Texas 2009 - 81st Regular

Texas Senate Bill SB1548 Compare Versions

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1	1	By: Ogden S.B. No. 1548
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the monitoring and oversight of certain public
7	7	retirement systems and public investments; providing civil
8	8	penalties.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. The heading to Chapter 801, Government Code, is
11	11	amended to read as follows:
12	12	CHAPTER 801. STATE PENSION AND INVESTMENT REVIEW BOARD
13	13	SECTION 2. Subdivision (1), Section 801.001, Government
14	14	Code, is amended to read as follows:
15	15	(1) "Board" means the State Pension and Investment
16	16	Review Board.
17	17	SECTION 3. Section 801.101, Government Code, is amended to
18	18	read as follows:
19	19	Sec. 801.101. PENSION AND INVESTMENT REVIEW BOARD. The
20	20	State Pension and Investment Review Board is an agency of the state.
21	21	SECTION 4. Subsection (a), Section 801.102, Government
22	22	Code, is amended to read as follows:
23	23	(a) The board is composed of seven [nine] members.
24	24	SECTION 5. Section 801.103, Government Code, is amended to
25	25	read as follows:
26	26	Sec. 801.103. MEMBERS APPOINTED BY GOVERNOR. (a) The
27	27	governor shall appoint, with the advice and consent of the senate,
28	28	five [seven] members to the board.
29	29	(b) The governor shall appoint to the board:
30	30	(1) three persons who have experience in the fields of
31	31	securities investment, pension administration, [or] pension law,
32	32	institutional investment, investment risk management, or
33	33	institutional audits but who are not members or retirees of a public
34	34	retirement system;
35	35	(2) one person who is a fellow of the Society of
36	36	Actuaries, a member of the American Academy of Actuaries, or an
37	37	enrolled actuary under the federal Employee Retirement Income
38	38	Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.); and
39	39	(3) [one person who has experience in the field of
40	40	governmental finance;
41	41	[(4)] one person who:
42	42	(A) is a contributing member of a public
43	43	retirement system; or
44	44	(B) [and
45	45	[(5) one person who] is receiving retirement benefits
46	46	from a public retirement system.
47	47	SECTION 6. Section 801.104, Government Code, is amended to
48	48	read as follows:
49	49	Sec. 801.104. MEMBERS APPOINTED BY OTHERS. (a) The
50	50	lieutenant governor shall appoint one member to the board [one
51	51	member of the senate].
52	52	(b) The speaker of the house of representatives shall
53	53	appoint one member to the board [one member of the house].
54	54	(c) Each person appointed to the board under this section
55	55	must have experience in the field of securities investment, pension
56	56	administration, pension law, institutional investment, investment
57	57	risk management, or institutional audits.
58	58	SECTION 7. Section 801.106, Government Code, is amended to
59	59	read as follows:
60	60	Sec. 801.106. TERMS OF OFFICE. Members of the board hold
61	61	office for staggered terms of six years, with the terms of two or
62	62	three members expiring on January 31 of each odd-numbered year.
63	63	SECTION 8. Section 801.107, Government Code, is amended to
64	64	read as follows:
65	65	Sec. 801.107. SUNSET PROVISION. The State Pension and
66	66	Investment Review Board is subject to Chapter 325 (Texas Sunset
67	67	Act). Unless continued in existence as provided by that chapter,
68	68	the board is abolished and this chapter expires September 1, 2013.
69	69	SECTION 9. The heading to Section 801.113, Government Code,
70	70	is amended to read as follows:
71	71	Sec. 801.113. PROVISION OF CERTAIN SERVICES [FUND].
72	72	SECTION 10. Subsection (e), Section 801.113, Government
73	73	Code, is amended to read as follows:
74	74	(e) The board is authorized to conduct training sessions,
75	75	schools, or other educational activities for trustees and
76	76	administrators of public retirement systems. The board may also
77	77	furnish other appropriate services such as actuarial studies or
78	78	other requirements of systems and may establish appropriate fees
79	79	for these activities and services. [The fees may be based on
80	80	whether or not the trustees, administrators, or systems contribute
81	81	to the State Pension Review Board fund under Subsection (c) of this
82	82	section. The net proceeds of these fees shall be deposited in the
83	83	fund.]
84	84	SECTION 11. Subsections (b) and (c), Section 801.201,
85	85	Government Code, are amended to read as follows:
86	86	(b) For the purpose of performing its duties under Section
87	87	801.202(1) or (2), the board by rule may require clarification of
88	88	information provided by a public retirement system or other entity
89	89	subject to Subchapter D in a report that is required by law and is
90	90	required to be filed with the board. [A rule adopted under this
91	91	subsection may not be enforced against a public retirement system
92	92	if compliance with the rule would cause the system to incur a major
93	93	expense.]
94	94	(c) The board by rule shall:
95	95	(1) adopt actuarial guidelines that may be used by
96	96	public retirement systems;
97	97	(2) adopt a brief standard form that will assist the
98	98	board in efficiently determining the actuarial soundness, if
99	99	applicable, and current financial condition of a public retirement
100	100	system or other entity subject to Subchapter D; and
101	101	(3) [(2)] require that a retirement system or other
102	102	entity subject to Subchapter D submitting information required for
103	103	the review or study described under Section 801.202(1) or (2)
104	104	include the form with the submission.
105	105	SECTION 12. Section 801.202, Government Code, is amended to
106	106	read as follows:
107	107	Sec. 801.202. GENERAL DUTIES. The board shall:
108	108	(1) conduct a continuing review of:
109	109	(A) public retirement systems, compiling and
110	110	comparing information about benefits, creditable service,
111	111	financing, and administration of systems; and
112	112	(B) the investment practices of public
113	113	retirement systems and other entities subject to Subchapter D;
114	114	(2) conduct intensive studies of potential or existing
115	115	problems that threaten [the actuarial soundness of] or inhibit:
116	116	(A) the financial condition or actuarial
117	117	soundness of public funds managed or invested by an entity subject
118	118	to Subchapter D; or
119	119	(B) an equitable distribution of benefits in one
120	120	or more public retirement systems;
121	121	(3) provide information and technical assistance on
122	122	pension planning to public retirement systems on request; [and]
123	123	(4) review and document whether the board believes an
124	124	entity subject to Subchapter D is investing funds in compliance
125	125	with:
126	126	(A) the entity's investment strategy; and
127	127	(B) applicable law governing the entity's
128	128	investments; and
129	129	(5) recommend policies, practices, and legislation to
130	130	public retirement systems and other entities subject to Subchapter
131	131	D and appropriate governmental entities.
132	132	SECTION 13. Subsection (a), Section 801.203, Government
133	133	Code, is amended to read as follows:
134	134	(a) The board shall present to the legislature and the
135	135	governor, in November of each even-numbered year, a public report
136	136	explaining the work and findings of the board during the preceding
137	137	two-year period and including drafts or recommendations of any
138	138	legislation relating to public retirement systems or other entities
139	139	subject to Subchapter D that the board finds advisable.
140	140	SECTION 14. Section 801.204, Government Code, is amended to
141	141	read as follows:
142	142	Sec. 801.204. INSPECTION OF RECORDS. To the extent it is
143	143	necessary to perform [In performing] its functions, the board may
144	144	inspect the books, records, or accounts of a public retirement
145	145	system or another entity subject to Subchapter D during business
146	146	hours of the system.
147	147	SECTION 15. Chapter 801, Government Code, is amended by
148	148	adding Subchapter D to read as follows:
149	149	SUBCHAPTER D. BOARD INVESTMENT OVERSIGHT
150	150	Sec. 801.301. APPLICABILITY. (a) This subchapter applies
151	151	only to the investment of:
152	152	(1) public funds by:
153	153	(A) the comptroller;
154	154	(B) the Employees Retirement System of Texas,
155	155	including a retirement system administered by that system;
156	156	(C) the Teacher Retirement System of Texas;
157	157	(D) the Texas Municipal Retirement System;
158	158	(E) the Texas County and District Retirement
159	159	System; and
160	160	(F) the Texas Emergency Services Retirement
161	161	System;
162	162	(2) the permanent university fund by the board of
163	163	regents of The University of Texas System or any entity acting on
164	164	behalf of the board of regents, including a nonprofit corporation
165	165	acting under Section 66.08, Education Code; and
166	166	(3) the permanent school fund by the State Board of
167	167	Education or any entity acting on behalf of the State Board of
168	168	Education, including a nonprofit corporation acting under Section
169	169	43.006, Education Code.
170	170	(b) For purposes of this subchapter, a reference to "public
171	171	retirement system" means a public retirement system subject to this
172	172	subchapter.
173	173	Sec. 801.302. ANNUAL REPORT TO BOARD. An entity subject to
174	174	this subchapter shall, not later than six months after the last day
175	175	of the fiscal year under which the entity operates or, if a public
176	176	retirement system, the plan year under which the entity operates,
177	177	file with the board and post on the entity's Internet website
178	178	information that the board determines is necessary to perform the
179	179	board's duties under Section 801.202 unless the information is
180	180	confidential under law.
181	181	Sec. 801.303. REPORT ON INVESTMENT STRATEGY. (a) An
182	182	entity subject to this subchapter shall:
183	183	(1) develop and adopt a written investment strategy;
184	184	(2) file a copy of the strategy with the board not
185	185	later than the 90th day after the date the strategy is adopted; and
186	186	(3) file a copy of each change to the strategy with the
187	187	board not later than the 90th day after the change is adopted.
188	188	(b) A report under this section may be combined with any
189	189	other report required by this chapter or Chapter 802.
190	190	Sec. 801.304. TIMELY SUBMISSION OF CERTAIN REPORTS AND
191	191	RESPONSES REQUIRED. (a) The presiding officer of an entity
192	192	subject to this subchapter or the governing body of an entity
193	193	subject to this subchapter is responsible for ensuring that a
194	194	report or a response to a request for information made by the board
195	195	for the purpose of performing the board's duties under Section
196	196	801.202 is filed timely with the board.
197	197	(b) It is grounds for removal by the appropriate appointing
198	198	officer if the presiding officer of an entity subject to this
199	199	subchapter or the governing body of an entity subject to this
200	200	subchapter consistently fails to timely submit a report or respond
201	201	to a request for information under Subsection (a).
202	202	(c) If the board determines that the presiding officer of an
203	203	entity subject to this subchapter consistently fails to timely
204	204	report or respond to a request for information under Subsection
205	205	(a), the board shall notify the appropriate appointing officer, if
206	206	any, the governor, if the governor is not the appropriate
207	207	appointing officer, and the Legislative Budget Board of its
208	208	determination.
209	209	Sec. 801.305. CONTRACTS WITH INVESTMENT MANAGERS AND
210	210	CERTAIN OTHERS. A contract with an investment manager or other
211	211	person to provide services to an entity subject to this subchapter
212	212	relating to the management and investment of public funds for or on
213	213	behalf of the entity is subject to review by the board regarding the
214	214	fees charged and paid by the subject entity and the services
215	215	rendered to the entity in consideration for the fees.
216	216	Sec. 801.306. DISCLOSURE OF CERTAIN POTENTIAL CONFLICTS OF
217	217	INTEREST; ANNUAL FILING. (a) This section applies to:
218	218	(1) a member of the governing body of a public
219	219	retirement system subject to this subchapter;
220	220	(2) an investment manager for a public retirement
221	221	system appointed by contract;
222	222	(3) a member of the board of regents of The University
223	223	of Texas System;
224	224	(4) the officers and directors of a nonprofit
225	225	corporation under contract with the board of regents of The
226	226	University of Texas System under Section 66.08, Education Code, to
227	227	invest the funds of the permanent university fund on behalf of the
228	228	board of regents;
229	229	(5) a member of the State Board of Education;
230	230	(6) the officers and directors of a nonprofit
231	231	corporation acting under contract with the State Board of Education
232	232	to invest the funds of the permanent school fund under Section
233	233	43.006, Education Code;
234	234	(7) any private professional investment manager who
235	235	has entered into a contract with the comptroller under Section
236	236	404.024(k) to assist the comptroller in investing public funds; and
237	237	(8) any other person, including an investment manager,
238	238	consultant, or advisor, providing services under contract to an
239	239	entity subject to this subchapter relating to the management and
240	240	investment of the entity's assets.
241	241	(b) A person to whom this section applies and who has a
242	242	business, commercial, or other relationship that a reasonable
243	243	person would find likely to materially diminish the person's
244	244	independence of judgment in the performance of the person's
245	245	responsibilities with respect to the management or investment of
246	246	public funds for or on behalf of an entity subject to this
247	247	subchapter shall immediately disclose the relationship in writing
248	248	to the entity.
249	249	(c) If a person described by Subsection (a)(1) or (3)
250	250	intentionally fails to disclose a relationship under Subsection
251	251	(b), it is a ground for removal from the governing body of the
252	252	entity on which the person serves.
253	253	(d) If a person described by Subsection (a)(2), (4), (6),
254	254	(7), or (8) intentionally fails to disclose a relationship under
255	255	Subsection (b):
256	256	(1) the contract is voidable by the entity; and
257	257	(2) the governing body of the entity may enter an order
258	258	declaring the person ineligible to contract for business relating
259	259	to the management or investment of public funds for or on behalf of
260	260	the entity.
261	261	(e) At least annually and not later than a date specified by
262	262	the entity, a person to whom this section applies shall file a
263	263	statement with the entity stating that the person is aware that the
264	264	person is required to disclose material conflicts of interest under
265	265	this section and that the person is in compliance with this section.
266	266	Sec. 801.307. PROHIBITION AGAINST ACCEPTANCE OF CERTAIN
267	267	GIFTS. In any 12-month period, the comptroller or a person who is a
268	268	member of the governing body of a public retirement system, the
269	269	board of regents of The University of Texas System, or the State
270	270	Board of Education or an employee of an entity subject to this
271	271	subchapter employed in a "bona fide executive, administrative, or
272	272	professional capacity," as that phrase is used for purposes of
273	273	establishing an exemption to the overtime provisions of the federal
274	274	Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.),
275	275	may not accept a gift or gifts, the total value of which is more than
276	276	$250, including food, entertainment, and a promised future benefit,
277	277	from another person doing business with or seeking to do business
278	278	with the entity.
279	279	Sec. 801.308. PROHIBITED CONTRACTS. A public retirement
280	280	system, the board of regents of The University of Texas System, or
281	281	the State Board of Education may not directly or indirectly enter
282	282	into a contract with a former member of the governing body of a
283	283	public retirement system, the board of regents of The University of
284	284	Texas System, or the State Board of Education, respectively, to
285	285	provide services relating to the management and investment of
286	286	public funds before the second anniversary of the date the person
287	287	ceases to be a member of the body or board, as applicable.
288	288	Sec. 801.309. CIVIL PENALTY. (a) A person who commits a
289	289	breach of the person's fiduciary duty, fraud, theft, embezzlement,
290	290	fraudulent conversion, unlawful appropriation, or misapplication
291	291	of property in relation to a service provided by the person to an
292	292	entity subject to this subchapter is liable to this state for a
293	293	civil penalty in an amount not to exceed $250,000 for each offense.
294	294	(b) The attorney general may bring an action to recover the
295	295	civil penalty imposed under this section.
296	296	(c) The penalty under this section is in addition to any
297	297	other remedy provided by law.
298	298	Sec. 801.310. INVESTIGATION OF CERTAIN COMPLAINTS;
299	299	ASSISTANCE OF ATTORNEY GENERAL. (a) The board shall adopt rules
300	300	and procedures for receiving and investigating a complaint against
301	301	a person who provides management or investment services to an
302	302	entity subject to this subchapter alleging that the person:
303	303	(1) violated or may have violated Section 801.306 or
304	304	another applicable conflict of interest provision; or
305	305	(2) has been or may have been involved in criminal
306	306	conduct relating to the services provided by the person to the
307	307	entity.
308	308	(b) The board or the attorney general may, without receiving
309	309	a complaint, initiate an investigation under this section if the
310	310	board or the attorney general, as applicable, determines an
311	311	investigation is appropriate.
312	312	(c) The board may enter into a memorandum of understanding
313	313	with the attorney general to assist in an investigation under this
314	314	section. The memorandum must specify the type, scope, and format of
315	315	the investigative assistance provided by the attorney general.
316	316	(d) If the board or the attorney general determines that a
317	317	criminal offense may have been committed, the board or the attorney
318	318	general, as applicable, shall refer the case to the appropriate law
319	319	enforcement agency for prosecution.
320	320	SECTION 16. Subdivision (1), Section 802.001, Government
321	321	Code, is amended to read as follows:
322	322	(1) "Board" means the State Pension and Investment
323	323	Review Board.
324	324	SECTION 17. Subsection (d), Section 802.003, Government
325	325	Code, is amended to read as follows:
326	326	(d) The State Pension and Investment Review Board may file
327	327	an appropriate pleading, in the manner provided by this section for
328	328	filing by an individual, for the purpose of enforcing a requirement
329	329	of Subchapter B or C, other than a requirement of Section
330	330	802.101(a), 802.101(d), 802.102, 802.103(a), or 802.104.
331	331	SECTION 18. Subsection (c), Section 802.101, Government
332	332	Code, is amended to read as follows:
333	333	(c) The governing body of a public retirement system shall
334	334	file with the State Pension and Investment Review Board a copy of
335	335	each actuarial study and each separate report made as required by
336	336	law.
337	337	SECTION 19. Subsection (j), Section 802.1012, Government
338	338	Code, is amended to read as follows:
339	339	(j) The governmental entity shall:
340	340	(1) maintain a copy of the final audit report at its
341	341	main office for public inspection;
342	342	(2) submit a copy of the final audit report to the
343	343	public retirement system and the State Pension and Investment
344	344	Review Board not later than the 30th day after the date the final
345	345	audit report is received by the governmental entity; and
346	346	(3) pay all costs associated with conducting the audit
347	347	and preparing and distributing the report under this section.
348	348	SECTION 20. Subchapter B, Chapter 802, Government Code, is
349	349	amended by adding Section 802.1013 to read as follows:
350	350	Sec. 802.1013. ACTUARIAL EXPERIENCE STUDIES. (a) In this
351	351	section, "plan year" means the 12-month accounting period of the
352	352	affected pension plan of a public retirement system subject to this
353	353	section.
354	354	(b) Subject to Subsection (c), the board may require a
355	355	public retirement system with total assets the book value of which,
356	356	as of the last day of the preceding plan year, is at least $100
357	357	million to conduct an actuarial experience study.
358	358	(c) The board may not require a public retirement system to
359	359	conduct more than one actuarial experience study every five years.
360	360	(d) The board may adopt rules to implement this section.
361	361	SECTION 21. Subsections (b) and (c), Section 802.103,
362	362	Government Code, are amended to read as follows:
363	363	(b) The governing body of a public retirement system shall,
364	364	before the 211th day after the last day of the fiscal year under
365	365	which the system operates, file with the State Pension and
366	366	Investment Review Board a copy of each annual financial report it
367	367	makes as required by law.
368	368	(c) A public retirement system that is subject to Chapter
369	369	125, Acts of the 45th Legislature, Regular Session, 1937 (Article
370	370	6243e, Vernon's Texas Civil Statutes), and that has total assets
371	371	with a book value, as of the last day of the fiscal year, of less
372	372	than $50,000, may submit to the State Pension and Investment Review
373	373	Board for that year, instead of the financial report otherwise
374	374	required by this section to be published and submitted, a copy of
375	375	the financial report it submits to the firemen's pension
376	376	commissioner.
377	377	SECTION 22. Subsection (a), Section 802.105, Government
378	378	Code, is amended to read as follows:
379	379	(a) Each public retirement system shall, before the 91st day
380	380	after the date of its creation, register with the State Pension and
381	381	Investment Review Board.
382	382	SECTION 23. Subsection (h), Section 802.106, Government
383	383	Code, is amended to read as follows:
384	384	(h) A public retirement system shall submit to the State
385	385	Pension and Investment Review Board copies of the summarized
386	386	information required by Subsections (a) and (b). A system shall
387	387	submit a copy of the information required by Subsection (a) before
388	388	the 31st day after the date of publication and a copy of the
389	389	information required by Subsection (b) before the 271st day after
390	390	the date a change is adopted.
391	391	SECTION 24. Section 802.107, Government Code, is amended to
392	392	read as follows:
393	393	Sec. 802.107. GENERAL PROVISIONS RELATING TO REPORTS.
394	394	(a) A public retirement system shall maintain for public review at
395	395	its main office and at such other locations as the retirement system
396	396	considers appropriate copies of the most recent edition of each
397	397	type of report or other information required by this chapter to be
398	398	submitted to the State Pension and Investment Review Board unless
399	399	the information is confidential under law. Public information
400	400	required to be reported annually to the board may be posted on the
401	401	retirement system's Internet website or on the website of the
402	402	board.
403	403	(b) Information required by this chapter to be submitted to
404	404	the State Pension and Investment Review Board may be contained in
405	405	one or more documents but must be submitted within the period
406	406	provided by the provision requiring the information.
407	407	SECTION 25. Subsection (d), Section 802.202, Government
408	408	Code, is amended to read as follows:
409	409	(d) The governing body of a public retirement system shall:
410	410	(1) develop and adopt a written investment policy;
411	411	(2) maintain for public review at its main office a
412	412	copy of the policy;
413	413	(3) file a copy of the policy with the State Pension
414	414	and Investment Review Board not later than the 90th day after the
415	415	date the policy is adopted; and
416	416	(4) file a copy of each change to the policy with the
417	417	State Pension and Investment Review Board not later than the 90th
418	418	day after the change is adopted.
419	419	SECTION 26. The heading to Section 802.3021, Government
420	420	Code, is amended to read as follows:
421	421	Sec. 802.3021. STATE PENSION AND INVESTMENT REVIEW BOARD
422	422	ACTUARY.
423	423	SECTION 27. Subsection (f), Section 810.001, Government
424	424	Code, is amended to read as follows:
425	425	(f) Every political entity which establishes or maintains a
426	426	public retirement system covered under this Act shall file all
427	427	reports with the State Pension and Investment Review Board required
428	428	by Chapter 802. If a political subdivision establishes a
429	429	retirement program that would be a "public retirement system"
430	430	within the meaning ascribed to that term by Section 801.001, but for
431	431	the fact that the program is administered by a life insurance
432	432	company, the subdivision shall notify the State Pension and
433	433	Investment Review Board of the establishment of the program and the
434	434	name of the administering company.
435	435	SECTION 28. Subsection (d), Section 815.110, Government
436	436	Code, is amended to read as follows:
437	437	(d) No later than 30 days after the legislative audit
438	438	committee receives an audit report, the committee shall file a copy
439	439	of the report with the retirement system, the governor, the
440	440	lieutenant governor, the speaker of the house of representatives,
441	441	the State Pension and Investment Review Board, the state auditor,
442	442	and the secretary of state for publication in the Texas Register.
443	443	SECTION 29. Subsection (a), Section 815.510, Government
444	444	Code, is amended to read as follows:
445	445	(a) The Employees Retirement System of Texas shall submit a
446	446	report not later than the 25th day of the month following the end of
447	447	each fiscal year to the governor, the lieutenant governor, the
448	448	speaker of the house of representatives, the executive director of
449	449	the State Pension and Investment Review Board, the appropriate
450	450	oversight committees of the house and senate, and the Legislative
451	451	Budget Board. The report shall include the following:
452	452	(1) the current end-of-fiscal-year market value of the
453	453	trust fund;
454	454	(2) the asset allocations of the trust fund expressed
455	455	in percentages of stocks, fixed income, cash, or other financial
456	456	investments; and
457	457	(3) the investment performance of the trust fund
458	458	utilizing accepted industry measurement standards.
459	459	SECTION 30. Subsections (c) and (d), Section 825.108,
460	460	Government Code, are amended to read as follows:
461	461	(c) A copy of the report required by Subsection (a) must be
462	462	filed with the governor, the lieutenant governor, the speaker of
463	463	the house of representatives, the State Pension and Investment
464	464	Review Board, the legislative audit committee, and the state
465	465	auditor no later than December 15 of each year.
466	466	(d) A copy of the report required by Subsection (b) must be
467	467	filed with the governor, the lieutenant governor, the speaker of
468	468	the house of representatives, the State Pension and Investment
469	469	Review Board, the legislative audit committee, and the state
470	470	auditor no later than March 1 of each year.
471	471	SECTION 31. Subsection (d), Section 825.111, Government
472	472	Code, is amended to read as follows:
473	473	(d) No later than 30 days after the legislative audit
474	474	committee receives an audit report, the committee shall file a copy
475	475	of the report with the retirement system, the governor, the
476	476	lieutenant governor, the speaker of the house of representatives,
477	477	the State Pension and Investment Review Board, the state auditor,
478	478	and the secretary of state for publication in the Texas Register.
479	479	SECTION 32. Subsection (e), Section 825.512, Government
480	480	Code, is amended to read as follows:
481	481	(e) The retirement system shall submit an annual investment
482	482	performance report not later than the 45th day after the end of each
483	483	fiscal year to the governor, the lieutenant governor, the speaker
484	484	of the house of representatives, the executive director of the
485	485	State Pension and Investment Review Board, the legislative audit
486	486	committee, the committees of the senate and the house of
487	487	representatives having jurisdiction over appropriations, the
488	488	committees of the senate and the house of representatives having
489	489	principal jurisdiction over legislation governing the retirement
490	490	system, and the Legislative Budget Board. The report shall include
491	491	a listing of all commissions and fees paid by the system during the
492	492	reporting period for the sale, purchase, or management of system
493	493	assets.
494	494	SECTION 33. Section 825.513, Government Code, is amended to
495	495	read as follows:
496	496	Sec. 825.513. INFORMATION FOR PUBLICATION. The retirement
497	497	system shall verify with the State Pension and Investment Review
498	498	Board the accuracy of information about the effects of proposed
499	499	legislation on benefits and the trust fund before including the
500	500	information in an official publication of the retirement system.
501	501	SECTION 34. Section 825.518, Government Code, is amended to
502	502	read as follows:
503	503	Sec. 825.518. ANNUAL REPORT. The Teacher Retirement System
504	504	of Texas shall submit a statistical analysis based on information
505	505	compiled under Section 822.005(d) not later than the 25th day of the
506	506	month following the end of each fiscal year to the governor, the
507	507	lieutenant governor, the speaker of the house of representatives,
508	508	the executive director of the State Pension and Investment Review
509	509	Board, the appropriate oversight committees of the house and
510	510	senate, and the Legislative Budget Board.
511	511	SECTION 35. Section 2, Chapter 817 (S.B. 127), Acts of the
512	512	73rd Legislature, Regular Session, 1993 (Article 4413(34e),
513	513	Vernon's Texas Civil Statutes), is amended to read as follows:
514	514	Sec. 2. The manager of each state trust fund shall submit to
515	515	the governor, the lieutenant governor, the speaker of the house of
516	516	representatives, and the executive director of the State Pension
517	517	and Investment Review Board:
518	518	(1) not later than January 25 of each year, a report
519	519	with the information required by Section 3 of this Act covering the
520	520	last six months of the previous calendar year; and
521	521	(2) not later than June 25 of each year, a report with
522	522	the information required by Section 3 of this Act covering the first
523	523	six months of that calendar year.
524	524	SECTION 36. Subsection (d), Section 12.03, Chapter 183
525	525	(S.B. 598), Acts of the 64th Legislature, Regular Session, 1975
526	526	(Article 6243e.1, Vernon's Texas Civil Statutes), is amended to
527	527	read as follows:
528	528	(d) The board of trustees shall file with the State Pension
529	529	and Investment Review Board a copy of each actuarial study and each
530	530	separate report made as required by law.
531	531	SECTION 37. Section 10, Article 6243e.2(1), Revised
532	532	Statutes, is amended to read as follows:
533	533	Sec. 10. NONSTATUTORY BENEFIT INCREASES. The benefits
534	534	provided by this article may be increased if:
535	535	(1) an actuary selected by the board who, if an
536	536	individual, is a Fellow of the Society of Actuaries, a Fellow of the
537	537	Conference of Actuaries in Public Practice, or a member of the
538	538	American Academy of Actuaries determines that the increase cannot
539	539	reasonably be viewed as posing a material risk of jeopardizing the
540	540	fund's ability to pay any existing benefit;
541	541	(2) a majority of the participating members of the
542	542	fund vote for the increase by a secret ballot;
543	543	(3) the increase does not deprive a member, without
544	544	the member's written consent, of a right to receive benefits that
545	545	have already become fully vested and matured in a member; and
546	546	(4) the State Pension and Investment Review Board
547	547	approves the determination by the actuary selected by the board
548	548	that the increase cannot reasonably be viewed as posing a material
549	549	risk of jeopardizing the fund's ability to pay any existing
550	550	benefit.
551	551	SECTION 38. Subsections (a), (b), (c), (d), and (f),
552	552	Section 801.113, Government Code, are repealed.
553	553	SECTION 39. (a) The name of the State Pension Review Board
554	554	is changed to the State Pension and Investment Review Board. A
555	555	reference in law to the State Pension Review Board means the State
556	556	Pension and Investment Review Board. A reference in law to the
557	557	State Pension Review Board fund means the State Pension and
558	558	Investment Review Board fund.
559	559	(b) An appropriation for the use and benefit of the State
560	560	Pension Review Board is available for the use and benefit of the
561	561	State Pension and Investment Review Board.
562	562	SECTION 40. (a) As soon as practicable on or after the
563	563	effective date of this Act:
564	564	(1) the governor shall appoint five members to the
565	565	State Pension and Investment Review Board as provided by Section
566	566	801.103, Government Code, as amended by this Act, as follows:
567	567	(A) two members for a term expiring January 31,
568	568	2011;
569	569	(B) two members for a term expiring January 31,
570	570	2013; and
571	571	(C) one member for a term expiring January 31,
572	572	2015;
573	573	(2) the lieutenant governor shall appoint one member
574	574	to the State Pension and Investment Review Board as provided by
575	575	Subsection (a), Section 801.104, Government Code, as amended by
576	576	this Act, for a term expiring January 31, 2013; and
577	577	(3) the speaker of the house of representatives shall
578	578	appoint one member to the State Pension and Investment Review Board
579	579	as provided by Subsection (b), Section 801.104, Government Code, as
580	580	amended by this Act, for a term expiring January 31, 2015.
581	581	(b) The term of a member of the State Pension Review Board
582	582	serving immediately before the effective date of this Act expires
583	583	at the time five or more of the members appointed to the State
584	584	Pension and Investment Review Board under Subsection (a) of this
585	585	section qualify for office. Until the expiration of a member's term
586	586	occurs under this subsection, the member has the same powers and
587	587	duties that the member had immediately before that date.
588	588	SECTION 41. Subchapter D, Chapter 801, Government Code, as
589	589	added by this Act, applies to the oversight of funds by the State
590	590	Pension and Investment Review Board, regardless of whether the
591	591	investment of those funds was made before, on, or after the
592	592	effective date of this Act.
593	593	SECTION 42. This Act does not make an appropriation. A
594	594	provision in this Act that creates a new governmental program,
595	595	creates a new entitlement, or imposes a new duty on a governmental
596	596	entity is not mandatory during a fiscal period for which the
597	597	legislature has not made a specific appropriation to implement the
598	598	provision.
599	599	SECTION 43. This Act takes effect September 1, 2009.