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A BILL TO BE ENTITLED
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AN ACT
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relating to the evaluation and reporting of investment practices |
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and performance of certain public retirement systems. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 802.109, Government Code, is amended by |
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amending Subsections (d), (e), (e-1), (f), and (g) and adding |
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Subsections (d-1) and (d-2) to read as follows: |
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(d) The Pension Review Board shall establish a schedule to |
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ensure that [A] public retirement systems [shall] conduct the |
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evaluation described by Subsection (a): |
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(1) once every three years, if the total assets of the |
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retirement system are [as of the last day of the preceding fiscal |
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year were] at least $100 million; or |
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(2) once every six years, if the total assets of the |
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retirement system are [as of the last day of the preceding fiscal |
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year were] at least $30 million and less than $100 million. |
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(d-1) If a public retirement system's total assets increase |
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in a fiscal year to above the threshold specified in Subsection |
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(d)(1) or (d)(2), the public retirement system shall complete the |
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evaluation by the next appropriate due date specified in the |
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schedule established by the Pension Review Board pursuant to |
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Subsection (d). |
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(d-2) A public retirement system that has completed an |
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evaluation pursuant to the requirements of this Section remains |
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subject to the requirement based on total pension liability and |
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shall complete subsequent evaluations: |
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(1) once every three years, if the total pension |
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liability of the retirement system is at least $100 million; or |
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(2) once every six years, if the total pension |
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liability of the retirement system is at least $30 million and less |
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than $100 million. |
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(e) A public retirement system is not required to conduct |
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the evaluation described by Subsection (a) if the total assets of |
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the retirement system as of the last day of the [preceding] fiscal |
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year immediately preceding the next evaluation deadline were less |
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than $30 million. |
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(e-1) An [Not later than the 30th day after the date an] |
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independent firm that completes an evaluation described by |
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Subsection (a)[, the independent firm] shall: |
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(1) submit to the public retirement system for |
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purposes of discussion and clarification a substantially completed |
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preliminary draft of the evaluation report; and |
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(2) request in writing that the system[, on or before |
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the 30th day after the date the system receives the preliminary |
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draft,] submit to the firm: |
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(A) a description of any action taken or expected |
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to be taken in response to a recommendation made in the evaluation; |
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and |
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(B) any written response of the system that the |
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system wants to accompany the final evaluation report. |
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(f) The independent firm shall file the final evaluation |
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report, including the evaluation results and any response received |
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from the public retirement system, with the governing body of the |
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system[:] |
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[(1) not earlier than the 31st day after the date on |
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which the preliminary draft is submitted to the system; and |
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(2) not later than the later of: |
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(A) the 60th day after the date on which the |
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preliminary draft is submitted to the system; or |
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(B) May 1 in the year following the year in which |
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the system is evaluated under Subsection (a)]. |
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(g) The [Not later than the 31st day after the date the] |
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governing body of a public retirement system that receives a report |
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of an evaluation under this section[, the governing body] shall |
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submit the report to the board. |
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(h) A governmental entity that is the employer of active |
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members of a public retirement system evaluated under Subsection |
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(a) may pay all or part of the costs of the evaluation. The public |
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retirement system shall pay any remaining unpaid costs of the |
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evaluation. |
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(i) The board shall submit an investment performance report |
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to the governor, the lieutenant governor, the speaker of the house |
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of representatives, and the legislative committees having |
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principal jurisdiction over legislation governing public |
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retirement systems in the biennial report required by Section |
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801.203. The report must compile and summarize the information |
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received under this section by the board during the preceding two |
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fiscal years. |
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(j) Repealed by Acts 2021, 87th Leg., R.S., Ch. 141 |
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(H.B. 1585), Sec. 20(1), eff. May 26, 2021. |
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(k) The following reports may be used by the applicable |
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public retirement systems to satisfy the requirement for a report |
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of an evaluation under this section: |
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(1) an investment report under Section 10A, Article |
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6243g-4, Revised Statutes; |
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(2) an investment report under Section 2D, Chapter 88 |
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(H.B. 1573), Acts of the 77th Legislature, Regular Session, 2001 |
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(Article 6243h, Vernon's Texas Civil Statutes); and |
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(3) a report on a review conducted on the retirement |
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system's investments under Section 2B, Article 6243e.2(1), Revised |
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Statutes. |
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(l) The board may adopt rules necessary to implement this |
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section. |
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SECTION 2. Notwithstanding Section 802.109(d), Government |
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Code, as added by this Act, a report of the first evaluation of a |
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public retirement system, as required by Section 802.109, |
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Government Code, as amended by this Act, must be filed with the |
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Pension Review Board not later than September 1, 2026. |
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SECTION 3. The Pension Review Board shall establish the |
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schedule required by Section 802.109(d), Government Code, as |
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amended by this Act, not later than January 1, 2026. |
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SECTION 4. This Act takes effect September 1, 2025. |