By: Duncan S.B. No. 1668
 
  (Truitt)
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to purchase of service credit in the Teacher Retirement
  System of Texas.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Section 823.304, Government Code,
  is amended to read as follows:
         Sec. 823.304.  USERRA [REEMPLOYED VETERAN'S] CREDIT.
         SECTION 2.  Subsections (a), (c), and (d), Section 823.304,
  Government Code, are amended to read as follows:
         (a)  A person eligible to establish USERRA [reemployed
  veteran's] credit is one who qualifies under the Uniformed Services
  Employment and [Veteran's] Reemployment Rights Act of 1994, 38
  U.S.C. Section 4301 [2021] et seq., for the benefits of
  reemployment in a position included within the membership of the
  retirement system and who is entitled under that Act to additional
  credit and benefits from the retirement system because of the
  person's active duty in the armed forces of the United States.
         (c)  A person may establish credit under this section by
  depositing with the retirement system for each year of service
  claimed an amount equal to[:
               [(1)]  the member contributions to the retirement
  system, as determined by the retirement system, that the person
  would have made had the person continued to be employed in the
  person's former position covered by the retirement system during
  the entire period of active duty in the armed forces for which the
  person is to receive retirement credit[; and
               [(2)     a fee of five percent, compounded annually, of
  the required contribution from the date of the person's first
  eligibility to establish the credit to the date of deposit].
         (d)  To the extent required by the Uniformed Services
  Employment and [Veteran's] Reemployment Rights Act of 1994 and
  permitted by Sections 401(a) and 415 of the Internal Revenue Code of
  1986 (26 U.S.C. Sections 401 and 415), the retirement system may:
               (1)  grant the person service credit for the period of
  active duty in the armed forces as if the person had been employed
  in a position eligible for membership and credit with the
  retirement system if the person establishes credit by making the
  required deposits, or, if the person has not made the required
  deposits, consider the period of active duty for the purpose of
  determining whether the person meets the length-of-service
  eligibility requirements for retirement or other benefits
  administered by the retirement system as if the person had
  established the credit; and
               (2)  include in relevant benefit computations under
  this subtitle the annual compensation, as determined by the
  retirement system, that would have been otherwise received by the
  person for service covered by the retirement system during any year
  in which the person had active duty in the armed forces.
         SECTION 3.  Subsection (c), Section 823.401, Government
  Code, is amended to read as follows:
         (c)  A member eligible to establish credit under this section
  is one who has at least five years of service credit in the
  retirement system for actual service in public schools, including
  at least one year completed after the relevant out-of-state
  service.
         SECTION 4.  Subsections (c), (d), and (e), Section 823.402,
  Government Code, are amended to read as follows:
         (c)  A member eligible to establish credit under this section
  is one who:
               (1)  has at least five years of service credited
  [credit] in the retirement system before the developmental leave
  occurs; [and]
               (2)  has, [is an employee of a public school] at the
  time the required deposits for the credit are paid, at least one
  year of membership service credit in the retirement system
  following the developmental leave; and
               (3)  has at least five years of service credited in the
  retirement system at the time the required deposits for the credit
  are paid [is sought].
         (d)  On or before the date a member takes developmental
  leave, the member must [shall] file with the retirement system a
  notice of intent to take developmental leave, and the member's
  employer must [shall] file with the retirement system a
  certification that the leave meets the requirements of Subsection
  (b). The notice of intent and the certification must be in the form
  required by the retirement system. Leave is not creditable in the
  retirement system if the member does not submit notice of intent and
  obtain the certification required by this subsection.
         (e)  A member may establish credit under this section by
  depositing with the retirement system for each year of
  developmental leave certified the actuarial present value, at the
  time of deposit, of the additional standard retirement annuity
  benefits that would be attributable to the purchase of the service
  credit under this section, based on rates and tables recommended by
  the retirement system's actuary and adopted by the board of
  trustees [claimed an amount equal to the sum of:
               [(1)     the rate of member contributions required during
  the year of leave, times the member's annual rate of compensation
  during the member's most recent year of creditable service that
  preceded the year of leave; plus
               [(2)     the amount that the state would have contributed
  had the member performed membership service during the year of
  leave at the member's annual rate of compensation during the most
  recent year of service that preceded the leave].
         SECTION 5.  Subsection (c), Section 823.501, Government
  Code, is amended to read as follows:
         (c)  A member may reinstate canceled credit under this
  section by depositing with the retirement system:
               (1)  the amount withdrawn or refunded; plus
               (2)  a reinstatement fee of eight [six] percent,
  compounded annually, of the amount withdrawn or refunded from the
  date of withdrawal or refund to the date of redeposit.
         SECTION 6.  Subsections (h) and (j), Section 825.403,
  Government Code, are amended to read as follows:
         (h)  If deductions were previously required but not paid, the
  retirement system may not provide benefits based on the service or
  compensation unless the deposits required by this section have been
  fully paid. The person's employer at the time the unreported
  service was rendered or compensation was paid must verify the
  service or compensation as required by Subsection (j) and the
  person must submit the verification to the retirement system not
  later than five years after [member shall pay the amount of those
  deductions plus a fee computed at a rate of five percent a year on
  the unpaid amount from] the end of the school year in which the
  service was rendered or compensation was paid. To establish the
  service or compensation credit, the person must deposit with the
  retirement system the actuarial present value, at the time of
  deposit, of the additional standard retirement annuity benefits
  that would be attributable to the purchase of service or
  compensation credit under this section, based on rates and tables
  recommended by the retirement system's actuary and adopted by the
  board of trustees [deductions first became due or the end of the
  1974-75 school year, whichever is later, to the date of payment].
  The board of trustees shall:
               (1)  prescribe terms for payments under this
  subsection; and
               (2)  credit the person [member] for prior service to
  which the person [member] is entitled under this subtitle[; and
               [(3)     deposit the fee required by this subsection in
  the state contribution account].
         (j)  If deductions were previously required [of a member] but
  not paid, proof of service satisfactory to the retirement system
  must be made before service credit is granted or payment for the
  credit is required. Proof of service is sufficient if the person's
  [member's] employer documents that the employer has records made at
  or near the time of service that establish the amount of time worked
  and salary earned. [A member may submit in lieu of employer
  documentation internal revenue, social security, bank, or other
  written records that were made at or near the time of service and
  that establish the amount of time worked and salary earned.] An
  affidavit based on memory without written records made at or near
  the time of service is not sufficient documentation for the
  establishment of service credit. The retirement system may audit
  records used for documentation under this subsection. A person who
  does not obtain proof of service as required by this section may not
  establish the service or compensation credit.
         SECTION 7.  (a)  The following sections of the Government
  Code are repealed:
               (1)  Subsection (i), Section 823.401;
               (2)  Subsections (g) and (h), Section 823.402; and
               (3)  Subsection (e), Section 823.501.
         (b)  Section 57, Chapter 1359 (S.B. 1691), Acts of the 79th
  Legislature, Regular Session, 2005, is repealed.
         SECTION 8.  Subsections (d) and (e), Section 823.401,
  Government Code, as amended by Section 10, Chapter 1359 (S.B.
  1691), Acts of the 79th Legislature, Regular Session, effective
  September 1, 2005, apply to a person who was a member of the Teacher
  Retirement System of Texas on December 31, 2005, and to
  out-of-state service performed before January 1, 2006,
  notwithstanding Section 57 of that Act.
         SECTION 9.  For unreported service rendered or unreported
  compensation paid before the effective date of this Act, the
  verification required under Subsection (h), Section 825.403,
  Government Code, as amended by this Act, must be received by the
  Teacher Retirement System of Texas not later than August 31, 2016.
         SECTION 10.  (a)  Notwithstanding the service credit cost
  provisions of Section 8 of this Act and Subsection (e), Section
  823.402, Subdivision (2), Subsection (c), Section 823.501, and
  Subsection (h), Section 825.403, Government Code, as amended by
  this Act, a person may establish service credit by paying the
  deposits and fees required under Sections 823.402, 823.501, and
  825.403, Government Code, and by Section 57, Chapter 1359 (S.B.
  1691), Acts of the 79th Legislature, Regular Session, 2005, as
  those sections existed before amendment or repeal by this Act, if:
               (1)  the person otherwise meets all eligibility
  requirements under those sections as amended by this Act;
               (2)  the service for which credit is sought to be
  established was rendered, or the compensation for which credit is
  sought was paid, before the effective date of this Act; and
               (3)  the person makes payment for the service credit,
  or enters into an installment agreement for payment, not later than
  August 31, 2013.
         (b)  If a person has an installment agreement under
  Subsection (a) of this section that is terminated after August 31,
  2013, before the person has made all of the payments, the person may
  establish credit only as provided by Sections 823.402, 823.501, and
  825.403, Government Code, as amended by this Act, and by Section 8
  of this Act.
         SECTION 11.  This Act takes effect September 1, 2011.