BILL ANALYSIS

S.B. 1667

By: Duncan

Pensions, Investments & Financial Services

Committee Report (Unamended)

BACKGROUND AND PURPOSE

During a comprehensive review of the Teacher Retirement System of Texas' (TRS) policies and procedures, the TRS board of trustees and staff held several public meetings to consider updates to statutory provisions that would allow TRS to operate more efficiently and clarify certain statutory references. S.B. 1667 seeks to implement the changes considered by the TRS board and staff.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 1667 reenacts and amends Section 411.081(i), Government Code, as amended by Chapters 183 (H.B. 1830), 780 (S.B. 1056), 816 (S.B. 1599), and 1027 (H.B. 4343), Acts of the 81st Legislature, Regular Session, 2009, to add the Teacher Retirement System of Texas (TRS) to the noncriminal justice agencies and entities to which a criminal justice agency is authorized to disclose criminal history record information that is the subject of an order of nondisclosure.

S.B. 1667 amends the Government Code to entitle TRS to obtain from the Department of Public Safety (DPS), the FBI Criminal Justice Information Services Division, or another law enforcement agency criminal history record information obtained by such entity that relates to a person who is an employee or an applicant for employment with the retirement system; is a consultant, contract employee, independent contractor, intern, or volunteer for the retirement system or an applicant to serve in one of those positions; proposes to enter into a contract with or has a contract with the retirement system to perform services for or supply goods to the retirement system; or is an employee or subcontractor, or an applicant to be an employee or subcontractor, of a contractor that provides services to the retirement system.

S.B. 1667 prohibits criminal history record information obtained by TRS from being released or disclosed to any person except on court order, with the consent of the person who is the subject of that information, or to a federal agency as required by federal law or executive order. The bill requires TRS to destroy criminal history record information after the information is used for its authorized purposes.  The bill authorizes TRS to provide a copy of the criminal history record information obtained from DPS, the FBI Criminal Justice Information Services Division, or other law enforcement agency to the individual who is the subject of the information. The bill establishes that the failure or refusal of an employee or applicant to provide the following on request constitutes good cause for dismissal or refusal to hire: a complete set of fingerprints; a true and complete name; or other information necessary for a law enforcement entity to obtain criminal history record information.

S.B. 1667 establishes that the state's open meetings law does not prohibit the TRS board of trustees or a board committee from holding an open or closed meeting by telephone conference call. The bill authorizes the board of trustees or a board committee to hold a meeting by telephone conference call only if a quorum of the applicable board or board committee is physically present at one location. The bill establishes that a telephone conference call meeting is subject to the notice requirements applicable to other meetings and requires such notice to specify the location of the meeting where a quorum of the board of trustees or board committee, as applicable, will be physically present and the intent to have a quorum present at that location.

S.B. 1667 requires the location where a quorum is physically present to be open to the public during the open portions of a telephone conference call meeting, requires the open portions of the meeting to be audible to the public at the location where the quorum is present and to be tape-recorded at that location, and requires the tape recording to be made available to the public. The bill requires the meeting location to provide two-way communication during the entire telephone conference call meeting and requires the identification of each party to the telephone conference call to be clearly stated before the party speaks. The bill establishes that the authority provided by these provisions is in addition to the authority provided by open meetings law relating to other governmental bodies.

S.B. 1667 establishes that a board member who participates in a board or board committee meeting by telephone conference call but is not physically present at the meeting location is not considered to be absent from the meeting for any purpose. The bill establishes that the vote of a board member who participates in a board or board committee meeting by telephone conference call is counted for the purpose of determining the number of votes cast on a motion or other proposition before the board or board committee.

S.B. 1667 authorizes a board member to participate remotely by telephone conference call instead of by being physically present at the location of a board meeting for not more than one board meeting per calendar year. The bill establishes that a board member who participates remotely in any portion of a board meeting by telephone conference call is considered to have participated in the entire board meeting by telephone conference call. The bill establishes that, for purposes of the limitation on the number of board meetings that a board member may attend per calendar year, remote participation by telephone conference call in a meeting of a board committee does not count as remote participation by telephone conference call in a meeting of the board, even if a quorum of the full board attends the meeting or notice of the board committee meeting is also posted as notice of a board meeting. The bill prohibits a person who is not a board member from speaking at the meeting from a remote location by telephone conference call, except as provided for public consultations between a governmental body and its attorney. The bill defines "board" for purposes of the bill's provisions relating to meetings held by telephone conference call.

S.B. 1667 excepts the name of an applicant for the position of TRS executive director, chief investment officer, or chief audit executive from disclosure under certain provisions of the state's open records law, except that the TRS board of trustees is required to give public notice of the names of three finalists being considered for one of those positions at least 21 days before the date of the meeting at which the final action or vote is to be taken on choosing a finalist for employment.

S.B. 1667, in a provision relating to benefits payable with respect to a member or retiree of a public retirement system under a qualified domestic relations order, adds as an alternative to specifying the social security number of the member or retiree and of each alternate payee covered under the order the option of providing an express authorization for the parties to use an alternate method acceptable to the public retirement system to verify the social security number of the member or retiree and each alternate payee. The bill adds the condition, for a domestic relations order to be a qualified domestic relations order, that the order, if required by the public retirement system, conform to a model order adopted by that retirement system. The bill authorizes a public retirement system to assess administrative fees on a party who is subject to a domestic relations order for the review of the order and, as applicable, for the administration of payments under an order that is determined to be qualified. The bill authorizes the retirement system to deduct fees from payments made under the order in addition to other methods of collecting fees that a retirement system is authorized to establish.

S.B. 1667 establishes that provisions relating to the purpose of TRS do not prohibit comments by a TRS employee on federal laws, regulations, or other official actions or proposed actions affecting or potentially affecting TRS that are made in accordance with policies adopted by the board.

S.B. 1667 requires a TRS member to notify the retirement system in writing of membership service that has not been properly credited by TRS on an annual statement, to provide verification and make deposits as required before the service may be credited, and to notify the retirement system of the service in writing on or before the last day of the fifth school year after the end of the school year in which the service was rendered for the service to be credited.

S.B. 1667 authorizes TRS to deduct the amount of a person's indebtedness to the retirement system from an amount payable by TRS to the person or the person's estate and the distributees of the estate. The bill authorizes TRS to deduct the amount of the payment from any amount payable by the retirement system to a person who received the payment or to that person's estate and distributees of the estate if the retirement system makes a payment to a participant who is deceased and the payment is not payable.

S.B. 1667 entitles a beneficiary designated after retirement on the retiree's death to receive monthly payments of the survivor's portion of the retiree's optional retirement annuity for the remainder of the beneficiary's life if the beneficiary designated at the time of the retiree's retirement is a trust and the beneficiary is the sole beneficiary. The bill adds the revocation of a beneficiary designation and the ineligibility of a person to receive benefits to the conditions under which certain death benefits become payable and rights to elect survivor benefits, if applicable, become available to one of the classes of eligible persons designated to receive benefits in the absence of a beneficiary.

S.B. 1667 renders a person ineligible to receive a death benefit payable on the death of a member or an annuitant if the person is found not guilty by reason of insanity of causing the death of the member or annuitant or is the subject of an indictment, information, complaint, or other charging instrument alleging that the person caused the death of the member or annuitant and the person is determined to be incompetent to stand trial.

S.B. 1667 makes certain provisions relating to the conditions under which a member is eligible to retire and receive a standard service retirement annuity applicable only to a TRS member who becomes a member on or after September 1, 2007, rather than on or after September 1, 2006. The bill, in a provision requiring the TRS board of trustees to extend the tables used in determining a death benefit annuity, requires the board to extend the tables to ages earlier than indicated in the tables rather than to ages earlier than 55 years.  The bill removes provisions requiring different extensions of different tables.

S.B. 1667, in a provision relating to the gubernatorial appointment of TRS trustees from various slates of nominees, removes the requirement for nomination of such persons by written ballot.  The bill adds instructions on how to request a paper ballot or vote in another matter established by the TRS board of trustees, including by telephone or other electronic means, to the items the board is required to send to each retiree for purposes of nominating candidates for appointment of a retired TRS member to the board. The bill requires the governor, if only two persons are nominated to the board on any of the three slates of nominees, to appoint a member of the board to the applicable trustee position from the slate of two nominated persons. The bill requires the governor, if only one such person is nominated on any slate, to appoint that person to the applicable trustee position. The bill requires the governor, if no such member or retiree is nominated on a slate, to appoint to the applicable trustee position a person who otherwise meets the qualifications required for the position.

S.B. 1667 changes the frequency with which the board of trustees is required to redesignate its actuary after advertising for and reviewing proposals from providers of actuarial services from at least once every three years to at least once every four years. The bill establishes that the prohibition against a TRS employee's advocacy of increased benefits or attempts to influence legislative action or inaction and the prohibition against of the use of system assets to advocate or influence the outcome of an election or the passage or defeat of any legislative measure do not prohibit comments from a TRS employee or the use of system assets by such employee to comment on federal laws, regulations, or other official actions or proposed actions affecting or potentially affecting the retirement system that are made in accordance with policies adopted by the board.

S.B. 1667 makes provisions relating to an employing school district's failure to remit all required member and employer deposits applicable to an employer generally rather than to an employing school district and to such an employer's governing body if the governing body is not a school district board of trustees.

S.B. 1667 authorizes TRS, if an executor or administrator of a deceased participant's estate has not been named, to release records of a participant to a person or entity who the executive director determines is acting in the interest of the deceased participant's estate, or an heir, legatee, or devisee of the deceased participant.

S.B. 1667, in a provision requiring TRS to acquire and maintain records identifying members and the types of positions they hold as members at least annually, adds the position of peace officer to the types of positions to be identified. The bill requires the records for each member identified as a peace officer to specify whether the member is an employee of an institution of higher education or of a public school that is not an institution of higher education. The bill requires an employer to provide the information required in the form and manner specified by TRS.

S.B. 1667 amends the Insurance Code to redefine "dependent," for purposes of the Texas Public School Retired Employees Group Benefits Act and the Texas School Employees Uniform Group Health Coverage Act, by updating language to replace references to a child being mentally retarded with references to a child having a mental disability. The bill makes provisions relating to contributions held in trust by an employer for the retired school employees group insurance fund and its participants applicable to an employing public school and its governing body, rather to an employing school district and its trustees. The bill makes its provisions relating to the interest assessed on a late payment by an employer of the required contributions to the retired school employees group insurance fund applicable to an employing public school, rather than an employing school district.

S.B. 1667 requires a TRS member who seeks credit for membership service for service rendered before September 1, 2011, but not properly credited to a member's annual statement to notify the retirement system in writing not later than on or before the last day of the fifth school year after the end of the school year in which the service was rendered, or August 31, 2016, whichever is later.

S.B. 1667 authorizes the amount of the state contribution to TRS for the state fiscal year ending August 31, 2012, to be less than the amount contributed by members during that fiscal year. The bill authorizes the state, for the state fiscal year ending August 31, 2013, to contribute an amount to the retired school employees group insurance fund that is less than one percent of the salary of each active employee.

EFFECTIVE DATE

September 1, 2011.