Texas 2009 - 81st Regular

Texas House Bill HB407 Compare Versions

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1	1	H.B. No. 407
2	2
3	3
4	4	AN ACT
5	5	relating to participation and credit in, contributions to, benefits
6	6	from, and administration of the Texas County and District
7	7	Retirement System.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 841.001, Government Code, is amended by
10	10	amending Subdivisions (1), (6), and (17) and adding Subdivision
11	11	(1-a) to read as follows:
12	12	(1) "Actuarial equivalent" means a benefit that, at
13	13	the time it is begun, has the same present value as the benefit it
14	14	replaces, based on seven percent annual interest and either:
15	15	(A) the mortality table published by the
16	16	Conference of Actuaries in Public Practice and known as the UP-1984
17	17	table with an age setback of five years for retired or disabled
18	18	annuitants and an age setback of 10 years for beneficiaries, with a
19	19	30-percent reserve refund assumption for the standard benefit; or
20	20	(B) a mortality basis adopted under Section
21	21	845.110(c).
22	22	(1-a) "Accrued benefit" means the sum of a member's
23	23	accumulated contributions and service credit calculated as of a
24	24	specified date.
25	25	(6) "Compensation" means the sum of payments that are
26	26	made to an employee for performance of personal services as
27	27	certified by a participating subdivision, including nonmonetary
28	28	compensation, the value of which is determined by the governing
29	29	body of the subdivision, on which contributions by an employee to
30	30	the retirement system are based [that do not exceed the amount
31	31	established by board rule], which may not exceed either the limit
32	32	provided by Section 401(a)(17) of the Internal Revenue Code of 1986
33	33	[(26 U.S.C. Section 417)], as indexed in the manner provided by that
34	34	section, or a lesser amount established by rule of the board of
35	35	trustees. The term includes amounts by which payment for earnings
36	36	is reduced because of employer pick-up of employee contributions to
37	37	the retirement system under Section 845.403, deferral of
38	38	compensation under benefit plans or tax-sheltered annuity programs
39	39	adopted by the subdivision under Section 401(k), 403(b), or 457 of
40	40	the Internal Revenue Code of 1986, the costs of benefits furnished
41	41	under qualified cafeteria plans adopted by the subdivision under
42	42	Section 125 of the Internal Revenue Code of 1986, and deductions for
43	43	Federal Insurance Contribution Act taxes, federal income taxes, or
44	44	other obligations of the employee [and that are made to an employee
45	45	of a participating subdivision by the subdivision for service,
46	46	including nonmonetary compensation, the value of which is
47	47	determined by the governing body of the subdivision]. The term does
48	48	not include workers' compensation benefits received by a member
49	49	under Section 504.011, Labor Code.
50	50	(17) "Subdivision" means a political subdivision of
51	51	the state that is not eligible to participate in any other statewide
52	52	retirement system or that is not currently participating in a
53	53	retirement system established by the legislature. The term
54	54	includes the Texas Association of Counties, the retirement system
55	55	[Texas County and District Retirement System], and a city-county
56	56	hospital jointly managed under Subchapter B, Chapter 265, Health
57	57	and Safety Code. The term does not include a branch, division,
58	58	department, employee classification group, or other separately
59	59	identified component of a political subdivision.
60	60	SECTION 2. Section 841.006, Government Code, is amended to
61	61	read as follows:
62	62	Sec. 841.006. EXEMPTION FROM EXECUTION. (a) All
63	63	retirement annuity payments, other benefit payments, and a member's
64	64	accumulated contributions are unassignable and are exempt from
65	65	execution, garnishment, attachment, and state and local taxation.
66	66	(b) Notwithstanding Subsection (a), the board of trustees
67	67	by rule may authorize the retirement system, in accordance with a
68	68	retiree's voluntary election, to:
69	69	(1) deduct qualified health insurance premiums from
70	70	the retirement annuity otherwise distributable to a retiree who is
71	71	an eligible public safety officer or a retiree who meets any
72	72	expanded eligibility provision for a similar tax exemption under
73	73	subsequent federal legislation; and
74	74	(2) pay the deducted amount directly to the health
75	75	plan provider, subject to the requirements of Section 402(l),
76	76	Internal Revenue Code of 1986, or other applicable federal law, and
77	77	the rules adopted by the board.
78	78	SECTION 3. Subchapter A, Chapter 841, Government Code, is
79	79	amended by adding Section 841.0091 to read as follows:
80	80	Sec. 841.0091. DIVISION OF BENEFITS ON DIVORCE OF MEMBER.
81	81	(a) On receipt of a qualified domestic relations order incident to
82	82	a divorce that awards a portion of a member's accrued benefit to a
83	83	former spouse of the member and that strictly follows the terms and
84	84	format of the model qualified domestic relations order, as well as
85	85	any other requirements, adopted by the board of trustees for this
86	86	purpose, the retirement system shall divide the accrued benefit
87	87	into two separate benefits that, in combination at the time of
88	88	division, are actuarially equivalent to the undivided accrued
89	89	benefit.
90	90	(b) Following a division described by Subsection (a), the
91	91	portion of the accrued benefit awarded the alternate payee is
92	92	considered the alternate payee's sole and separate property in
93	93	which the member has no interest. The board of trustees by rule
94	94	shall define and specify the rights and responsibilities of the
95	95	alternate payee and the terms and features of the benefit awarded
96	96	the alternate payee under the order, but in no event may the
97	97	alternate payee vest in the accrued benefit before the member vests
98	98	or attain greater rights than are attained by the member or the
99	99	member's beneficiary.
100	100	(c) Notwithstanding Section 804.101, the board of trustees
101	101	by rule may prescribe terms on which the interest awarded the
102	102	alternate payee under a qualified domestic relations order
103	103	described by this section may be transferred at the alternate
104	104	payee's death.
105	105	(d) The board of trustees has sole authority and discretion
106	106	to:
107	107	(1) specify the terms and format that are required for
108	108	a qualified domestic relations order to be acceptable for purposes
109	109	of Subsection (a);
110	110	(2) require strict compliance for qualification;
111	111	(3) specify the dates on which a distribution to an
112	112	alternate payee may or must begin; and
113	113	(4) establish rules for the administration of this
114	114	section.
115	115	(e) This section applies to all domestic relations orders
116	116	described by this section that the retirement system first
117	117	determines to be qualified on or after September 1, 2009, and to
118	118	those domestic relations orders determined to be qualified before
119	119	September 1, 2009, that the system further determines can be
120	120	construed to allow a division described by this section without
121	121	harm or injury to the member's interest awarded under the original
122	122	qualified order. The actuarial equivalent value of the accrued
123	123	benefit payable to an alternate payee may not be greater than the
124	124	actuarial equivalent value of the accrued benefit as if there had
125	125	been no division and the accrued benefit had been payable to the
126	126	member in the form of an annuity.
127	127	SECTION 4. Section 842.108, Government Code, is amended to
128	128	read as follows:
129	129	Sec. 842.108. WITHDRAWAL OF ACCUMULATED CONTRIBUTIONS.
130	130	(a) [(b)] A member who has separated from employment with a
131	131	participating subdivision may submit an application to withdraw the
132	132	member's accumulated contributions attributable to service with
133	133	that subdivision. A withdrawal cancels the person's [credited
134	134	service and] service credit attributable to service with that
135	135	subdivision on the date the retirement system makes payment of any
136	136	portion of the member's accumulated contributions[. Credited
137	137	service that has been canceled may not be used to determine
138	138	eligibility for a later retirement unless it is reestablished under
139	139	Section 803.203, 843.003, or 843.0031].
140	140	(b) [(c)] Except for a [terminated] membership terminated
141	141	under prior law or in accordance with Section 842.109(b) [described
142	142	by Subsection (a)], interest is computed on the balance in the
143	143	member's individual account in the employees saving fund on January
144	144	1 of the year of withdrawal through the month before the month in
145	145	which the withdrawal occurs [for a person described by Subsection
146	146	(b)].
147	147	(c) [(d)] If a person eligible to receive a withdrawal or
148	148	another non-periodic distribution [under this section or Section
149	149	844.401] elects to have all or a portion of the distribution
150	150	[accumulated contributions] paid directly to an eligible
151	151	retirement plan and specifies the plan to which the distribution is
152	152	[contributions are] to be paid on forms approved by the board of
153	153	trustees, the retirement system shall make the payment in the form
154	154	of a direct trustee-to-trustee transfer but is under no obligation
155	155	to determine whether the other plan in fact is an eligible
156	156	retirement plan for that purpose.
157	157	(d) Notwithstanding Subsection (c), the board of trustees
158	158	shall adopt rules to administer this section as necessary to
159	159	maintain the retirement system as a qualified plan under Section
160	160	401(a) of the Internal Revenue Code of 1986. The rules may include
161	161	the adoption of definitions and limitations relating to
162	162	distributions, eligible recipients, and eligible retirement plans.
163	163	SECTION 5. The heading to Section 842.110, Government Code,
164	164	is amended to read as follows:
165	165	Sec. 842.110. RESUMPTION OF SERVICE AFTER WITHDRAWAL OR
166	166	RETIREMENT [BY RETIREE].
167	167	SECTION 6. Sections 842.110(a) and (b), Government Code,
168	168	are amended to read as follows:
169	169	(a) Except as provided by Subsection (b), a person who has
170	170	withdrawn the person's accumulated contributions or who has retired
171	171	from a participating subdivision with a service retirement annuity
172	172	based on a bona fide termination of employment and with a break in
173	173	service of not less than one calendar month resumes membership in
174	174	the retirement system without repayment of the amount distributed
175	175	or cancellation [suspension] of the person's annuity if the person
176	176	becomes an employee of any participating subdivision.
177	177	(b) A person who resumes employment with the same
178	178	subdivision from which the person was previously employed and does
179	179	not meet the requirements of Subsection (a) is considered not to
180	180	have been eligible for a withdrawal and not to have retired with
181	181	respect to that subdivision. The person's membership will be
182	182	restored, the person's service retirement annuity will be canceled
183	183	[discontinued, the person's membership will be restored], and the
184	184	person must return any amounts distributed and payments
185	185	received. Appropriate adjustments will be made for any amounts not
186	186	returned.
187	187	SECTION 7. Section 843.001, Government Code, is amended to
188	188	read as follows:
189	189	Sec. 843.001. TYPES OF CREDITABLE SERVICE. The types of
190	190	service creditable as credited service in the retirement system are
191	191	prior service, current service, and optional service. A member may
192	192	not be credited in this system with more than one month of credited
193	193	service for a specific calendar month, regardless of the number of
194	194	employers of the member, the positions held, or the types of
195	195	service.
196	196	SECTION 8. The heading to Section 843.0031, Government
197	197	Code, is amended to read as follows:
198	198	Sec. 843.0031. [REESTABLISHMENT OF CREDITED SERVICE;]
199	199	OPTION TO PAY LUMP-SUM AMOUNT.
200	200	SECTION 9. Section 843.0031(b), Government Code, is amended
201	201	to read as follows:
202	202	(b) A member who has withdrawn accumulated contributions
203	203	from the retirement system and who subsequently resumes employment
204	204	with a subdivision may at any time before retirement pay to the
205	205	system a lump sum in any amount that does not exceed the actuarial
206	206	present value of the additional benefits that would have been
207	207	attributable to the withdrawn contributions. Any amount paid
208	208	under this subsection and interest accrued on the amount may not be
209	209	considered in the computation of service credit [credits].
210	210	SECTION 10. Section 843.004, Government Code, is amended to
211	211	read as follows:
212	212	Sec. 843.004. COMPOSITION OF SERVICE CREDIT. Service
213	213	credit consists of allocated prior service credit, current service
214	214	credit, and multiple matching credit as authorized by a
215	215	participating subdivision [and accumulated interest under this
216	216	subtitle].
217	217	SECTION 11. Section 843.201, Government Code, is amended to
218	218	read as follows:
219	219	Sec. 843.201. SERVICE CREDIT FOR CERTAIN PUBLIC
220	220	EMPLOYMENT. [(a)] In accordance with rules adopted by the board
221	221	of trustees, the governing body of a participating subdivision by
222	222	order may authorize the establishment of credited service and prior
223	223	service credit in the retirement system for service performed in a
224	224	public hospital, utility, or other public facility or governmental
225	225	function during a time the facility was operated or function was
226	226	performed by a unit of government other than the subdivision and
227	227	before the date that the public hospital, utility, or other public
228	228	facility or governmental function was taken over by the subdivision
229	229	[:
230	230	[(1) the effective date of the subdivision's
231	231	participation in the retirement system, if the facility was
232	232	acquired or the governmental function was taken over by the
233	233	subdivision before that date; or
234	234	[(2) the date of acquisition of the facility or the
235	235	date the governmental function was taken over, if the facility was
236	236	acquired or the governmental function was taken over after the
237	237	effective date of the subdivision's participation in the retirement
238	238	system].
239	239	[(b) A member eligible to establish credited service and
240	240	prior service credit under this section after an order under
241	241	Subsection (a) is one who was employed by a public facility or by an
242	242	entity performing the governmental function:
243	243	[(1) on the effective date of subdivision
244	244	participation, for service under Subsection (a)(1); or
245	245	[(2) on the date of acquisition of the facility or the
246	246	date the governmental function was taken over, for service under
247	247	Subsection (a)(2).
248	248	[(c) The allocated prior service credit percentage
249	249	allowable under this section may be limited by the order of the
250	250	governing body to zero or to any percentage that is a multiple of
251	251	five percent.]
252	252	SECTION 12. Section 843.401, Government Code, is amended to
253	253	read as follows:
254	254	Sec. 843.401. CURRENT SERVICE GENERALLY. Current service
255	255	is service performed by an employee of a participating subdivision
256	256	while a member of the retirement system and credited as provided
257	257	under this subtitle and in accordance with rules adopted by the
258	258	board of trustees [section]. [The retirement system shall credit a
259	259	member with one month of current service for each month for which
260	260	the required contributions are made, reported, and certified by the
261	261	employing subdivision.]
262	262	SECTION 13. Sections 843.502(a), (b), and (c), Government
263	263	Code, are amended to read as follows:
264	264	(a) In this section:
265	265	(1) "Qualified [, "qualified] military service" means
266	266	service in the uniformed services, as that term is defined in the
267	267	Uniformed Services Employment and Reemployment Rights Act of 1994
268	268	(38 U.S.C. Section 4301 et seq.), that meets the requirements of
269	269	that Act as it now exists or is amended as to the character of
270	270	service performed.
271	271	(2) "USERRA" means the Uniformed Services Employment
272	272	and Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et
273	273	seq.).
274	274	(b) All members of the retirement system are entitled to be
275	275	credited with service for qualified military service that is
276	276	subject to USERRA [the Uniformed Services Employment and
277	277	Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et seq.)].
278	278	Notwithstanding any provision of this subtitle to the contrary,
279	279	contributions, benefits, credited service, and service credit for
280	280	qualified military service will be provided in accordance with
281	281	USERRA and Section 414(u) of the Internal Revenue Code of
282	282	1986. The board of trustees may adopt rules for the administration
283	283	of this section, including rules that modify the terms of this
284	284	subtitle for the purpose of compliance with the provisions of
285	285	USERRA [that Act].
286	286	(c) An eligible member may establish [The governing body of
287	287	a participating subdivision also may, on the terms provided by
288	288	Section 844.704, authorize the establishment of] credited service
289	289	in the retirement system for qualified active duty military service
290	290	not creditable under Subsection (b) [as provided by this
291	291	subsection]. Qualified military service includes military service
292	292	before becoming an employee of the subdivision. A member eligible
293	293	to establish credited service under this subsection is one who is
294	294	vested, based on credited service only in this system and without
295	295	regard to service that may be established under this subsection, in
296	296	a service retirement annuity that may begin at the age of 60 [has
297	297	credited service in the retirement system for at least the minimum
298	298	period required to receive a service retirement annuity at the age
299	299	of 60 from the subdivision from which credit under this subsection
300	300	is sought]. An eligible member may establish not more than five
301	301	years of credited service under this subsection by filing an
302	302	application with the retirement system.
303	303	SECTION 14. Section 843.504, Government Code, is amended to
304	304	read as follows:
305	305	Sec. 843.504. NO DOUBLE CREDITING OF SERVICE. Except as
306	306	provided by Chapter 803, only one month of credited service may
307	307	[not] be established in the retirement system [under this
308	308	subchapter] for any calendar month for all [of] service that is
309	309	creditable [credited] under [another section of] this subtitle [or
310	310	by another retirement system or program established or governed by
311	311	state law].
312	312	SECTION 15. Subchapter F, Chapter 843, Government Code, is
313	313	amended by adding Section 843.505 to read as follows:
314	314	Sec. 843.505. CREDITED SERVICE PREVIOUSLY ELIGIBLE FOR
315	315	RECOGNITION UNDER PROPORTIONATE RETIREMENT PROGRAM. The board of
316	316	trustees by rule may authorize the retirement system, on
317	317	application by a member and for the sole purpose of determining
318	318	eligibility for retirement from this system, to recognize service
319	319	performed under another system participating under Chapter 803 that
320	320	would have been recognized by this system under that chapter if the
321	321	service had not been canceled by a withdrawal of contributions.
322	322	SECTION 16. Section 844.003, Government Code, is amended by
323	323	amending Subsections (c) and (e) and adding Subsection (f) to read
324	324	as follows:
325	325	(c) The effective date of a member's disability retirement
326	326	is the date the member designates at the time the member applies for
327	327	retirement under Section 844.301, but the date must be the last day
328	328	of a calendar month and may not precede the later of the date the
329	329	member became disabled or the date the member terminated
330	330	[terminates] employment with all participating subdivisions.
331	331	(e) Notwithstanding Subsections (a), (b), (b-1), [and] (c),
332	332	and (f), the effective retirement date of a member may not precede
333	333	the first anniversary of the effective date of participation of the
334	334	subdivision.
335	335	(f) The board of trustees by rule may authorize a retiring
336	336	member to designate an effective service or disability retirement
337	337	date that is not more than six months before the date the retirement
338	338	system receives the retirement application. A rule adopted under
339	339	this section may not suspend another requirement provided by this
340	340	section for retirement.
341	341	SECTION 17. Sections 844.006(d) and (f), Government Code,
342	342	are amended to read as follows:
343	343	(d) The [If a qualified domestic relations order, as that
344	344	term is defined by Section 804.001, so provides, the] benefit
345	345	payable to a retiree who is receiving payments of a standard or
346	346	optional retirement annuity [computed on the joint lives of the
347	347	retiree and the person designated as beneficiary by the retiree]
348	348	may be divided by the retirement system into two annuities in
349	349	accordance with the terms of a model qualified domestic relations
350	350	order adopted by the board of trustees by rule [if:
351	351	[(1) the person who was designated as beneficiary by
352	352	the retiree is the same person as the alternate payee;
353	353	[(2) the order specifies that one of the two annuities
354	354	is payable over the remaining life of the retiree, with no payments
355	355	to be made under that annuity after the death of the retiree; and
356	356	[(3) the order specifies that the annuity payable to
357	357	the alternate payee is payable over the remaining life of that
358	358	person, with no payments to be made under that annuity after the
359	359	death of the alternate payee named in the order].
360	360	(f) The board of trustees has sole authority and discretion
361	361	to specify the terms and format that are required for a domestic
362	362	relations order to be acceptable for purposes of this section, to
363	363	require strict compliance for qualification, and to define the
364	364	terms and features of the benefit awarded an alternate payee under
365	365	the order. The board [retirement system] by rule may establish
366	366	requirements for forms, documentation, and procedures necessary or
367	367	desirable for the administration of this section.
368	368	SECTION 18. Section 844.008, Government Code, is amended to
369	369	read as follows:
370	370	Sec. 844.008. LIMITATION ON PAYMENT OF BENEFITS.
371	371	(a) Notwithstanding any other provision of this subtitle, the
372	372	benefit payable to a retiree of the retirement system may not exceed
373	373	the maximum benefit permitted under Section 415(b) of the Internal
374	374	Revenue Code of 1986 [(26 U.S.C. Section 415(b))] as adjusted in
375	375	accordance with Section 415(d) of that code. Any adjustments are
376	376	applicable to the postretirement benefits of retirees as well as to
377	377	the benefits of retiring members. For the purpose of determining
378	378	whether the benefit of a retiring member or retiree exceeds the
379	379	limitations provided in this section, all defined benefit plans of
380	380	the employer and of entities required to be aggregated with the
381	381	employer for purposes of Section 415 of the Internal Revenue Code of
382	382	1986 are to be treated as one defined benefit plan [and all defined
383	383	contribution plans of the employer and of entities required to be
384	384	aggregated with the employer] for purposes of Section 415 of that
385	385	code [are to be treated as one defined contribution plan]. The
386	386	limitation year for determining maximum benefits is the calendar
387	387	year.
388	388	(b) An employer may not provide employee retirement [or
389	389	deferred] benefits under a defined benefit plan other than the
390	390	retirement system to the extent that the provision of the benefits,
391	391	when considered together with the benefits provided under the
392	392	retirement system, would result in the failure of the retirement
393	393	system to meet any of the limitation requirements of Section 415 of
394	394	the Internal Revenue Code of 1986 [(26 U.S.C. Section 415)], and the
395	395	benefits of the other plan will automatically be reduced,
396	396	eliminated, or adjusted to the extent necessary to prevent the
397	397	failure.
398	398	SECTION 19. Section 844.101, Government Code, is amended to
399	399	read as follows:
400	400	Sec. 844.101. APPLICATION FOR SERVICE RETIREMENT
401	401	ANNUITY. To receive a retirement annuity for service, an eligible
402	402	member must apply by filing a valid application with the retirement
403	403	system [on or before the member's effective retirement date
404	404	designated on the application].
405	405	SECTION 20. Section 844.301(a), Government Code, is amended
406	406	to read as follows:
407	407	(a) A member may apply for disability retirement by filing a
408	408	valid application for retirement with the retirement system [on or
409	409	before the member's effective retirement date designated on the
410	410	application].
411	411	SECTION 21. Section 844.404, Government Code, is amended to
412	412	read as follows:
413	413	Sec. 844.404. PERSON CAUSING DEATH OF MEMBER OR ANNUITANT.
414	414	(a) A benefit, including any optional group term life benefit,
415	415	payable on the death of a member or annuitant may not be paid to a
416	416	person convicted of causing that death but instead is payable to a
417	417	person who would be entitled under this subtitle to the benefit had
418	418	the convicted person predeceased the decedent. If no person would
419	419	be entitled to the benefit, the benefit is payable to the decedent's
420	420	estate.
421	421	(b) The retirement system is not required to change the
422	422	recipient of benefits under this section [pay a benefit under
423	423	Subsection (a)] unless it receives actual notice of the conviction
424	424	of a beneficiary [the person who would have been entitled to the
425	425	benefits]. However, the retirement system may delay payment of a
426	426	benefit payable on the death of a member or annuitant pending the
427	427	results of a criminal investigation and of legal proceedings
428	428	relating to the cause of death.
429	429	(c) The retirement system is not liable for any benefit paid
430	430	to a convicted person before the date the system receives actual
431	431	notice of the conviction, and any payment made before that date is a
432	432	complete discharge of the system's obligation with regard to that
433	433	benefit payment. The convicted person holds all payments received
434	434	in constructive trust for the rightful recipient.
435	435	(d) If an annuity is in pay status, the [(c) The]
436	436	retirement system shall pay in a lump sum the actuarial equivalent
437	437	of [convert] the remainder of any annuity or payments that would
438	438	otherwise have been payable to [throughout the life of] the
439	439	convicted person to the person entitled to the benefit under
440	440	Subsection (a) or to the decedent's estate [an actuarially
441	441	equivalent annuity payable to the decedent's estate in 60 monthly
442	442	annuity payments]. The time of the actuarial equivalence is the
443	443	earlier of the time the retirement system receives the notice of the
444	444	conviction under Subsection (b) or the time the retirement system
445	445	begins the delay in payment of a benefit under Subsection (b).
446	446	(e) [(d)] For the purposes of this section, a person has
447	447	been convicted of causing the death of a member or annuitant if the
448	448	person:
449	449	(1) has pleaded guilty or nolo contendere to or has
450	450	been found guilty by a court of competent jurisdiction of an offense
451	451	at the trial of which it is established that the person's
452	452	intentional, knowing, or reckless act or omission resulted in the
453	453	death of a person who was a member or annuitant, regardless of
454	454	whether sentence is imposed or probated; and
455	455	(2) has no appeal of the conviction pending and the
456	456	time provided for appeal has expired.
457	457	SECTION 22. Subchapter G, Chapter 844, Government Code, is
458	458	amended by adding Section 844.601 to read as follows:
459	459	Sec. 844.601. PLAN FUNDING BY NON-ADOPTING COUNTY. (a)
460	460	This section applies only to a county that began participation in
461	461	the retirement system before January 1, 1992, and has not adopted
462	462	the provisions of Subchapter H.
463	463	(b) Except as provided by Subsections (c) and (d), the
464	464	county shall contribute to its account in the subdivision
465	465	accumulation fund at the same rate of current service compensation
466	466	as the employee contribution rate for the county.
467	467	(c) If in any year the retirement system's actuary
468	468	determines that the contributions of the county to the subdivision
469	469	accumulation fund under Subsection (b) will not finance the
470	470	county's obligations to the fund within the closed or open
471	471	amortization period recommended by the actuary and adopted by the
472	472	board of trustees for all subdivisions, the governing body of the
473	473	county shall adopt an order to reduce the amortization period to the
474	474	maximum period established by the board. The actuary shall
475	475	determine appropriate remedies for review and adoption by the
476	476	county. An order adopted under this subsection must first be
477	477	approved by the board of trustees and must require:
478	478	(1) a reduction in the employee contribution rate to a
479	479	rate not less than four percent of current service compensation;
480	480	(2) additional employer contributions under a
481	481	supplemental contribution rate as provided by Subsection (e);
482	482	(3) a reduction in the percentage for determining
483	483	multiple matching credits in five percent increments for
484	484	contributions made after the effective date of the reduction; or
485	485	(4) any combination of these actions.
486	486	(d) An order adopted under Subsection (c) takes effect on
487	487	the first day of the calendar year that begins after the date the
488	488	retirement system's actuary makes a determination described by
489	489	Subsection (c).
490	490	(e) A supplemental contribution rate under this section is
491	491	the rate of contribution by the county to its account in the
492	492	subdivision accumulation fund, in addition to the contributions
493	493	required under Subsection (b), that the retirement system's actuary
494	494	determines and certifies is required to amortize the obligations of
495	495	the county to the subdivision accumulation fund within the
496	496	established amortization period.
497	497	(f) A county that has not adopted the provisions of
498	498	Subchapter H may not adopt additional options and may not increase
499	499	service credits or benefits otherwise allowable under this subtitle
500	500	except for an increase in the rate of employee contributions or an
501	501	increase in the percentage of multiple matching credits to a rate or
502	502	percentage that does not exceed the rate or percentage in effect on
503	503	January 1, 2010.
504	504	SECTION 23. Section 844.701, Government Code, is amended to
505	505	read as follows:
506	506	Sec. 844.701. APPLICABILITY. Except for a county
507	507	described by Section 844.601, this [(a) This] subchapter applies
508	508	to each subdivision that participates [begins participation] in the
509	509	retirement system [after December 31, 1991].
510	510	[(b) The governing body of any subdivision participating
511	511	before January 1, 1992, by order or resolution may adopt the plan
512	512	provisions of this subchapter to be effective on January 1 of the
513	513	year following the year in which the order or resolution is received
514	514	by the system.
515	515	[(c) Other provisions of this subtitle apply to the plan
516	516	provisions of this subchapter except as modified by this
517	517	subchapter.]
518	518	SECTION 24. Section 844.704, Government Code, is amended to
519	519	read as follows:
520	520	Sec. 844.704. BENEFITS. (a) The [On the adoption of the
521	521	plan provisions of this subchapter, the] governing body of a [the]
522	522	subdivision shall select a percentage for determining multiple
523	523	matching credits [under Section 843.402. The governing body shall
524	524	select a percentage] of zero or any percentage that is a multiple of
525	525	five percent and that does not exceed 150 percent[, or it may select
526	526	the multiple matching percentage that the subdivision has in effect
527	527	on the date of its adoption of the plan provisions of this
528	528	subchapter]. The governing body may later increase the percentage
529	529	used in determining multiple matching credits under Section 843.402
530	530	to any percentage that is a multiple of five percent and that does
531	531	not exceed 150 percent, to take effect on the next January 1 after
532	532	the date the increase is adopted[, except that the sum of the
533	533	percentage for current service credits under Section 843.402 and
534	534	the percentage for multiple matching credits may not exceed 250
535	535	percent]. In its order or resolution, the governing body may
536	536	provide that the increased percentage will be used in determining
537	537	multiple matching credits [under Section 843.402] only for employee
538	538	contributions made after the effective date of the increase or that
539	539	the increased percentage will be used both prospectively and
540	540	retroactively in determining the multiple matching credits for all
541	541	employee contributions not otherwise matched at a higher
542	542	percentage. The governing body may thereafter reduce the
543	543	percentage used in determining multiple matching credits [under
544	544	Section 843.402] for contributions made after the effective date of
545	545	the reduction to zero or any percentage that is a multiple of five
546	546	percent, to take effect on the next January 1 after the date of the
547	547	reduction.
548	548	(b) The [On the adoption of the plan provisions of this
549	549	subchapter, the] governing body shall select a percentage for
550	550	determining allocated prior service credits of zero or any
551	551	percentage [under Section 843.105. The governing body shall
552	552	select a percentage] that is a multiple of five percent. [For a
553	553	subdivision that began participation before January 1, 1992, the
554	554	percentage cannot be less than the percentage in effect immediately
555	555	before the adoption of the plan.] The governing body may increase
556	556	the percentage used in determining allocated prior service credits
557	557	[under Section 843.105], to take effect on the next January 1 after
558	558	the date of the increase. The percentage may not exceed one-half
559	559	of the percentage that results from adding 200 percent to the lowest
560	560	percentage for determining multiple matching credit currently
561	561	applicable to any employee contribution with respect to the
562	562	subdivision.
563	563	(c) The subdivision shall provide current service credits
564	564	in accordance with Section 843.402.
565	565	(d) With the approval of the board of trustees, the [The]
566	566	governing body of a subdivision may adopt any benefit increase or
567	567	additional benefit, option, right, or feature as authorized under
568	568	this subtitle [or authorize:
569	569	[(1) an increase in retirement annuities under Section
570	570	844.209;
571	571	[(2) an increase in retirement annuities under Section
572	572	844.208;
573	573	[(3) the reestablishment of service credit previously
574	574	forfeited under Section 843.003;
575	575	[(4) the establishment of credited service for
576	576	military service under Section 843.502(c);
577	577	[(5) an optional service retirement eligibility
578	578	provision described by Section 844.1021; or
579	579	[(6) the partial lump-sum distribution on service
580	580	retirement under Section 844.009].
581	581	(e) The governing body may not adopt an increase or addition
582	582	to the subdivision's plan [the benefits of this section] if the
583	583	adoption would result in the combined rates of the subdivision's
584	584	normal contributions and prior service contributions for the first
585	585	calendar year following the adoption exceeding the maximum rate
586	586	prescribed by Section 844.703(c), unless a waiver under that
587	587	section is in effect.
588	588	(f) Other than an order or resolution of initial
589	589	participation in the retirement system and except as otherwise
590	590	authorized by the board of trustees, an [An] order or resolution
591	591	under this section must be filed with the retirement system not
592	592	later than December 15 of the year preceding the year in which it
593	593	will take effect and may not take effect until the order or
594	594	resolution is approved by the board of trustees as meeting the
595	595	requirements of this section. An [After approval by the board, an]
596	596	order or resolution adopted after participation begins may take
597	597	effect only on January 1 of a year[, except that an order or
598	598	resolution for a subdivision that begins participation after
599	599	January 1, 1992, may take effect on the date the subdivision begins
600	600	participation].
601	601	SECTION 25. Section 845.107, Government Code, is amended to
602	602	read as follows:
603	603	Sec. 845.107. AUDITS AND REVIEWS [AUDIT]. (a) In this
604	604	section:
605	605	(1) "Audit" means an audit authorized or required by a
606	606	statute of this state or of the United States or initiated or
607	607	commissioned by the board of trustees. The term includes a
608	608	financial audit, compliance audit, economy and efficiency audit,
609	609	effectiveness audit, performance audit, risk audit, and
610	610	investigation.
611	611	(2) "Audit working paper" includes all information,
612	612	documentary or otherwise, prepared or maintained in conducting an
613	613	audit or preparing an audit report, including:
614	614	(A) internal or external communications relating
615	615	to the audit that are made or received in the course of the audit;
616	616	and
617	617	(B) drafts of an audit report or portions of
618	618	those drafts.
619	619	(b) Annually, or more often, the board of trustees shall
620	620	have the accounts of the retirement system audited by a certified
621	621	public accountant.
622	622	(c) In addition to the financial audit required by
623	623	Subsection (b), the board of trustees may initiate or commission an
624	624	audit or investigation of activities, functions, or operations of
625	625	the retirement system as the board determines appropriate.
626	626	(d) Audit working papers prepared, maintained, or assembled
627	627	by the retirement system or an agent of the system are not a record
628	628	of the board of trustees for purposes of Section 845.112, and are
629	629	confidential and excepted from the disclosure requirements of
630	630	Chapter 552.
631	631	(e) Unless made confidential under other law, an audit
632	632	report, when accepted by the board of trustees in its final form, is
633	633	a record of the board and public information.
634	634	SECTION 26. Section 845.110, Government Code, is amended by
635	635	adding Subsection (c) to read as follows:
636	636	(c) On recommendation of the retirement system's actuary,
637	637	the board of trustees by rule may adopt a mortality basis to be used
638	638	in determining actuarial equivalents. A mortality basis adopted
639	639	under this subsection may not be applied in a manner that would
640	640	reduce a participant's monthly benefit that has accrued before the
641	641	later of the date the mortality basis is adopted or the date the
642	642	mortality basis is implemented.
643	643	SECTION 27. Section 845.114(a), Government Code, is amended
644	644	to read as follows:
645	645	(a) In this chapter [section], "participant" means a
646	646	member, former member, retiree, annuitant, beneficiary, or
647	647	alternate payee of the retirement system.
648	648	SECTION 28. Section 845.1151, Government Code, is amended
649	649	to read as follows:
650	650	Sec. 845.1151. ELECTRONIC INFORMATION. [(a) In this
651	651	section, "participant" has the meaning assigned by Section
652	652	845.114(a).
653	653	[(b)] The retirement system may provide confidential
654	654	information electronically to a participant and to a subdivision
655	655	and receive information electronically from those persons,
656	656	including by use of an electronic signature or certification in a
657	657	form acceptable to the retirement system. An unintentional
658	658	disclosure to, or unauthorized access by, a third party related to
659	659	the transmission or receipt of information under this section is
660	660	not a violation by the retirement system of any law, including a
661	661	rule relating to the protection of confidential information.
662	662	SECTION 29. Section 845.305(b), Government Code, is amended
663	663	to read as follows:
664	664	(b) All assets of the pension trust of the retirement system
665	665	shall be credited according to the purpose for which they are held
666	666	to one of the following funds:
667	667	(1) employees saving fund;
668	668	(2) subdivision accumulation fund;
669	669	(3) current service annuity reserve fund;
670	670	(4) income [interest] fund;
671	671	(5) endowment fund; or
672	672	(6) expense fund.
673	673	SECTION 30. The heading to Section 845.309, Government
674	674	Code, is amended to read as follows:
675	675	Sec. 845.309. INCOME [INTEREST] FUND.
676	676	SECTION 31. Section 845.309(a), Government Code, is amended
677	677	to read as follows:
678	678	(a) The income [interest] fund shall account for the
679	679	determination and allocation of net investment income or loss.
680	680	SECTION 32. Section 845.315(a), Government Code, is amended
681	681	to read as follows:
682	682	(a) As of December 31 of each year, the board of trustees
683	683	shall make the following allocations that in the aggregate equal
684	684	the net investment income or loss for the year:
685	685	(1) to the current service annuity reserve fund,
686	686	interest as allowed under this subtitle on the mean amount in the
687	687	current service annuity reserve fund during that year;
688	688	(2) to the optional group term life [supplemental
689	689	death benefits] fund, interest as allowed under this subtitle on
690	690	the mean amount in the optional group term life [supplemental death
691	691	benefits] fund during that year;
692	692	(3) to the general reserves account of the endowment
693	693	fund, a positive or negative amount determined by the board;
694	694	(4) to the employees saving fund, current interest as
695	695	allowed under this subtitle on the member account balances on
696	696	January 1 of that year of all persons who are members on December 31
697	697	of that year;
698	698	(5) to the accounts of subdivisions, other than
699	699	subdivisions otherwise described by this section, [an amount
700	700	derived by applying a] positive or negative amounts [rate,] as
701	701	determined under rules adopted by the board prescribing the
702	702	allocation methodology for the accounts[, to the January 1 balances
703	703	of that year]; and
704	704	(6) to the accounts of subdivisions to which Section
705	705	842.052 or 842.053 applies, positive or negative amounts as
706	706	determined by the board.
707	707	SECTION 33. Sections 845.402(b) and (c), Government Code,
708	708	are amended to read as follows:
709	709	(b) After timely notice to the board of trustees, the [The]
710	710	governing body of a participating subdivision may increase the rate
711	711	of its member contributions effective with [on] the first pay
712	712	period beginning in the following [day of any] calendar year.
713	713	(c) After timely notice to the board of trustees, the [The]
714	714	governing body of a participating subdivision may reduce the rate
715	715	of its member contributions effective with [on] the first pay
716	716	period beginning in the following [day of any] calendar year [if, at
717	717	least 90 days before the date of the reduction, the subdivision has
718	718	given written notice of the reduction to the board of trustees and
719	719	if the actuary determines that the reduction would not impair the
720	720	ability of the subdivision to fund all obligations against its
721	721	account in the subdivision accumulation fund before the 20th
722	722	anniversary of the subdivision's most recent actuarial valuation
723	723	date].
724	724	SECTION 34. Subchapter E, Chapter 845, Government Code, is
725	725	amended by adding Section 845.405 to read as follows:
726	726	Sec. 845.405. ALTERNATIVE PERIODS FOR ADMINISTRATIVE
727	727	COMPLIANCE. (a) Notwithstanding any other provision of this
728	728	subtitle, the board of trustees may authorize a subdivision to
729	729	remit to the retirement system contributions, deposits, and other
730	730	payments on the basis of a period that is less than a month,
731	731	including a weekly, biweekly, or other semimonthly period. A
732	732	subdivision authorized to remit amounts more frequently than
733	733	monthly shall make reports and filings and perform other actions
734	734	accordingly, and the retirement system shall credit payments
735	735	accordingly.
736	736	(b) The board of trustees may make an authorization under
737	737	Subsection (a) by rule applicable to all subdivisions similarly
738	738	situated or by order applicable to designated subdivisions. A rule
739	739	adopted under this subsection is amendable or revocable in the
740	740	manner provided for adoption, amendment, or repeal of rules
741	741	generally. An order adopted under this subsection is revocable
742	742	wholly or partly by subsequent board order.
743	743	(c) If the board of trustees adopts a rule or order under
744	744	Subsection (b), the board shall also adopt rules, applicable to a
745	745	subdivision electing or designated to take actions described by
746	746	this section more frequently than monthly, to alter the periods
747	747	required for submission of payments and reports, including the
748	748	period when a late penalty begins to accrue or is deducted from a
749	749	subdivision's account in the subdivision accumulation fund, in a
750	750	manner consistent with the periods provided by this subtitle.
751	751	(d) A participant may not receive less credited service,
752	752	service credit, or benefits due to an authorization under this
753	753	section than the participant would have received on a monthly
754	754	basis.
755	755	SECTION 35. Section 845.407(a), Government Code, is amended
756	756	to read as follows:
757	757	(a) Except as provided by Subsections (c), (d), and (e), a
758	758	participating subdivision that fails to provide the information
759	759	required by Section 845.403 or to pay all contributions required by
760	760	this subchapter to be made and remitted to the retirement system not
761	761	later than the 15th day of the month in which they become due shall
762	762	pay a penalty under this section. The penalty for a past-due
763	763	monthly remission is equal to interest on the past-due amounts for
764	764	each day past due at a nominal interest rate of 12 percent, plus a
765	765	$500 administrative fee. If the penalty is not paid within three
766	766	months after the date notice of the penalty has been sent to the
767	767	subdivision, the retirement system shall deduct the penalty from
768	768	the subdivision's account in the subdivision accumulation fund.
769	769	The interest portion of the penalty shall be deposited by the
770	770	retirement system in the distributable income account of the income
771	771	[interest] fund. The administrative fee portion of the penalty
772	772	shall be deposited by the retirement system in the expense fund.
773	773	SECTION 36. Sections 845.503(a) and (b), Government Code,
774	774	are amended to read as follows:
775	775	(a) The retirement system may reduce future payments of
776	776	benefits based on the account of a member, a retiree, or other
777	777	former member to recoup an amount overpaid or otherwise paid in
778	778	error to or on the behalf of a participant [the member, former
779	779	member, retiree, annuitant, or beneficiary]. If no future
780	780	payments are due, the retirement system may recover the overpayment
781	781	in any manner that is permitted for the collection of any other
782	782	debt.
783	783	(b) The retirement system may not recover from a participant
784	784	[member, former member, retiree, annuitant, or beneficiary] any
785	785	overpayment made more than three years before the date the
786	786	overpayment is discovered. This subsection does not apply to an
787	787	overpayment a reasonable person should know the person is not
788	788	entitled to receive.
789	789	SECTION 37. Section 844.601(b), Government Code, as added
790	790	by this Act, applies only to employer contributions to the Texas
791	791	County and District Retirement System that become due on or after
792	792	January 1, 2010. A county subject to Section 844.601(b),
793	793	Government Code, is obligated to make employer contributions to the
794	794	Texas County and District Retirement System before January 1, 2010,
795	795	at the rate in effect on August 31, 2009.
796	796	SECTION 38. The following laws are repealed:
797	797	(1) Section 843.0031(a), Government Code;
798	798	(2) Sections 843.502(d) and (e), Government Code;
799	799	(3) Sections 844.605, 844.606, 844.607, 844.608, and
800	800	844.609, Government Code;
801	801	(4) Section 845.115(f), Government Code; and
802	802	(5) Section 95, Chapter 873 (H.B. 1587), Acts of the
803	803	80th Legislature, Regular Session, 2007.
804	804	SECTION 39. (a) Except as provided by Subsection (b) of
805	805	this section, this Act takes effect January 1, 2010.
806	806	(b) Sections 841.0091 and 844.601, Government Code, as
807	807	added by this Act, Section 845.315, Government Code, as amended by
808	808	this Act, and Section 37 of this Act take effect September 1, 2009.
809	809	______________________________ ______________________________
810	810	President of the Senate Speaker of the House
811	811	I certify that H.B. No. 407 was passed by the House on April
812	812	15, 2009, by the following vote: Yeas 147, Nays 0, 1 present, not
813	813	voting; and that the House concurred in Senate amendments to H.B.
814	814	No. 407 on May 23, 2009, by the following vote: Yeas 142, Nays 0, 2
815	815	present, not voting.
816	816	______________________________
817	817	Chief Clerk of the House
818	818	I certify that H.B. No. 407 was passed by the Senate, with
819	819	amendments, on May 19, 2009, by the following vote: Yeas 30, Nays
820	820	0.
821	821	______________________________
822	822	Secretary of the Senate
823	823	APPROVED: __________________
824	824	Date
825	825	__________________
826	826	Governor