H.B. No. 3355
 
 
 
 
AN ACT
  relating to the board of trustees, benefits, and contributions of
  certain fire and police pension funds.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  CONTINGENT PROVISIONS EFFECTIVE SEPTEMBER 1, 2007
         SECTION 1.01.  Sections 1(a) and (b), Chapter 101, Acts of
  the 43rd Legislature, 1st Called Session, 1933 (Article 6243b,
  Vernon's Texas Civil Statutes), are amended to read as follows:
         (a)  In all incorporated cities and towns containing more
  than 550,000 inhabitants and less than 600,000 inhabitants, having
  a fully or partially paid fire department, three (3) citizens of
  said city or town to be designated by the mayor [or the mayor's
  authorized representative], two (2) citizens of said city or town
  to be designated by the city manager of said city or town [mayor,
  the chief of police or the chief's authorized representative, the
  chief of the fire department or the chief's authorized
  representative, and the successors of the mayor, chief of police,
  and chief of the fire department], three (3) policemen [other than
  the chief or assistant chief,] to be elected by members of the
  policemen's pension fund, and three (3) firemen [other than the
  chief or assistant chief,] to be elected by members of the firemen's
  pension fund, composing eleven (11) members, seven (7) of which
  shall be a quorum, shall constitute a board of trustees of the
  Firemen and Policemen Pension Fund, to provide for the disbursement
  of the same and to designate the beneficiaries thereof. [The three
  policemen and the three firemen named above shall be elected to a
  term of four (4) years. The term for a citizen designated by the
  mayor is four (4) years.] The board shall be known as the Board of
  Firemen and Policemen Pension Fund, __________, Texas. Said board
  shall organize by choosing one member as Chairman and by appointing
  a secretary. Such board shall have charge of and administer said
  fund and shall order payments therefrom in pursuance of the
  provisions of this law. It shall report annually to the governing
  body of such city or town the condition of the said fund and the
  receipts and disbursements on account of the same with a complete
  list of beneficiaries of said fund and the amounts paid them.
         (b)  The members of the board of trustees serve four-year
  terms. [Of the first two (2) citizens designated by the mayor to
  serve on the board of trustees after the effective date of this
  subsection, one shall serve a four-year term and the other a
  two-year term. Thereafter all terms shall be for four (4) years.
  Of the first six (6) firemen and policemen elected after the
  effective date of this subsection, three (3) of the firemen and
  policemen shall serve four-year terms and three (3) of the firemen
  and policemen shall serve two-year terms. The first four-year
  terms shall not be served by all three members elected from the
  firemen's fund nor by all three members elected from the policemen's
  fund. This determination shall be made by lot under the supervision
  of the board. Thereafter all elected terms shall be for four (4)
  years.]
         SECTION 1.02.  Section 2, Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         Sec. 2.  PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each
  member fireman and policeman in the employment of such city or town
  must participate in said fund, except in times of national
  emergency those persons as are employed during that time shall not
  be required to participate in the fund, and said city or town shall
  be authorized to deduct a sum of not less than one per cent (1%) nor
  in excess of six per cent (6%) of his wages from each month to form a
  part of the fund known as the Firemen and Policemen Pension Fund,
  except that the city or town shall deduct a sum less than one per
  cent (1%) or more than six per cent (6%) of the member's wages each
  month to form a part of the fund if the board of trustees of that
  fund increases or decreases the percentage of wages to be
  contributed to the fund under the provisions of Section 10A or 14A
  of this Act. The amount to be deducted from the wages of those named
  above who must participate in the fund is to be determined by the
  board of trustees as provided for in Section 1 of this Act within
  the minimum and maximum deductions herein provided or as otherwise
  provided under the provisions of Section 10A or 14A of this Act.
         SECTION 1.03.  Section 3, Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         Sec. 3.  PAYMENTS TO FUND.  There shall be deducted for such
  fund from the wages of each fireman and policeman a sum to be
  determined by the board of trustees under the provisions of
  Sections [Section] 2, [or] 10A, and 14A of this Act. Any donations
  made to such fund and rewards received by any member of either of
  said funds, and all funds received from any source for such fund
  shall be deposited in like manner to the credit of such fund.
         SECTION 1.04.  Section 10A, Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         Sec. 10A.  MODIFICATION OF BENEFITS, MEMBERSHIP
  QUALIFICATIONS, ELIGIBILITY REQUIREMENTS AND CONTRIBUTIONS;
  CONDITIONS.  (a)  Notwithstanding anything to the contrary in other
  parts of this Act and subject to Subsections (b) and (c) of this
  section, the Board of Trustees may, by majority vote of the whole
  board, make from time to time one or more of the following changes,
  or modifications:
               (1)  modify or change prospectively or retroactively in
  any manner whatsoever any of the benefits provided by this Act,
  except that any retroactive change or modification shall only
  increase pensions or benefits;
               (2)  modify or change prospectively in any manner
  whatsoever any of the membership qualifications;
               (3)  modify or change prospectively or retroactively in
  any manner whatsoever any of the eligibility requirements for
  pensions or benefits;
               (4)  increase or decrease prospectively the percentage
  of wages less than the one per cent (1%) minimum or above the six per
  cent (6%) maximum provided in Section 2 of this Act to be
  contributed to the fund; or
               (5)  provide prospectively for refunds, in whole or in
  part, and with or without interest, of contributions made to the
  fund by employees who leave the city service before qualifying for a
  pension.
         (b)  None of the changes made under Subsection (a) of this
  section may be made unless all of the following conditions are
  sequentially complied with:
               (1)  the change must be approved by a qualified actuary
  selected by a four-fifths vote of the Board; the actuary's approval
  must be based on an actuarial finding that the change is supported
  by the existing funding status of the fund; the actuary, if an
  individual, must be a Fellow of the Society of Actuaries or a Fellow
  of the Conference of Actuaries in Public Practice or a Member of the
  American Academy of Actuaries; the actuary, if an actuarial
  consulting firm, must be established in the business of providing
  actuarial consulting services to pension plans and have experienced
  personnel able to provide the requested services; the findings upon
  which the properly selected and qualified actuary's approval are
  based are not subject to judicial review;
               (2)  the change must be approved by a majority of all
  persons then making contributions to the fund as employees of a
  department to which the change would directly apply, voting by
  secret ballot at an election held after ten (10) days' notice given
  by posting at a prominent place in every station or substation of a
  department to which the change would directly apply and in the city
  hall;
               (3)  the changes, except changes made under the
  provisions of Subdivision (1), Subsection (a), of this section,
  shall apply only to active member employees who are members of the
  affected departments at the time the change becomes effective and
  those who enter the departments thereafter; and
               (4)  the changes shall not deprive any person, without
  his written consent, of any right to receive a pension or benefits
  which have already become vested and matured.
         (c)  If the Board of Trustees proposes to change benefits
  under Subdivision (1), Subsection (a), of this section, the change
  is not effective until the change is finally approved in accordance
  with this subsection. The Board shall submit the change for
  approval by the city's or town's governing body. If disapproved by
  the governing body, or if the governing body fails to act within
  sixty (60) days of presentation to the governing body, the Board, by
  resolution passed by a majority of the whole Board, plus one, may
  require the city's or town's governing body to hold an election, as
  soon as practicable, for approval of the change by the qualified
  voters of the city or town. Any change proposed and subsequently
  approved by the voters under this subsection becomes effective as
  of the beginning of the city's or town's next fiscal year.
         SECTION 1.05.  Chapter 101, Acts of the 43rd Legislature,
  1st Called Session, 1933 (Article 6243b, Vernon's Texas Civil
  Statutes), is amended by adding Section 14A to read as follows:
         Sec. 14A.  CONTRIBUTION INCREASES.  (a)  If at any time a
  qualified actuary that meets the requirements of Subdivision (1),
  Subsection (b), Section 10A of this Act, determines that the total
  contribution rate, expressed as a percentage of wages, is
  insufficient to amortize the unfunded actuarial accrued liability,
  as defined under the Governmental Accounting Standards Board
  Statement No. 25, over a period not to exceed forty (40) years:
               (1)  the city's or town's governing body may increase
  the city or town contribution rate; and
               (2)  to the extent that the city or town contribution
  rate increases under Subdivision (1) of this subsection, the member
  contribution rate must increase by an amount equal to the member
  contribution rate before the increase multiplied by a fraction:
                     (A)  the numerator of which is the increase in the
  amount of city or town contribution rate; and
                     (B)  the denominator of which is the amount of the
  city or town contribution rate before the increase.
         (b)  The sum of the city or town contribution rate and the
  member contribution rate after an increase under this section may
  not exceed the total contribution rate determined by the qualified
  actuary to be necessary to amortize the unfunded actuarial accrued
  liability over a forty (40) year period.
         SECTION 1.06.  (a)  In this section:
               (1)  "Board of trustees" means a board of trustees
  constituted under Section 1(a), Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes).
               (2)  "City or town" means a city or town that operates a
  Firemen and Policemen Pension Fund under Chapter 101, Acts of the
  43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes).
         (b)  The two citizen members of the board of trustees who are
  designated by the mayor of the city or town and who are serving on
  the board of trustees on the effective date of this article shall
  continue to serve for the remainder of the members' four-year
  terms.
         (c)  The mayor of the city or town or the mayor's authorized
  representative who is serving on the board of trustees on the
  effective date of this article shall continue to serve until the
  mayor appoints a third citizen member under this subsection.  As
  soon as practicable after the effective date of this article, the
  mayor shall appoint a citizen member to serve a four-year term.
         (d)  The chief of police or the chief's authorized
  representative and the chief of the fire department or the chief's
  authorized representative who are serving on the board of trustees
  on the effective date of this article shall continue to serve until
  the city manager of the city or town appoints two citizen members to
  the board of trustees under this subsection. As soon as practicable
  after the effective date of this article, the city manager shall
  appoint the two citizen members. The city manager shall designate
  one citizen member appointed under this subsection to serve a
  four-year term and, notwithstanding Section 1(b), Chapter 101, Acts
  of the 43rd Legislature, 1st Called Session, 1933 (Article 6243b,
  Vernon's Texas Civil Statutes), as amended by this article, shall
  designate one citizen member to serve a two-year term. The
  successors of the individuals appointed under this subsection shall
  serve four-year terms in accordance with Section 1(b), Chapter 101,
  Acts of the 43rd Legislature, 1st Called Session, 1933 (Article
  6243b, Vernon's Texas Civil Statutes), as amended by this article.
         (e)  A member of the board of trustees elected by the members
  of a firemen's pension fund or the members of a policemen's pension
  fund and serving on the effective date of this article shall
  continue to serve on the board for the remainder of the member's
  term.
         SECTION 1.07.  (a) This article is contingent on the
  deposit, not later than July 31, 2007, of at least $100 million to a
  Firemen and Policemen Pension Fund by a city or town that operates
  such a fund under Chapter 101, Acts of the 43rd Legislature, 1st
  Called Session, 1933 (Article 6243b, Vernon's Texas Civil
  Statutes).
         (b)  If no city or town described by Subsection (a) of this
  section makes the deposit described by that subsection on or before
  July 31, 2007, this article has no effect.
         (c)  A city or town described by Subsection (a) of this
  section that makes the deposit described by that subsection shall
  publish notice of the deposit in the Texas Register as soon as
  practicable after the date of the deposit.
         SECTION 1.08.  Subject to Section 1.07 of this article, this
  article takes effect September 1, 2007.
  ARTICLE 2.  CONTINGENT PROVISIONS EFFECTIVE SEPTEMBER 1, 2009
         SECTION 2.01. Section 1(a), Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), is reenacted to read as follows:
         (a)  In all incorporated cities and towns containing more
  than 550,000 inhabitants and less than 600,000 inhabitants, having
  a fully or partially paid fire department, the mayor or the mayor's
  authorized representative, two (2) citizens of said city or town to
  be designated by the mayor, the chief of police or the chief's
  authorized representative, the chief of the fire department or the
  chief's authorized representative, and the successors of the mayor,
  chief of police, and chief of the fire department, three (3)
  policemen other than the chief or assistant chief, to be elected by
  members of the policemen's pension fund, three (3) firemen other
  than the chief or assistant chief, to be elected by members of the
  firemen's pension fund, composing eleven (11) members, seven (7) of
  which shall be a quorum, shall constitute a board of trustees of the
  Firemen and Policemen Pension Fund, to provide for the disbursement
  of the same and to designate the beneficiaries thereof. The three
  policemen and the three firemen named above shall be elected to a
  term of four (4) years. The term for a citizen designated by the
  mayor is four (4) years. The board shall be known as the Board of
  Firemen and Policemen Pension Fund, __________, Texas. Said board
  shall organize by choosing one member as Chairman and by appointing
  a secretary. Such board shall have charge of and administer said
  fund and shall order payments therefrom in pursuance of the
  provisions of this law. It shall report annually to the governing
  body of such city or town the condition of the said fund and the
  receipts and disbursements on account of the same with a complete
  list of beneficiaries of said fund and the amounts paid them.
         SECTION 2.02.  Section 2, Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), is reenacted to read as follows:
         Sec. 2.  PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each
  member fireman and policeman in the employment of such city or town
  must participate in said fund, except in times of national
  emergency those persons as are employed during that time shall not
  be required to participate in the fund, and said city or town shall
  be authorized to deduct a sum of not less than one per cent (1%) nor
  in excess of six per cent (6%) of his wages from each month to form a
  part of the fund known as the Firemen and Policemen Pension Fund,
  except that the city or town shall deduct a sum less than one per
  cent (1%) or more than six per cent (6%) of the member's wages each
  month to form a part of the fund if the board of trustees of that
  fund increases or decreases the percentage of wages to be
  contributed to the fund under the provisions of Section 10A of this
  Act. The amount to be deducted from the wages of those named above
  who must participate in the fund is to be determined by the board of
  trustees as provided for in Section 1 of this Act within the minimum
  and maximum deductions herein provided or as otherwise provided
  under the provisions of Section 10A of this Act.
         SECTION 2.03.  Section 3, Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), is reenacted to read as follows:
         Sec. 3.  PAYMENTS TO FUND. There shall be deducted for such
  fund from the wages of each fireman and policeman a sum to be
  determined by the board of trustees under the provisions of Section
  2 or 10A of this Act. Any donations made to such fund and rewards
  received by any member of either of said funds, and all funds
  received from any source for such fund shall be deposited in like
  manner to the credit of such fund.
         SECTION 2.04.  Sections 10A(a) and (b), Chapter 101, Acts of
  the 43rd Legislature, 1st Called Session, 1933 (Article 6243b,
  Vernon's Texas Civil Statutes), are reenacted to read as follows:
         (a)  Notwithstanding anything to the contrary in other parts
  of this Act, the Board of Trustees may, by majority vote of the
  whole board, make from time to time one or more of the following
  changes, or modifications:
               (1)  modify or change prospectively or retroactively in
  any manner whatsoever any of the benefits provided by this Act,
  except that any retroactive change or modification shall only
  increase pensions or benefits;
               (2)  modify or change prospectively in any manner
  whatsoever any of the membership qualifications;
               (3)  modify or change prospectively or retroactively in
  any manner whatsoever any of the eligibility requirements for
  pensions or benefits;
               (4)  increase or decrease prospectively the percentage
  of wages less than the one per cent (1%) minimum or above the six per
  cent (6%) maximum provided in Section 2 of this Act to be
  contributed to the fund; or
               (5)  provide prospectively for refunds, in whole or in
  part, and with or without interest, of contributions made to the
  fund by employees who leave the city service before qualifying for a
  pension.
         (b)  None of the changes made under Subsection (a) of this
  section may be made unless all of the following conditions are
  sequentially complied with:
               (1)  the change must be approved by a qualified actuary
  selected by a four-fifths vote of the Board; the actuary, if an
  individual, must be a Fellow of the Society of Actuaries or a Fellow
  of the Conference of Actuaries in Public Practice or a Member of the
  American Academy of Actuaries; the findings upon which the
  properly selected and qualified actuary's approval are based are
  not subject to judicial review;
               (2)  the change must be approved by a majority of all
  persons then making contributions to the fund as employees of a
  department to which the change would directly apply, voting by
  secret ballot at an election held after ten (10) days' notice given
  by posting at a prominent place in every station or substation of a
  department to which the change would directly apply and in the city
  hall;
               (3)  the changes, except changes made under the
  provisions of Subdivision (1), Subsection (a), of this section,
  shall apply only to active member employees who are members of the
  affected departments at the time the change becomes effective and
  those who enter the departments thereafter; and
               (4)  the changes shall not deprive any person, without
  his written consent, of any right to receive a pension or benefits
  which have already become vested and matured.
         SECTION 2.05.  The following laws are repealed:
               (1)  Section 1(b), Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), as amended by Article 1 of this Act;
               (2)  Section 10A(c), Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), as added by Article 1 of this Act; and
               (3)  Section 14A, Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes), as added by Article 1 of this Act.
         SECTION 2.06.  (a) In this section:
               (1)  "Board of trustees" means a board of trustees
  constituted under Section 1(a), Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes).
               (2)  "City or town" means a city or town that operates a
  Firemen and Policemen Pension Fund under Chapter 101, Acts of the
  43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes).
         (b)  On the effective date of this article, the term of the
  citizen member of the board of trustees appointed by the mayor of
  the city or town under Section 1.06(c) of this Act terminates and
  the mayor or a representative designated by the mayor shall serve as
  a member of the board of trustees. The two other citizen members of
  the board of trustees who are designated by the mayor of the city or
  town and who are serving on the board of trustees on the effective
  date of this article shall continue to serve for the remainder of
  the members' four-year terms.
         (c)  On the effective date of this article, the terms of the
  two citizen members of the board of trustees appointed by the city
  manager under Section 1.06(d) of this Act terminate and the chief
  of police or the chief's authorized representative and the chief of
  the fire department or the chief's authorized representative shall
  serve as members of the board of trustees.
         (d)  A member of the board of trustees elected by the members
  of a firemen's pension fund or the members of a policemen's pension
  fund and serving on the effective date of this article shall
  continue to serve on the board for the remainder of the member's
  term.
         SECTION 2.07.  (a)  This article takes effect only if Article
  1 of this Act takes effect in accordance with Section 1.07 of this
  Act.  If Article 1 of this Act does not take effect, this article has
  no effect.
         (b)  Subject to Subsection (a) of this section, this article
  takes effect September 1, 2009, and supersedes Article 1 of this Act
  unless, not later than July 31, 2009, at least $110 million is
  deposited to a Firemen and Policemen Pension Fund by a city or town
  that operates such a fund under Chapter 101, Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes).
         (c)  If a city or town described by Subsection (b) of this
  section makes the deposit described by that subsection on or before
  July 31, 2009, this article has no effect.
         (d)  A city or town described by Subsection (b) of this
  section that makes the deposit described by that subsection shall
  publish notice of the deposit in the Texas Register as soon as
  practicable after the date of the deposit.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3355 was passed by the House on May 8,
  2007, by the following vote:  Yeas 146, Nays 0, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 3355 was passed by the Senate on May
  23, 2007, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor