By: Callegari, Murphy (Senate Sponsor - Duncan) H.B. No. 3357
(In the Senate - Received from the House May 6, 2013;
May 7, 2013, read first time and referred to Committee on State
Affairs; May 17, 2013, reported favorably, as amended, by the
following vote: Yeas 9, Nays 0; May 17, 2013, sent to printer.)
COMMITTEE AMENDMENT NO. 1 By: Duncan
Amend H.B. 3357 as follows:
(1) Strike SECTION 6 of the bill, adding Section 825.103(h),
Government Code (page 3, lines 63-67).
(2) In SECTION 9 of the bill (page 5, lines 4-10), strike
amended Section 825.212(c), Government Code, and substitute the
following:
(c) This chapter modifies the common law of conflict of
interests as applied to trustees, employees, and contracts of the
retirement system to the extent that violations of the common law of
conflict of interests do not void retirement system contracts. The
retirement system shall by rule or policy adopt procedures for
disclosing and curing violations of the common law of conflict of
interests and any such rule or policy may specify time periods in
which disclosures and cures must be completed [An employee who has a
business or commercial relationship that could reasonably be
expected to diminish the employee's independence of judgment in the
performance of the employee's responsibilities to the retirement
system shall disclose that relationship in writing to a person
designated by the board].
(3) Strike SECTION 22 of the bill, repealing certain
provisions of the Government Code, and substitute the following
appropriately numbered SECTION:
SECTION 22. The following laws are repealed:
(1) Section 825.211, Government Code;
(2) Sections 825.212(d), (e), (f), (g), and (h),
Government Code;
(3) sections 825.402(b), (c), and (d), Government
Code;
(4) Section 825.404(d), Government Code;
(5) Section 825.411, Government Code; and
(6) Section 1579.103, Insurance Code.
(4) Strike SECTION 23 of the bill, providing an effective
date for the Act, and substitute the following appropriately
numbered SECTION:
SECTION 23. EFFECTIVE DATE. (a) Except as provided by
Subsection (b) of this section, this Act takes effect immediately
if it receives a vote of two-thirds of all the members elected to
each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2013.
(b) Sections 824.1012 and 824.1013, Government Code, as
amended by this Act, take effect September 1, 2013.
(5) Renumber SECTIONS of the bill appropriately.
COMMITTEE AMENDMENT NO. 2 By: Duncan
Amend H.B. No. 3357 (engrossed version) by inserting the
following new SECTIONS, appropriately numbered, and renumbering
the subsequent SECTIONS of the bill accordingly:
SECTION ____. Section 12.055, Education Code, is amended to
read as follows:
Sec. 12.055. APPLICABILITY OF LAWS AND RULES TO CAMPUS OR
PROGRAM GRANTED CHARTER. (a) A campus or program for which a
charter is granted under this subchapter is subject to federal and
state laws and rules governing public schools, except that the
campus or program is subject to this code and rules adopted under
this code only to the extent the applicability to a campus or
program for which a charter is granted under this subchapter of a
provision of this code or a rule adopted under this code is
specifically provided.
(b) A school district may contract with another district or
an open-enrollment charter holder for services at a campus charter.
An employee of the district or open-enrollment charter holder
providing contracted services to a campus charter is eligible for
membership in and benefits from the Teacher Retirement System of
Texas if the employee would be eligible for membership and benefits
if holding the same position at the employing district or
open-enrollment charter school operated by the charter holder.
SECTION ____. Section 12.057, Education Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) An employee of a charter holder, as defined by Section
12.1012, who is employed on a campus or in a program granted a
charter under this subchapter and who qualifies for membership in
the Teacher Retirement System of Texas shall be covered under the
system in the same manner and to the same extent as a qualified
employee of an independent school district who is employed on a
regularly operating campus or in a regularly operating program.
A BILL TO BE ENTITLED
AN ACT
relating to the administration of and benefits payable by the
Teacher Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 551.130(e) and (j), Government Code,
are amended to read as follows:
(e) The location where a quorum is physically present must
be open to the public during the open portions of a telephone
conference call meeting. The open portions of the meeting must be
audible to the public at the location where the quorum is present
and be recorded [tape-recorded] at that location. The [tape]
recording shall be made available to the public.
(j) A person who is not a member of the board may [not] speak
at the meeting from a remote location by telephone conference
call[, except as provided by Section 551.129].
SECTION 2. The heading to Section 824.1012, Government
Code, is amended to read as follows:
Sec. 824.1012. POST-RETIREMENT CHANGE IN RETIREMENT
PAYMENT PLAN [REVOCATION OF BENEFICIARY DESIGNATION] FOR CERTAIN
RETIREMENT BENEFIT OPTIONS.
SECTION 3. Sections 824.1012(a) and (b), Government Code,
are amended to read as follows:
(a) As an exception to Section 824.101(c), a retiree who
selected an optional service retirement annuity under Section
824.204(c)(1), (c)(2), or (c)(5) or an optional disability
retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
and who has received at least one payment under the plan selected
may change the optional annuity selection made by the retiree to a
standard service or disability retirement annuity as provided for
in this section. If the beneficiary is the spouse or former spouse
of the retiree, the beneficiary must sign a notarized consent to the
change, or [may revoke the designation of the beneficiary to
receive the annuity on the death of the retiree, if] a court in a
divorce proceeding involving the retiree and beneficiary must
approve or order the change [approves or orders the revocation] in
the divorce decree or acceptance of a property settlement [or if the
beneficiary is the spouse, a former spouse, or an adult child of the
retiree and signs a notarized consent to the revocation]. The
change in plan selection [revocation] takes effect when the
retirement system receives it.
(b) A change [revocation] described by Subsection (a)
cancels the optional annuity selection made by the retiree,
effective with the beginning of payments of the annuity as
recomputed under this subsection. The retiree is entitled to
receive payments of a standard service or disability retirement
annuity, as applicable, reduced for early retirement, if
applicable, beginning with the payment for the month after the
month in which the retirement system receives the notice of change
[revocation] and ending on the death of the retiree. The change
also cancels the designation of beneficiary with respect to the
optional annuity benefit but does not cancel a designation with
respect to any other benefit payable by the retirement system on the
death of the retiree.
SECTION 4. Section 824.1013(b), Government Code, is amended
to read as follows:
(b) If the beneficiary designated at the time of the
retiree's retirement is the spouse [or former spouse] of the
retiree at the time of the designation:
(1) the spouse [or former spouse] must give written,
notarized consent to the change; [or]
(2) if the parties divorce after the designation, the
former spouse who was designated beneficiary must give written,
notarized consent to the change; or
(3) a court with jurisdiction over the marriage must
have ordered the change.
SECTION 5. Sections 825.002(c), (e), and (e-1), Government
Code, are amended to read as follows:
(c) The governor shall appoint two members of the board from
a slate of three members of the retirement system who are currently
employed by a public school district, charter school, or regional
education service center and who have been nominated in accordance
with Subsection (f) by the members of the retirement system whose
most recent credited service was performed for a public school
district, charter school, or regional education service center.
The two members hold office for staggered terms.
(e) The governor shall appoint one member of the board from
a slate of three persons who have been nominated in accordance with
Subsection (f) by the following groups collectively:
(1) members of the retirement system whose most recent
credited service was performed for an institution of higher
education;
(2) members of the retirement system whose most recent
credited service was performed for a public school district,
charter school, or regional education service center; and
(3) persons who have retired and are receiving
benefits from the retirement system.
(e-1) A person may be nominated for appointment to the board
under Subsection (e) if the person is:
(1) a member of the retirement system who is currently
employed by an institution of higher education;
(2) a member of the retirement system who is currently
employed by a public school district, charter school, or regional
education service center; or
(3) a former member of the retirement system who has
retired and is receiving benefits from the system.
SECTION 6. Section 825.103, Government Code, is amended by
adding Subsection (h) to read as follows:
(h) The board of trustees may accept on behalf of the
retirement system gifts of money, services, or other property from
any public or private source.
SECTION 7. Section 825.115, Government Code, is amended by
adding Subsections (d) and (e) to read as follows:
(d) The board of trustees or its audit committee may conduct
a closed meeting in accordance with Subchapter E, Chapter 551, with
the retirement system's internal or external auditors to discuss:
(1) governance, risk management or internal control
weaknesses, known or suspected compliance violations or fraud,
status of regulatory reviews or investigations, or identification
of potential fraud risk areas and audits for the annual internal
audit plan; or
(2) the auditors' ability to perform duties in
accordance with the Internal Audit Charter, relevant auditing
standards, and Chapter 2102.
(e) The board of trustees may conduct a closed meeting in
accordance with Subchapter E, Chapter 551, to deliberate or confer
with one or more employees, consultants, or legal counsel of the
retirement system or a third party regarding a procurement to be
awarded by the board of trustees if, before conducting the closed
meeting, a majority of the trustees in an open meeting vote that
deliberating or conferring in an open meeting would have a
detrimental effect on the position of the retirement system in
negotiations with a third person. The board of trustees is required
to vote or take final action on the procurement in an open meeting.
SECTION 8. Section 825.204, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) The medical board is not subject to subpoena regarding
findings it makes in assisting the executive director or board of
trustees under this section, and its members may not be held liable
for any opinions, conclusions, or recommendations made under this
section.
SECTION 9. Sections 825.212(a), (b), and (c), Government
Code, are amended to read as follows:
(a) The [In addition to any other requirements provided by
law, the] board of trustees shall adopt a code or codes of [enforce
an] ethics, including standards of ethical conduct and disclosure
requirements, applicable to:
(1) trustees;
(2) [policy as provided by this section for]
employees; and
(3) any contractors or any categories of contractors
that the board of trustees determines provide:
(A) advice or opinion [of and consultants and
advisors] to the retirement system that is the basis for a
significant decision or action by or on behalf of the retirement
system; or
(B) significant services to the retirement
system that relate to the administration and operation of the
retirement system.
(b) In any code of ethics adopted under this section, [Each
employee of the retirement system who exercises significant
decisionmaking or fiduciary authority, as determined by] the board
of trustees may:
(1) impose enhanced[, shall file financial]
disclosure requirements on employees that [statements with a person
designated by] the board of trustees determines exercise
significant fiduciary authority;
(2) impose disclosure requirements on contractors for
expenditures on behalf of retirement system trustees or employees
in amounts equal to or greater than a minimum amount considered
material by the board of trustees; or
(3) address topics related to ethical conduct,
including prohibited conduct, conflicts of interest, waivers of
conflicts of interest, remedies for conflicts of interest, and
sanctions. [The content of a financial disclosure statement must
comply substantially with the requirements of Subchapter B, Chapter
572. A statement must be filed not later than the 30th day after the
date a person is employed in a significant decisionmaking or
fiduciary position and annually after employment not later than
April 30. The filing deadline may be postponed by the executive
director for not more than 60 days on written request or for an
additional period for good cause, as determined by the chairman of
the board. The retirement system shall maintain a financial
disclosure statement for at least five years after the date of its
filing.]
(c) This section preempts the common law of conflicts of
interest as applied to trustees, employees, and contracts of [An
employee who has a business or commercial relationship that could
reasonably be expected to diminish the employee's independence of
judgment in the performance of the employee's responsibilities to]
the retirement system [shall disclose that relationship in writing
to a person designated by the board].
SECTION 10. Section 825.312(b), Government Code, is amended
to read as follows:
(b) The retirement system shall pay from the account all
administrative expenses of the retirement system [that exceed the
amounts appropriated under Section 825.404(d) and] that are
required to perform the fiduciary duties of the board.
SECTION 11. The heading to Section 825.313, Government
Code, is amended to read as follows:
Sec. 825.313. TRANSFERS FROM INTEREST [OR STATE
CONTRIBUTION] ACCOUNT.
SECTION 12. Section 825.313(d), Government Code, is amended
to read as follows:
(d) The board of trustees, by resolution recorded in its
minutes, may transfer from the interest account to the expense
account an amount necessary to cover the expenses of the retirement
system for the fiscal year [that exceed the amount of operating
expenses appropriated under Section 825.404(d) and] that are
required to perform the fiduciary duties of the board[, including
the expense of servicing mortgages insured by the Federal Housing
Administration under the National Housing Act (12 U.S.C. Section
1701 et seq.)].
SECTION 13. Section 825.314, Government Code, is amended to
read as follows:
Sec. 825.314. USE [AND REPORTING] OF STATE CONTRIBUTIONS
[AND OTHER APPROPRIATIONS AND ASSETS]. [(a)] The retirement
system shall use all assets contributed by the state[, other than
operating expenses appropriated under Section 825.404(d),] to pay
benefits authorized by this subtitle.
[(b) The staff of the retirement system shall report to the
board at each board meeting the amounts and uses since the preceding
board meeting of any money expended by the system from amounts
transferred under Section 825.313(d) and include an explanation of
why the amounts were needed to perform the fiduciary duties of the
board. The retirement system annually shall prepare and issue to
each contributing member and annuitant and to the governor,
lieutenant governor, and speaker of the house of representatives a
summary of the reports presented during the preceding year to the
board.]
SECTION 14. The heading to Section 825.404, Government
Code, is amended to read as follows:
Sec. 825.404. COLLECTION OF STATE CONTRIBUTIONS [AND
APPROPRIATED OPERATING EXPENSES].
SECTION 15. Section 825.404(e), Government Code, is amended
to read as follows:
(e) All money appropriated by the state to the retirement
system shall be paid to the state contribution account in equal
monthly installments as provided by Section 403.093(c)[,
Government Code, except money appropriated under Subsection (d),
which remains in the general revenue fund until expenses are
approved under Chapter 2103].
SECTION 16. Section 825.410(b), Government Code, is amended
to read as follows:
(b) Service credit shall be established pursuant to the
following provisions:
(1) The retirement system shall credit a member's
payments made under this section to a suspense account in the trust
fund until the sum of the payments equals the amount required for
one year of service credit, at which time the retirement system
shall deposit the payments in the appropriate accounts in the trust
fund and grant the applicable amount of service credit. No credit
shall be established for service pursuant to Section 823.501 [or
Section 825.403] until a lump sum has been paid or all payroll
deduction or installment payments have been completed.
(2) No credit shall be established for other service
when the cost of establishing the service has been determined by
using withdrawn service to be reinstated pursuant to Section
823.501 [or previously unreported service to be established
pursuant to Section 825.403] until a lump sum or all payroll
deductions or installments for the withdrawn [or previously
unreported] service have been paid.
(3) All other service shall be credited when
sufficient payroll deductions or installments have been completed
to satisfy the cost requirements for a year of service.
SECTION 17. Sections 825.507(a), (b), (c), (f), and (g),
Government Code, are amended to read as follows:
(a) Records of a participant and information about the
records of a participant that are in the custody of the retirement
system or of an administrator, carrier, attorney, consultant, or
governmental agency, including the comptroller, acting in
cooperation with or on behalf of the retirement system are
confidential and not subject to public disclosure [in a form that
would identify an individual and are exempt from the public access
provisions of Chapter 552, except as otherwise provided by this
section]. Because the records and information described by this
section [subsection] are exempt from the public access provisions
of Chapter 552, the retirement system or an administering firm,
carrier, attorney, consultant, or governmental agency, including
the comptroller, acting in cooperation with or on behalf of the
retirement system, is not required to accept or comply with a
request for a record or information about a record or to seek an
opinion from the attorney general, except as otherwise provided by
this section.
(b) The retirement system may release records of a
participant, or information about the records of a participant,
including a participant to which Chapter 803 applies, to:
(1) the participant or the participant's attorney or
guardian or another person who the executive director determines is
acting on behalf of the participant;
(2) the executor or administrator of the deceased
participant's estate, including information relating to the
deceased participant's beneficiary, or if an executor or
administrator of the deceased participant's estate has not been
named, a person or entity who the executive director determines is
acting in the interest of the deceased participant's estate, or an
heir, legatee, or devisee of the deceased participant;
(3) a spouse or former spouse of the participant if the
executive director determines that the information is relevant to
the spouse's or former spouse's interest in member accounts,
benefits, or other amounts payable by the retirement system;
(4) an administrator, carrier, consultant, attorney,
or agent acting on behalf of the retirement system;
(5) a governmental entity, an employer, or the
designated agent of an employer, only to the extent the retirement
system needs to share the information to perform the purposes of the
retirement system, as determined by the executive director;
(6) a person authorized by the participant in writing
to receive the information;
(7) a federal, state, or local criminal law
enforcement agency that requests a record for a law enforcement
purpose;
(8) the attorney general to the extent necessary to
enforce child support; or
(9) a party in response to a subpoena issued under
applicable law if the executive director determines that the
participant will have a reasonable opportunity to contest the
subpoena.
(c) The records of a participant and information about the
records remain confidential after release to a person as authorized
by this section. This section does not prevent the retirement
system or administering firm or carrier acting in cooperation with
or on behalf of the retirement system from disclosing or confirming
[disclosure or confirmation], on an individual basis, [of] the
status or identity of a participant as a member, former member,
retiree, deceased member or retiree, beneficiary, or alternate
payee of the retirement system.
(f) This section does not authorize the retirement system to
compile or disclose a list of participants' names, addresses,
including e-mail addresses, or social security numbers unless the
executive director determines that a compilation or disclosure is
necessary to administer the retirement system.
(g) In this section, "participant" means a member, former
member, retiree, annuitant, beneficiary, or alternate payee of the
retirement system, or an employee or contractor of an employer
covered by the retirement system for whom records were received by
the retirement system for the purpose of administering the terms of
the plan, including for audit or investigative purposes.
SECTION 18. Section 825.515(a), Government Code, is amended
to read as follows:
(a) At least annually, the retirement system shall acquire
and maintain records identifying members and specifying the types
of positions they hold as members. Employers shall provide to the
retirement system information specifying the type of position held
by each member [The type of position shall be identified] as
Administrative/Professional, Teacher/Full-Time Librarian,
Support, Bus Driver, or Peace Officer. Employers shall also
provide to the retirement system the work e-mail address for each
member. For each member identified as a Peace Officer, the records
must specify whether the member is an employee of an institution of
higher education or of a public school that is not an institution of
higher education. An employer shall provide the information
required by this section in the form and manner specified by the
retirement system.
SECTION 19. Section 1575.003(1), Insurance Code, is amended
to read as follows:
(1) "Dependent" means:
(A) the spouse of a retiree;
(B) a [an unmarried] child of a retiree or
deceased active member if the child is younger than 26 [25] years of
age, including:
(i) an adopted child or child who is
lawfully placed for legal adoption;
(ii) a foster child, stepchild, or other
child who is in a regular parent-child relationship; or
(iii) a [recognized] natural child;
(C) a retiree's [recognized] natural child,
adopted child, foster child, stepchild, or other child who is in a
regular parent-child relationship and who lives with or has his or
her care provided by the retiree or surviving spouse on a regular
basis regardless of the child's age, if the child has a mental
disability or is physically incapacitated to an extent that the
child is dependent on the retiree or surviving spouse for care or
support, as determined by the trustee; or
(D) a deceased active member's [recognized]
natural child, adopted child, foster child, stepchild, or other
child who is in a regular parent-child relationship, without regard
to the age of the child, if, while the active member was alive, the
child:
(i) lived with or had the child's care
provided by the active member on a regular basis; and
(ii) had a mental disability or was
physically incapacitated to an extent that the child was dependent
on the active member or surviving spouse for care or support, as
determined by the trustee.
SECTION 20. Section 1575.205(c), Insurance Code, is amended
to read as follows:
(c) The trustee may spend a part of the money received for
the group program to offset a part of the costs for optional
coverage paid by retirees if [the expenditure does not reduce the
period] the group program is projected to remain financially
solvent during the currently funded [by more than one year in a]
biennium.
SECTION 21. Section 1579.004, Insurance Code, is amended to
read as follows:
Sec. 1579.004. DEFINITION OF DEPENDENT. In this chapter,
"dependent" means:
(1) a spouse of a full-time employee or part-time
employee;
(2) a [an unmarried] child of a full-time or part-time
employee if the child is younger than 26 [25] years of age,
including:
(A) an adopted child or child who is lawfully
placed for adoption;
(B) a foster child, stepchild, or other child who
is in a regular parent-child relationship; and
(C) a [recognized] natural child;
(3) a full-time or part-time employee's [recognized]
natural child, adopted child, foster child, stepchild, or other
child who is in a regular parent-child relationship and who lives
with or has his or her care provided by the employee or the
surviving spouse on a regular basis, regardless of the child's age,
if the child has a mental disability or is physically incapacitated
to an extent that the child is dependent on the employee or
surviving spouse for care or support, as determined by the board of
trustees; and
(4) notwithstanding any other provision of this code,
any other dependent of a full-time or part-time employee specified
by rules adopted by the board of trustees.
SECTION 22. The following laws are repealed:
(1) Section 825.211, Government Code;
(2) Sections 825.212(d), (e), (f), (g), and (h),
Government Code;
(3) Sections 825.402(b), (c), and (d), Government
Code;
(4) Section 825.404(d), Government Code; and
(5) Section 825.411, Government Code.
SECTION 23. This Act takes effect September 1, 2013.
* * * * *