HB 3158, Sen 2nd Rdg, Amnd #F1

(1) In SECTION 1.02 of the bill, in amended Section 2.01, Article 6243a-1, Revised Statutes (page 6, between lines 51 and 52), insert the following appropriately numbered subdivision and renumber subsequent subdivisions of the section accordingly:

(___) "Two-thirds vote," in reference to a vote of all the trustees, means a vote of 8 of the 11 trustees of the board.

(2) In SECTION 1.04 of the bill, strike added Section 2.025(a)(1), Article 6243a-1, Revised Statutes (page 7, lines 8 through 10), and substitute the following:

(1) conclusion regarding whether the pension system meets State Pension Review Board pension funding guidelines; and

(3) In SECTION 1.04 of the bill, strike added Section 2.025(b), Article 6243a-1, Revised Statutes (page 7, lines 13 through 15), and substitute the following:

(b) Subject to Subsection (d) of this section, not later than November 1, 2024, the board shall by rule adopt a plan that:

(1) complies with funding and amortization period requirements applicable to the pension system under Subchapter C, Chapter 802, Government Code; and

(2) takes into consideration the independent actuary's recommendations under Subsection (a)(2) of this section.

(b-1) The board shall provide a copy of the analysis prepared under Subsection (a) of this section and a summary of any rules adopted by the board under Subsection (b) of this section to the State Pension Review Board.

(4) In SECTION 1.04 of the bill, in added Section 2.025(d), Article 6243a-1, Revised Statutes (page 7, lines 25 through 28), strike "August 31, 2025, unless a law is enacted by the 89th Legislature that authorizes the content of the rule. If a law is enacted that authorizes the content of the rule, the rule continues in effect until amended in accordance with this article" and substitute the following:

(1) a law that is enacted by the legislature and becomes law preempts the rule; or

(2) the board amends the rule and the amendment takes effect, provided the board may only amend the rule if the pension system complies with the funding and amortization period requirements applicable to the pension system under Subchapter C, Chapter 802, Government Code

(5) In SECTION 1.05 of the bill, in amended Section 3.01(b)(1), Article 6243a-1, Revised Statutes (page 7, line 53), between "mayor" and the underlined semicolon, insert ", in consultation with the city council".

(6) In SECTION 1.05 of the bill, strike added Section 3.01(b)(2), Article 6243a-1, Revised Statutes (page 7, lines 54 and 55), and substitute the following:

(2) three trustees elected under rules adopted by the board by the members and pensioners of the pension system from a slate of nominees, in a number determined under the rules, selected and vetted by the nominations committee;

(7) In SECTION 1.05 of the bill, in added Section 3.01(b-2), Article 6243a-1, Revised Statutes (page 8, line 1), between "appointed" and "a", insert "or elected".

(8) In SECTION 1.05 of the bill, in added Section 3.01(b-3), Article 6243a-1, Revised Statutes (page 8, lines 8 and 9), strike "appoint a trustee who meets the requirements of Subsection (b-1) of this section" and substitute "select, vet, and nominate a slate of persons, the number of which is determined by board rule, who meet the requirements of Subsection (b-1) of this section, and the members of the pension system shall elect a trustee from the slate of nominees".

(9) In SECTION 1.05 of the bill, in added Section 3.01(b-3), Article 6243a-1, Revised Statutes (page 8, line 11), strike "An appointment" and substitute "The nomination and election of a trustee".

(10) In SECTION 1.05 of the bill, in amended Section 3.01(d), Article 6243a-1, Revised Statutes (page 8, line 44), between "appointment" and "The", insert ", or election.".

(11) In SECTION 1.05 of the bill, in amended Section 3.01(e), Article 6243a-1, Revised Statutes (page 8, line 60), strike "appointed or".

(12) In SECTION 1.05 of the bill, in amended Section 3.01(e), Article 6243a-1, Revised Statutes (page 8, line 62), strike "An appointed trustee" and substitute "A trustee appointed or elected, as applicable, under Subsection (b)(1) or (2) of this section".

(13) In SECTION 1.05 of the bill, in amended Section 3.01(f), Article 6243a-1, Revised Statutes (page 9, lines 12 and 13), strike "The nomination and election of the trustees under Subsection (b)(3) or (4) of this section" and substitute "The election of the trustees under Subsection (b)(2), (3), or (4) of this section, including an election under Subsection (b-3) of this section to fill a trustee position under Subsection (b)(3) or (4) of this section,".

(14) In SECTION 1.05 of the bill, strike added Section 3.01(j-10), Article 6243a-1, Revised Statutes (page 10, lines 54 through 58), and substitute the following:

(j-10) An employee or other agent acting on behalf of the pension system or the city must certify to the State Pension Review Board that any information provided by the pension system or city, as appropriate, under this article or other law is accurate and based on realistic assumptions.

(15) In SECTION 1.05 of the bill, in added Section 3.01(o)(2), Article 6243a-1, Revised Statutes (page 11, line 4), strike "two-thirds of the trustees" and substitute "at least a two-thirds vote of all the trustees".

(16) In SECTION 1.06 of the bill, in added Section 3.011(e), Article 6243a-1, Revised Statutes (page 12, line 19), strike "appoint" and substitute "nominate".

(17) In SECTION 1.06 of the bill, in added Section 3.012(a)(2), Article 6243a-1, Revised Statutes (page 12, line 40), strike "appointed or".

(18) In SECTION 1.06 of the bill, in added Section 3.012(d), Article 6243a-1, Revised Statutes (page 12, line 62), strike "appointing or nominating official or body" and substitute "mayor or nominations committee".

(19) In SECTION 1.06 of the bill, in added Section 3.012(d), Article 6243a-1, Revised Statutes (page 12, lines 66 and 67), strike "appointing or nominating official or body" and substitute "mayor or nominations committee".

(20) In SECTION 1.10 of the bill, in added Section 3.04(b-3), Article 6243a-1, Revised Statutes (page 14, line 46), strike "third" and substitute "second".

(21) In SECTION 1.10 of the bill, in added Section 3.04(b-3), Article 6243a-1, Revised Statutes (page 14, line 49), between "article" and "or", insert ", including Section 3.01(b)(3) or (4) of this article,".

(22) In SECTION 1.10 of the bill, in added Section 3.04(b-3), Article 6243a-1, Revised Statutes (page 14, lines 50 and 51), strike "other than as a trustee".

(23) In SECTION 1.10 of the bill, in added Section 3.04(d), Article 6243a-1, Revised Statutes (page 14, line 58), strike "The" and substitute "If acting in the executive director's own discretion, the".

(24) In SECTION 1.10 of the bill, in added Section 3.04(d), Article 6243a-1, Revised Statutes (page 14, line 62), after the period, insert "If the executive director is acting at the direction of the board and not exercising the executive director's own discretion, the executive director does not owe a fiduciary duty under this subsection."

(25) In SECTION 1.12 of the bill, in added Section 4.02(b)(3), Article 6243a-1, Revised Statutes (page 15, line 44), between "by" and "a", insert "at least".

(26) In SECTION 1.12 of the bill, in added Section 4.02(d)(1)(B), Article 6243a-1, Revised Statutes (page 15, lines 56 and 57), strike "except as provided by Section 4.021(b)(1) of this article,".

(27) In SECTION 1.12 of the bill, in amended Section 4.02(d)(1)(B)(iv), Article 6243a-1, Revised Statutes (page 15, line 68) strike "$5,724,203" and substitute "$5,724,000".

(28) In SECTION 1.12 of the bill, in amended Section 4.02(d)(2), Article 6243a-1, Revised Statutes (page 16, line 20), strike "or Section 4.021(b)(2) of this article".

(29) In SECTION 1.12 of the bill, in amended Section 4.02(d)(2), Article 6243a-1, Revised Statutes (page 16, line 21), strike "$11" and substitute "$13".

(30) In the recital to SECTION 1.13 of the bill (page 16, line 43), strike "Sections 4.021 and" and substitute "Section".

(31) In SECTION 1.13 of the bill, strike added Section 4.021, Article 6243a-1, Revised Statutes (page 16, line 44, through page 17, line 38).

(32) In SECTION 1.18 of the bill, in added Section 4.071, Article 6243a-1, Revised Statutes (page 21, line 22), between "by" and "a", insert "at least".

(33) In SECTION 1.21 of the bill, strike Section 5.01(a-1), Article 6243a-1, Revised Statutes (page 22, lines 19 through 23), and substitute the following:

(a-1) Group A or Group B members do not include any employee of the city who is:

(1) required by ordinance or who elects, in accordance with an ordinance, to participate in an alternative benefit plan established under Section 3.01(j-1)(2) of this article based on an evaluation under Section 3.01(j-5)(2) of this article; or

(2) required by ordinance to participate in an alternative benefit plan established under Section 810.002, Government Code.

(34) In SECTION 1.28 of the bill, in added Section 6.02(c-2), Article 6243a-1, Revised Statutes (page 33, line 56), strike "If, for purposes of Subsection (c-1) of this section," and substitute "Subject to Subsection (d-3) of this section and for purposes of Subsection (c-1) of this section, if".

(35) In SECTION 1.28 of the bill, in added Section 6.02(d-2), Article 6243a-1, Revised Statutes (page 34, line 42), strike "If, for purposes of Subsection (d) of this section," and substitute "Subject to Subsection (d-3) of this section and for purposes of Subsection (d) of this section, if".

(36) In SECTION 1.28 of the bill, in amended Section 6.02, Article 6243a-1, Revised Statutes (page 34, between lines 54 and 55), insert the following:

(d-3) For purposes of Subsections (c-2) and (d-2) of this section, a Group B member's pension benefit calculated under Subsection (b) of this section shall be calculated without application of any reduction under Subsection (b-1) of this section.

(37) In SECTION 1.41 of the bill, in added Section 6.12(b), Article 6243a-1, Revised Statutes (page 58, line 22), strike "shall" and substitute "may".

(38) In SECTION 1.47 of the bill, in added Section 6A.01(a), Article 6243a-1, Revised Statutes (page 67, line 3), between "by" and "a", insert "at least".

(39) Strike SECTION 1.52(b) of the bill (page 74, line 61, through page 75, line 7), and substitute the following:

(b) The terms of the current trustees expire on the effective date of this article. Subject to Subsection (e) of this section, on that date or as soon as possible after that date:

(1) the mayor shall appoint new trustees to the board in accordance with the requirements of Section 3.01(b)(1), Article 6243a-1, Revised Statutes, as added by this article; and

(2) notwithstanding the requirements of Sections 3.01(b)(2), (3), and (4) and (f), Article 6243a-1, Revised Statutes, as added or amended by this article, that the board in consultation with the nominations committee adopt rules governing the election of trustees appointed under Sections 3.01(b)(2), (3), and (4), Article 6243a-1, Revised Statutes, as added by this article, the nominations committee shall adopt procedures for electing the initial trustees elected under Sections 3.01(b)(2), (3), and (4), Article 6243a-1, Revised Statutes, as added by this article.

(40) Strike SECTION 1.52(d) of the bill (page 75, lines 19 through 23), and substitute the following:

(d) Once all trustees have been appointed or elected to the board under this section, the board shall by majority vote adopt rules establishing a process for electing trustees under Sections 3.01(b)(2), (3), and (4), Article 6243a-1, Revised Statutes, as added by this article.

(41) In ARTICLE 1 of the bill (page 76, between lines 28 and 29), insert the following SECTION and renumber subsequent SECTIONS of the article and cross-references to those SECTIONS accordingly:

SECTION 1.59. Section 6.14(e), Article 6243a-1, Revised Statutes, as amended by this article, applies only to a distribution out of a deferred retirement option plan account that is made on or after the implementation of that section. A distribution out of a deferred retirement option plan account that is made before the implementation of that section is governed by the law in effect when the distribution is made.

(42) In ARTICLE 1 of the bill, add the following appropriately numbered SECTION and renumber subsequent SECTIONS of that ARTICLE accordingly:

SECTION 1.___. Chapter 810, Government Code, is amended by adding Section 810.002 to read as follows:

Sec. 810.002. ALTERNATIVE BENEFIT PLAN FOR CERTAIN MUNICIPALITIES. (a) In this section, "alternative benefit plan" means a continuing, organized benefit plan, including a plan qualified under Section 401(a) of the Internal Revenue Code of 1986, of service retirement, disability retirement, or death benefits for officers or employees of a municipality.

(b) This section applies only to a municipality subject to Article 6243a-1, Revised Statutes.

(c) Notwithstanding any other law and subject to Subsection (f), the governing body of a municipality subject to this section may by ordinance:

(1) establish an alternative benefit plan and determine the benefits, funding source and amount, and administration of the alternative benefit plan; and

(2) require an employee first hired by the municipality on or after the date the alternative benefit plan is implemented to participate in the alternative benefit plan instead of participating in the pension system provided under Article 6243a-1, Revised Statutes.

(d) Each active participant of an alternative benefit plan established under this section shall contribute to the plan an amount, if any, determined by the municipality. The municipality shall contribute for each active participant in an alternative benefit plan established under Subsection (c) an amount determined by the municipality.

(e) A municipality that establishes an alternative benefit plan under this section shall file all reports with the State Pension Review Board required by Chapter 802.

(f) The governing body of a municipality may only establish an alternative benefit plan under this section if:

(1) the qualified actuary of the pension system established under Article 6243a-1, Revised Statutes, determines that after establishment and implementation of the alternative benefit plan, the pension system would continue to comply with funding and amortization period requirements applicable to the pension system under Subchapter C, Chapter 802; and

(2) the State Pension Review Board conducts a review of and validates the determination made under Subdivision (1).

(43) In the heading of ARTICLE 2 of the bill (page 76, line 29) strike "LUMP-SUM".

(44) In SECTION 2.01 of the bill, in the section heading for added Section 6.142, Article 6243a-1, Revised Statutes (page 76, line 32), strike "LUMP-SUM".

(45) In SECTION 2.01 of the bill, in added Section 6.142(a), Article 6243a-1, Revised Statutes (page 76, lines 34 through 36), strike "distribute or allow the distribution of the balance of a DROP participant's DROP account under a single-sum or other lump-sum distribution" and substitute "allow any distribution out of a DROP participant's DROP account".

(46) In SECTION 2.01 of the bill, in added Section 6.142(a), Article 6243a-1, Revised Statutes (page 76, between lines 40 and 41), insert the following subdivision and renumber subsequent subdivisions of the subsection and cross-references to those subdivisions accordingly:

(2) for purposes of making a minimum annual distribution, as described in Section 7 of the DROP addendum policy adopted by the board that took effect on January 12, 2017;

(47) In SECTION 3.02(a) of the bill (page 76, lines 54 and 55), strike "Subsections (b), (d), and (e)" and substitute "Subsections (b) and (d)".

(48) In SECTION 3.02(b) of the bill (page 76, line 61), strike "Except as provided by Subsection (e) of this section,".

(49) In SECTION 3.02(b) of the bill (page 76, line 66), after the period, insert "At the request of the State Pension Review Board and within the time prescribed by the State Pension Review Board, the board of trustees shall provide the data or other information requested by the State Pension Review Board for purposes of making a determination under this subsection."

(50) In SECTION 3.02 of the bill (page 77, between lines 12 and 13), insert the following:

(c-1) The State Pension Review Board shall make the determination described by Subsection (c) of this section based on the data or other information that:

(1) is in the State Pension Review Board's possession on or before August 31, 2017; and

(2) was provided with enough time for the State Pension Review Board to reasonably use the information to make a determination under this section.