By: Duncan S.B. No. 1664
(In the Senate - Filed March 11, 2011; March 23, 2011, read
first time and referred to Committee on State Affairs;
April 29, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 1; April 29, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1664 By: Duncan
A BILL TO BE ENTITLED
AN ACT
relating to the powers and duties of and contributions to and
benefits from the systems and programs administered by the
Employees Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 609, Government Code, is
amended by adding Section 609.015 to read as follows:
Sec. 609.015. BENEFICIARY CAUSING DEATH OF PARTICIPATING
EMPLOYEE. (a) Any benefits, funds, or account balances payable on
the death of a participating employee may not be paid to a person
convicted of or adjudicated as having caused that death but instead
are payable as if the convicted person had predeceased the
decedent.
(b) The plan is not required to change the recipient of any
benefits, funds, or account balances under this section unless it
receives actual notice of the conviction or adjudication of a
beneficiary. However, the plan may delay payment of any benefits,
funds, or account balances payable on the death of a participating
employee pending the results of a criminal investigation or civil
proceeding and other legal proceedings relating to the cause of
death.
(c) For the purposes of this section, a person has been
convicted of or adjudicated as having caused the death of a
participating employee if the person:
(1) pleads guilty or nolo contendere to, or is found
guilty by a court or jury in a criminal proceeding of, causing the
death of the participating employee, regardless of whether sentence
is imposed or probated, and no appeal of the conviction is pending
and the time provided for appeal has expired; or
(2) is found liable by a court or jury in a civil
proceeding for causing the death of the participating employee and
no appeal of the judgement is pending and the time provided for
appeal has expired.
SECTION 2. Section 813.404, Government Code, is amended to
read as follows:
Sec. 813.404. CONTRIBUTIONS FOR SERVICE NOT PREVIOUSLY
ESTABLISHED. For each month of membership, military, or equivalent
membership service not previously credited in the retirement
system, a member claiming credit in the elected class shall pay a
contribution in an amount equal to the greater of:
(1) eight percent of the monthly salary paid to
members of the legislature at the time the credit is established; or
(2) the appropriate member contribution provided by
Section 815.402 for [six percent of the monthly state salary paid
to] a person who holds, at the time the credit is established, the
office for which credit is sought.
SECTION 3. Subsection (a), Section 813.505, Government
Code, is amended to read as follows:
(a) A member claiming credit in the employee class for
membership service not previously established shall, for each month
of the service, pay a contribution in an amount equal to the greater
of:
(1) the appropriate member contribution provided by
Section 815.402 [six percent of the member's monthly state
compensation] for the service during the time for which credit is
sought; or
(2) $18.
SECTION 4. Subsections (a), (c), (d), and (e), Section
814.007, Government Code, are amended to read as follows:
(a) Any benefits, funds, or account balances [A benefit]
payable on the death of a member or annuitant may not be paid to a
person convicted of or adjudicated as having caused [causing] that
death but instead are [is] payable as if the convicted person had
predeceased the decedent.
(c) The retirement system shall reduce any annuity computed
in part on the age of the convicted or adjudicated person to a lump
sum equal to the present value of the remainder of the annuity. The
reduced amount is payable to a person entitled as provided by this
section to receive the benefit.
(d) The retirement system is not required to change the
recipient of any benefits, funds, or account balances under this
section unless it receives actual notice of the conviction or
adjudication of a beneficiary. However, the retirement system may
delay payment of any benefits, funds, or account balances [a
benefit] payable on the death of a member or annuitant pending the
results of a criminal investigation or civil proceeding and other
[of] legal proceedings relating to the cause of death.
(e) For the purposes of this section, a person has been
convicted of or adjudicated as having caused [causing] the death of
a member or annuitant if the person:
(1) pleads guilty or nolo contendere to, or is found
guilty by a court or jury in a criminal proceeding of, causing the
death of the member or annuitant, regardless of whether sentence is
imposed or probated,[;] and
[(2) has] no appeal of the conviction is pending and
the time provided for appeal has expired; or
(2) is found liable by a court or jury in a civil
proceeding for causing the death of the member or annuitant and no
appeal of the judgment is pending and the time provided for appeal
has expired.
SECTION 5. Subsection (d), Section 814.104, Government
Code, is amended to read as follows:
(d) Except as provided by Section 814.102 or by rule adopted
under Section 813.304(d) or 803.202(a)(2), a member who was not a
member on the date hired, was hired on or after September 1, 2009,
and has service credit in the retirement system is eligible to
retire and receive a service retirement annuity if the member:
(1) is at least 65 years old and has at least 10 years
of service credit in the employee class; or
(2) has at least 10 [5] years of service credit in the
employee class and the sum of the member's age and amount of service
credit in the employee class, including months of age and credit,
equals or exceeds the number 80.
SECTION 6. Subsection (d), Section 814.1075, Government
Code, is amended to read as follows:
(d) The standard combined service retirement annuity that
is payable under this section is based on retirement at either the
age of 55 or the age at which the sum of the member's age and amount
of service credit in the employee class equals or exceeds the number
80. The annuity of a law enforcement or custodial officer who
retires before reaching the age of 55 under any eligibility
criteria is actuarially reduced by five percent for each year the
member retires before the member reaches age 55, with a maximum
possible reduction of 25 percent. The actuarial reduction
described by this section is in addition to any other actuarial
reduction required by law.
SECTION 7. Section 815.303, Government Code, is amended to
read as follows:
Sec. 815.303. SECURITIES LENDING. (a) The retirement
system may, in the exercise of its constitutional discretion to
manage the assets of the retirement system, select one or more
commercial banks, depository trust companies, or other entities to
serve as custodian or custodians of the system's securities and to
lend the securities under rules or policies adopted by the board of
trustees and as required by this section.
(b) To be eligible to lend securities under this section, a
bank or brokerage firm must:
(1) be experienced in the operation of a fully secured
securities loan program;
(2) maintain adequate capital in the prudent judgment
of the retirement system to assure the safety of the securities;
(3) execute an indemnification agreement satisfactory
in form and content to the retirement system fully indemnifying the
retirement system against loss resulting from borrower default in
its operation of a securities loan program for the system's
securities; and
(4) require any securities broker or dealer to whom it
lends securities belonging to the retirement system to deliver to
and maintain with the custodian or securities lending agent
collateral in the form of cash or [United States government]
securities that are obligations of the United States or agencies or
instrumentalities of the United States in an amount equal to but not
less than 100 percent of the market value, from time to time, as
determined by the retirement system, of the loaned securities.
SECTION 8. Section 815.402, Government Code, is amended by
adding Subsections (a-1) and (h-1) to read as follows:
(a-1) Notwithstanding Subsection (a)(1), if the state
contribution to the retirement system is computed using a
percentage less than 6.5 percent for the state fiscal year
beginning September 1, 2011, the member's contribution is not
required to be computed using a percentage equal to the percentage
used to compute the state contribution for that biennium. This
subsection expires September 1, 2012.
(h-1) Notwithstanding Subsection (h), if the state
contribution to the law enforcement and custodial officer
supplemental retirement fund is computed using a percentage less
than 0.5 percent for the state fiscal year beginning September 1,
2011, the member's contribution is not required to be computed
using a percentage equal to the percentage used to compute the state
contribution for that biennium. This subsection expires September
1, 2012.
SECTION 9. Subchapter D, Chapter 834, Government Code, is
amended by adding Section 834.305 to read as follows:
Sec. 834.305. BENEFICIARY CAUSING DEATH OF MEMBER OR
ANNUITANT. (a) Any benefits, funds, or account balances payable
on the death of a member or annuitant may not be paid to a person
convicted of or adjudicated as having caused that death but instead
are payable as if the convicted person had predeceased the
decedent.
(b) A person who becomes eligible under this section to
select death or survivor benefits may select benefits as if the
person were the designated beneficiary.
(c) The retirement system shall reduce any annuity computed
in part on the age of the convicted or adjudicated person to a lump
sum equal to the present value of the remainder of the annuity. The
reduced amount is payable to a person entitled as provided by this
section to receive the benefit.
(d) The retirement system is not required to change the
recipient of any benefits, funds, or account balances under this
section unless it receives actual notice of the conviction or
adjudication of a beneficiary. However, the retirement system may
delay payment of any benefits, funds, or account balances payable
on the death of a member or annuitant pending the results of a
criminal investigation or civil proceeding and other legal
proceedings relating to the cause of death.
(e) For the purposes of this section, a person has been
convicted of or adjudicated as having caused the death of a member
or annuitant if the person:
(1) pleads guilty or nolo contendere to, or is found
guilty by a court or jury in a criminal proceeding of, causing the
death of the member or annuitant, regardless of whether sentence is
imposed or probated, and no appeal of the conviction is pending and
the time provided for appeal has expired; or
(2) is found liable by a court or jury in a civil
proceeding for causing the death of the member or annuitant and no
appeal of the judgment is pending and the time provided for appeal
has expired.
SECTION 10. Subchapter D, Chapter 839, Government Code, is
amended by adding section 839.306 to read as follows:
Sec. 839.306. BENEFICIARY CAUSING DEATH OF MEMBER OR
ANNUITANT. (a) Any benefits, funds, or account balances payable
on the death of a member or annuitant may not be paid to a person
convicted of or adjudicated as having caused that death but instead
are payable as if the convicted person had predeceased the
decedent.
(b) A person who becomes eligible under this section to
select death or survivor benefits may select benefits as if the
person were the designated beneficiary.
(c) The retirement system shall reduce any annuity computed
in part on the age of the convicted or adjudicated person to a lump
sum equal to the present value of the remainder of the annuity. The
reduced amount is payable to a person entitled as provided by this
section to receive the benefit.
(d) The retirement system is not required to change the
recipient of any benefits, funds, or account balances under this
section unless it receives actual notice of the conviction or
adjudication of a beneficiary. However, the retirement system may
delay payment of any benefits, funds, or account balances payable
on the death of a member or annuitant pending the results of a
criminal investigation or civil proceeding and other legal
proceedings relating to the cause of death.
(e) For the purposes of this section, a person has been
convicted of or adjudicated as having caused the death of a member
or annuitant if the person:
(1) pleads guilty or nolo contendere to, or is found
guilty by a court or jury in a criminal proceeding of, causing the
death of the member or annuitant, regardless of whether sentence is
imposed or probated, and no appeal of the conviction is pending and
the time provided for appeal has expired; or
(2) is found liable by a court or jury in a civil
proceeding for causing the death of the member or annuitant and no
appeal of the judgment is pending and the time provided for appeal
has expired.
SECTION 11. Subsection (a), Section 1551.004, Insurance
Code, is amended to read as follows:
(a) In this chapter, "dependent" with respect to an
individual eligible to participate in the group benefits program
[under Section 1551.101 or 1551.102] means the individual's:
(1) spouse;
(2) unmarried child younger than 26 [25] years of age;
(3) child of any age who the board of trustees
determines lives with or has the child's care provided by the
individual on a regular basis if:
(A) the child is mentally [retarded] or
physically incapacitated to the extent that the child is dependent
on the individual for care or support, as determined by the board of
trustees;
(B) the child's coverage under this chapter has
not lapsed; and
(C) the child is at least 26 [25] years old and
was enrolled as a participant in the health benefits coverage under
the group benefits program on the date of the child's 26th [25th]
birthday;
(4) child of any age who is unmarried, for purposes of
health benefit coverage under this chapter, on expiration of the
child's continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (Pub. L. No. 99-272) and its
subsequent amendments; and
(5) ward, as that term is defined by Section 601, Texas
Probate Code, who is 26 years of age or younger.
SECTION 12. Subchapter B, Chapter 1551, Insurance Code, is
amended by adding Section 1551.068 to read as follows:
Sec. 1551.068. QUALIFICATION OF GROUP BENEFITS PROGRAM.
Notwithstanding any provision of this chapter or any other law, it
is intended that the provisions of this chapter be construed and
administered in a manner that coverages under the group benefits
program will be considered in compliance with applicable federal
law. The board of trustees may adopt rules that modify the coverage
provided under the program by adding, deleting, or changing a
provision of the program, including rules that modify eligibility
and enrollment requirements and the benefits available under the
program.
SECTION 13. Section 1551.220, Insurance Code, is amended to
read as follows:
Sec. 1551.220. BENEFICIARY CAUSING DEATH OF PARTICIPANT OR
BENEFICIARY OF PARTICIPANT. (a) Any benefits, funds, or account
balances [A benefit] payable on the death of a participant or the
beneficiary of a participant in the group benefits program may not
be paid to a person convicted of or adjudicated as having caused
[causing] that death but instead are [is] payable as if the
convicted person had predeceased the decedent.
(b) The Employees Retirement System of Texas is not required
to change the recipient of any benefits, funds, or account balances
under this section unless it receives actual notice of the
conviction or adjudication of a beneficiary. However, the
retirement system may delay payment of any benefits, funds, or
account balances [a benefit] payable on the death of a participant
or beneficiary of a participant pending the results of a criminal
investigation or civil proceeding and other [of] legal proceedings
relating to the cause of death.
(c) For the purposes of this section, a person has been
convicted of or adjudicated as having caused [causing] the death of
a participant or beneficiary of a participant if the person:
(1) pleads guilty or nolo contendere to, or is found
guilty by a court or jury in a criminal proceeding of, causing the
death of the participant or beneficiary of a participant,
regardless of whether sentence is imposed or probated,[;] and
[(2) has] no appeal of the conviction is pending and
the time provided for appeal has expired; or
(2) is found liable by a court or jury in a civil proceeding
for causing the death of the member or annuitant and no appeal of
the judgment is pending and the time provided for appeal has
expired.
SECTION 14. Subchapter E, Chapter 1551, Insurance Code, is
amended by adding Section 1551.226 to read as follows:
Sec. 1551.226. TOBACCO CESSATION COVERAGE. (a) The board
of trustees shall develop a plan for providing under any health
benefit plan provided under the group benefits program tobacco
cessation coverage for participants.
(b) The plan developed under Subsection (a) must include
coverage for prescription drugs that aid participants in ceasing
the use of tobacco products.
SECTION 15. Subchapter G, Chapter 1551, Insurance Code, is
amended by adding Section 1551.3075 to read as follows:
Sec. 1551.3075. TOBACCO USER PREMIUM DIFFERENTIAL.
(a) The board of trustees shall assess each participant in a
health benefit plan provided under the group benefits program who
uses one or more tobacco products a tobacco user premium
differential, to be paid in monthly installments. Except as
provided by Subsection (b), the board of trustees shall determine
the amount of the monthly installments of the premium differential.
(b) If the General Appropriations Act for a state fiscal
biennium sets the amount of the monthly installments of the tobacco
user premium differential for that biennium, the board of trustees
shall assess the premium differential during that biennium in the
amount prescribed by the General Appropriations Act.
SECTION 16. Subchapter G, Chapter 1551, Insurance Code, is
amended by adding Section 1551.3076 to read as follows:
Sec. 1551.3076. EMPLOYER ENROLLMENT FEE. (a) The board of
trustees shall assess each employer whose employees participate in
the group benefits program an employer enrollment fee in an amount
not to exceed a percentage of the employer's total payroll, as
determined by the General Appropriations Act.
(b) The board of trustees shall deposit the enrollment fees
to the credit of the employees life, accident, and health insurance
and benefits fund to be used for the purposes specified by Section
1551.401.
SECTION 17. Section 1551.314, Insurance Code, is amended to
read as follows:
Sec. 1551.314. CERTAIN STATE CONTRIBUTIONS PROHIBITED. A
state contribution may not be:
(1) made for coverages under this chapter selected by
an individual who receives a state contribution[, other than as a
spouse, dependent, or beneficiary,] for coverages under a group
benefits program provided by another state health plan or by an
institution of higher education, as defined by Section 61.003,
Education Code; or
(2) made for or used to pay a tobacco user premium
differential assessed under Section 1551.3075.
SECTION 18. The change in law made by Sections 609.015,
834.305, and 839.306, Government Code, as added by this Act, and
Sections 814.007, Government Code, and 1551.220, Insurance Code, as
amended by this Act, applies only to an offense committed on or
after the effective date of this Act. An offense committed before
the effective date of this Act is governed by the law in effect on
the date the offense was committed, and the former law is continued
in effect for that purpose. For purposes of this section, an
offense was committed before the effective date of this Act if any
element of the offense occurred before that date.
SECTION 19. (a) Subsection (d), Section 814.104,
Government Code, as amended by this Act, applies only to a member of
the Employees Retirement System of Texas who retires on or after the
effective date of this Act.
(b) A member of the Employees Retirement System of Texas who
retires before the effective date of this Act is governed by the law
as it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 20. The board of trustees of the Employees
Retirement System of Texas shall develop and fully implement the
plan for providing tobacco cessation coverage as required by
Section 1551.226, Insurance Code, as added by this Act, and
implement the tobacco user premium differential required under
Section 1551.3075, Insurance Code, as added by this Act, not later
than January 1, 2012.
SECTION 21. This Act takes effect September 1, 2011.
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