
|
(17) advertising of any sale by fraudulently |
|
representing that a person is going out of business; |
|
(18) advertising, selling, or distributing a card |
|
which purports to be a prescription drug identification card issued |
|
under Section 4151.152, Insurance Code, in accordance with rules |
|
adopted by the commissioner of insurance, which offers a discount |
|
on the purchase of health care goods or services from a third party |
|
provider, and which is not evidence of insurance coverage, unless: |
|
(A) the discount is authorized under an agreement |
|
between the seller of the card and the provider of those goods and |
|
services or the discount or card is offered to members of the |
|
seller; |
|
(B) the seller does not represent that the card |
|
provides insurance coverage of any kind; and |
|
(C) the discount is not false, misleading, or |
|
deceptive; |
|
(19) using or employing a chain referral sales plan in |
|
connection with the sale or offer to sell of goods, merchandise, or |
|
anything of value, which uses the sales technique, plan, |
|
arrangement, or agreement in which the buyer or prospective buyer |
|
is offered the opportunity to purchase merchandise or goods and in |
|
connection with the purchase receives the seller's promise or |
|
representation that the buyer shall have the right to receive |
|
compensation or consideration in any form for furnishing to the |
|
seller the names of other prospective buyers if receipt of the |
|
compensation or consideration is contingent upon the occurrence of |
|
an event subsequent to the time the buyer purchases the merchandise |
|
or goods; |
|
(20) representing that a guarantee or warranty confers |
|
or involves rights or remedies which it does not have or involve, |
|
provided, however, that nothing in this subchapter shall be |
|
construed to expand the implied warranty of merchantability as |
|
defined in Sections 2.314 through 2.318 and Sections 2A.212 through |
|
2A.216 to involve obligations in excess of those which are |
|
appropriate to the goods; |
|
(21) promoting a pyramid promotional scheme, as |
|
defined by Section 17.461; |
|
(22) representing that work or services have been |
|
performed on, or parts replaced in, goods when the work or services |
|
were not performed or the parts replaced; |
|
(23) filing suit founded upon a written contractual |
|
obligation of and signed by the defendant to pay money arising out |
|
of or based on a consumer transaction for goods, services, loans, or |
|
extensions of credit intended primarily for personal, family, |
|
household, or agricultural use in any county other than in the |
|
county in which the defendant resides at the time of the |
|
commencement of the action or in the county in which the defendant |
|
in fact signed the contract; provided, however, that a violation of |
|
this subsection shall not occur where it is shown by the person |
|
filing such suit he neither knew or had reason to know that the |
|
county in which such suit was filed was neither the county in which |
|
the defendant resides at the commencement of the suit nor the county |
|
in which the defendant in fact signed the contract; |
|
(24) failing to disclose information concerning goods |
|
or services which was known at the time of the transaction if such |
|
failure to disclose such information was intended to induce the |
|
consumer into a transaction into which the consumer would not have |
|
entered had the information been disclosed; |
|
(25) using the term "corporation," "incorporated," or |
|
an abbreviation of either of those terms in the name of a business |
|
entity that is not incorporated under the laws of this state or |
|
another jurisdiction; |
|
(26) selling, offering to sell, or illegally promoting |
|
an annuity contract under Chapter 22, Acts of the 57th Legislature, |
|
3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil |
|
Statutes), with the intent that the annuity contract will be the |
|
subject of a salary reduction agreement, as defined by that Act, if |
|
the annuity contract is not an eligible qualified investment under |
|
that Act or is not registered with the Teacher Retirement System of |
|
Texas as required by Section 8A of that Act; or |
|
(27) taking advantage of a disaster declared by the |
|
governor under Chapter 418, Government Code, by: |
|
(A) selling or leasing fuel, food, medicine, or |
|
another necessity at an exorbitant or excessive price; or |
|
(B) demanding an exorbitant or excessive price in |
|
connection with the sale or lease of fuel, food, medicine, or |
|
another necessity. |
|
SECTION 27. Section 825.0032(d), Government Code, is |
|
repealed. |
|
SECTION 28. The changes in law made by Sections 824.302, |
|
824.304, and 824.308, Government Code, and Section 1575.004, |
|
Insurance Code, as amended by this Act, and by Section 824.310, |
|
Government Code, and Section 1575.213, Insurance Code, as added by |
|
this Act, apply only to the disability retirement annuity of a |
|
person who applies for the annuity on or after the effective date of |
|
this Act. The disability retirement annuity of a person who applies |
|
for the annuity before the effective date of this Act is governed by |
|
the law as it existed immediately before the effective date of this |
|
Act, and that law is continued in effect for that purpose. |
|
SECTION 29. The changes in law made by this Act by the |
|
amendment of Sections 825.0032, 825.0041, and 825.010, Government |
|
Code, regarding the prohibitions on, qualifications of, and |
|
training for members of the board of trustees of the Teacher |
|
Retirement System of Texas do not affect the entitlement of a member |
|
serving on the board immediately before September 1, 2007, to |
|
continue to serve and function as a member of the board for the |
|
remainder of the member's term. The changes in law described by |
|
this section apply only to a member appointed on or after September |
|
1, 2007. |
|
SECTION 30. The change in law made by this Act to Chapter |
|
22, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article |
|
6228a-5, Vernon's Texas Civil Statutes), applies only to the offer |
|
of a qualified investment product in accordance with that Act on or |
|
after January 1, 2008. The offer of a qualified investment product |
|
before January 1, 2008, is governed by the law as it existed |
|
immediately before the effective date of this Act, and that law is |
|
continued in effect for that purpose. |
|
SECTION 31. The change in law made by this Act to Section |
|
10(a), Chapter 22, Acts of the 57th Legislature, 3rd Called |
|
Session, 1962 (Article 6228a-5, Vernon's Texas Civil Statutes), |
|
applies only to an offense committed on or after January 1, 2008. |
|
For purposes of this section, an offense is committed before |
|
January 1, 2008, if any element of the offense occurs before that |
|
date. An offense committed before January 1, 2008, is covered by |
|
the law in effect when the offense was committed, and the former law |
|
is continued in effect for that purpose. |
|
SECTION 32. Section 17.46(b), Business & Commerce Code, as |
|
amended by this Act, applies only to a cause of action that accrues |
|
on or after January 1, 2008. A cause of action that accrues before |
|
January 1, 2008, is governed by the law as it existed immediately |
|
before the effective date of this Act, and that law is continued in |
|
effect for that purpose. |
|
SECTION 33. This Act takes effect September 1, 2007. |