80R8462 DLF-D

By: Isett H.B. No. 3445

A BILL TO BE ENTITLED

AN ACT

relating to long-term funding of benefits for certain retired governmental employees.

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

SECTION 1. Subchapter I, Chapter 1551, Insurance Code, is amended by adding Section 1551.4055 to read as follows:

Sec. 1551.4055. ANNUITANT HEALTH BENEFITS FUND. (a) The state annuitant health benefits fund is a trust fund with the comptroller, who is custodian of the fund.

(b) The board of trustees shall administer the fund.

(c) The following shall be paid into the fund:

(1) contributions from active employees, employers, and the state as required by the General Appropriations Act;

(2) investment income; and

(3) other money required or authorized to be paid into the fund.

(d) Contributions to the fund are in addition to other contributions made under this chapter and may be collected in the same manner as other contributions are collected under this chapter.

(e) Money in the fund may be transferred to the employees life, accident, and health insurance and benefits fund for use in accordance with Subsection (f).

(f) Money in the fund may be used only to provide health benefits for an annuitant who is eligible to participate under Section 1551.102 and who was born on or after September 1, 1977. The legislature reserves the right to specify additional annuitants for whom payments may be made from the fund.

(g) The fund is held in trust for the benefit of the annuitants described by Subsection (f) and may not be diverted.

SECTION 2. Section 1551.406(a), Insurance Code, is amended to read as follows:

(a) Under the standard of care provided by Section 815.307, Government Code, the board of trustees may manage and has full power to invest and reinvest the money in:

(1) the employees life, accident, and health insurance and benefits fund;

(2) the state employees cafeteria plan trust fund; [and]

(3) the employees' health care stabilization trust fund; and

(4) the state annuitants health benefit fund.

SECTION 3. Chapter 1575, Insurance Code, is amended by adding Subchapter G-1 to read as follows: SUBCHAPTER G-1. RETIREE HEALTH BENEFITS FUND

Sec. 1575.321. DEFINITION. In this subchapter, "health benefits fund" means the public school retiree health benefits fund established under this subchapter.

Sec. 1575.322. FUND; ADMINISTRATION. (a) The public school retiree health benefits fund is a trust fund with the comptroller, who is custodian of the health benefits fund.

(b) The trustee shall administer the health benefits fund.

Sec. 1575.323. PAYMENTS INTO FUND. (a) The following shall be paid into the health benefits fund:

(1) contributions from active employees, employers, and the state as required by the General Appropriations Act;

(2) investment income; and

(3) other money required or authorized to be paid into the fund.

(b) Contributions to the health benefits fund are in addition to other contributions made under this chapter and may be collected in the same manner as other contributions are collected under this chapter.

Sec. 1575.324. PAYMENTS FROM FUND. (a) Money in the health benefits fund may be transferred to the retired school employees group insurance fund for use in accordance with Subsection (b).

(b) Money in the health benefits fund may be used only to provide health benefits for a retiree who was born on or after September 1, 1977. The legislature reserves the right to specify additional retirees for whom payments may be made from the fund.

(c) The health benefits fund is held in trust for the benefit of the retirees described by Subsection (b) and may not be diverted.

Sec. 1575.325. INVESTMENT OF FUND. The trustee may invest money in the health benefits fund in the manner provided by Subchapter D, Chapter 825, Government Code, for assets of the Teacher Retirement System of Texas.

Sec. 1575.326. MANAGEMENT OF ASSETS. The trustee may commingle, for investment purposes only, the assets of a fund created under this subchapter with another fund created under this chapter or any other trust fund administered by the trustee if the trustee maintains and credits proportionate ownership records.

SECTION 4. Chapter 1601, Insurance Code, is amended by adding Subchapter F-1 to read as follows: SUBCHAPTER F-1. RETIREE HEALTH BENEFITS FUNDS

Sec. 1601.271. FUND; ADMINISTRATION. (a) The Texas A&M University System retiree health benefits fund and The University of Texas System retiree health benefits fund are trust funds with the comptroller, who is custodian of each fund.

(b) The Texas A&M University System shall administer The Texas A&M University System retiree health benefits fund. The University of Texas System shall administer The University of Texas System retiree health benefits fund.

Sec. 1601.272. PAYMENTS INTO FUND. (a) The following shall be paid into each fund:

(1) contributions from active employees, employers, and the state as required by the General Appropriations Act;

(2) investment income; and

(3) other money required or authorized to be paid into the fund.

(b) Contributions to each fund are in addition to other contributions made under this chapter and may be collected in the same manner as other contributions are collected under this chapter.

Sec. 1601.273. PAYMENTS FROM FUND. (a) Money in The Texas A&M University System retiree health benefits fund may be transferred to a fund designated for that purpose by The Texas A&M University System for use in accordance with Subsection (b). Money in The University of Texas System retiree health benefits fund may be transferred to a fund designated for that purpose by The University of Texas System for use in accordance with Subsection (b).

(b) Money in each fund may be used by the appropriate system only to provide health benefits for a retiree who was born on or after September 1, 1977. The legislature reserves the right to specify additional retirees for whom payments may be made from the appropriate fund.

(c) The funds are held in trust for the benefit of the retirees described by Subsection (b) and may not be diverted.

Sec. 1601.274. INVESTMENT OF FUND. (a) The governing board of a system may invest the money in the system's fund under this subchapter and may commingle, for investment purposes only, the assets of a fund created under this subchapter with:

(1) institutional trust funds invested under Chapter 51, Education Code;

(2) the employees life, accident, and health insurance and benefits fund administered by the Employees Retirement System of Texas under Chapter 1551; or

(3) the retired school employees group insurance fund administered by the Teacher Retirement System of Texas under Chapter 1575.

(b) Subsection (a)(1) applies notwithstanding Section 51.004, Education Code.

(c) If money in a system's fund is commingled as described by Subsection (a), the comptroller shall maintain and credit proportionate ownership records of the funds appropriately.

SECTION 5. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.