By: Seliger S.B. No. 1358
  relating to optional annuity increases for certain retirees and
  beneficiaries of the Texas Municipal Retirement System.
         SECTION 1.  Subsection (c), Section 853.404, Government
  Code, is amended to read as follows:
         (c)  The governing body of a participating municipality that
  adopts an ordinance under Section 854.203 providing for increased
  annuities effective January 1 of a designated year may further
  provide in the ordinance that increases in annuities will be
  credited effective January 1 of each year following the designated
  year based on recomputations made as provided by Section 854.203(b) 
  [854.203(b)(1)] for each year following the initial computation,
  and using the fraction specified in the ordinance as required under
  Section 854.203(b) [854.203(b)(2)] in the recomputations.
         SECTION 2.  Section 854.203, Government Code, is amended by
  amending Subsections (b) and (f) and adding Subsection (b-1) to
  read as follows:
         (b)  The amount of annuity increase under this section is
  computed by one of the following methods:
               (1)  as the sum of the prior and current service
  annuities on the effective date of retirement of the person on whose
  service the annuities are based, multiplied by:
                     (A) [(1)]  the percentage change in the Consumer
  Price Index for All Urban Consumers, published by the Bureau of
  Labor Statistics of the United States Department of Labor, from
  December of the year immediately preceding the effective date of
  the person's retirement to the December that is 13 months before the
  effective date of the ordinance providing the increase; and
                     (B) [(2)]  30 percent, 50 percent, or 70 percent,
  as specified by the governing body in the ordinance, except that if
  the governing body has specified a different percentage in an
  ordinance adopted under Section 853.404(c) and in effect on
  December 31, 1999, the percentage used in computing annuity
  increases for retirees of that municipality remains in effect until
  changed or discontinued under Section 853.404; or
               (2)  as the sum of the prior and current service
  annuities on the effective date of the increase multiplied by the
  integer percentage increase specified in the ordinance adopted by
  the governing body.
         (b-1)  An increase under Subsection (b)(2) applies to all
  annuities for which the effective date is at least 12 months before
  the effective date of the increase.
         (f)  An increase granted to an annuitant under Subsection
  (b)(2), or the [The] amount by which an increase under Subsection
  (b)(1) [this section] exceeds all previously granted increases to
  an annuitant is payable as a prior service annuity, is an obligation
  of the municipality's account in the municipality accumulation
  fund, and is subject to reduction under Section 855.308(f).
         SECTION 3.  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, 2009.