Texas 2015 - 84th Regular

Texas House Bill HB3897 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	84R22452 KFF-D
2	2	By: Kuempel H.B. No. 3897
3	3	Substitute the following for H.B. No. 3897:
4	4	By: Alonzo C.S.H.B. No. 3897
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to contributions to, benefits from, membership in, and the
10	10	administration of systems and programs administered by the Teacher
11	11	Retirement System of Texas.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Sections 22.004(b) and (d), Education Code, are
14	14	amended to read as follows:
15	15	(b) A district that does not participate in the program
16	16	described by Subsection (a) shall make available to its employees,
17	17	including employees whose coverage under the group program
18	18	established under Chapter 1575, Insurance Code, has been suspended,
19	19	group health coverage provided by a risk pool established by one or
20	20	more school districts under Chapter 172, Local Government Code, or
21	21	under a policy of insurance or group contract issued by an insurer,
22	22	a company subject to Chapter 842, Insurance Code, or a health
23	23	maintenance organization under Chapter 843, Insurance Code. The
24	24	coverage must meet the substantive coverage requirements of Chapter
25	25	1251, Subchapter A, Chapter 1364, and Subchapter A, Chapter 1366,
26	26	Insurance Code, and any other law applicable to group health
27	27	insurance policies or contracts issued in this state. The coverage
28	28	must include major medical treatment but may exclude experimental
29	29	procedures. In this subsection, "major medical treatment" means a
30	30	medical, surgical, or diagnostic procedure for illness or
31	31	injury. The coverage may include managed care or preventive care
32	32	and must be comparable to the basic health coverage provided under
33	33	Chapter 1551, Insurance Code. The [board of trustees of the Teacher
34	34	Retirement System of Texas shall adopt rules to determine whether a
35	35	school district's group health coverage is comparable to the basic
36	36	health coverage specified by this subsection. The rules must
37	37	provide for consideration of the] following factors shall be
38	38	considered [concerning the district's coverage] in determining
39	39	whether a school [the] district's coverage is comparable to the
40	40	basic health coverage specified by this subsection:
41	41	(1) the deductible amount for service provided inside
42	42	and outside of the network;
43	43	(2) the coinsurance percentages for service provided
44	44	inside and outside of the network;
45	45	(3) the maximum amount of coinsurance payments a
46	46	covered person is required to pay;
47	47	(4) the amount of the copayment for an office visit;
48	48	(5) the schedule of benefits and the scope of
49	49	coverage;
50	50	(6) the lifetime maximum benefit amount; and
51	51	(7) verification that the coverage is issued by a
52	52	provider licensed to do business in this state by the Texas
53	53	Department of Insurance or is provided by a risk pool authorized
54	54	under Chapter 172, Local Government Code, or that a district is
55	55	capable of covering the assumed liabilities in the case of coverage
56	56	provided through district self-insurance.
57	57	(d) Each district [shall report the district's compliance
58	58	with this section to the executive director of the Teacher
59	59	Retirement System of Texas not later than March 1 of each
60	60	even-numbered year in the manner required by the board of trustees
61	61	of the Teacher Retirement System of Texas. For a district] that
62	62	does not participate in the program described by Subsection (a)
63	63	shall prepare a report addressing the district's compliance with
64	64	this section. The [, the] report must be available for review,
65	65	together with the policy or contract for the group health coverage
66	66	plan, at the central administrative office of each campus in the
67	67	district and be posted on the district's Internet website if the
68	68	district maintains a website, must be based on the district group
69	69	health coverage plan in effect during the current plan year, and
70	70	must include:
71	71	(1) appropriate documentation of:
72	72	(A) the district's contract for group health
73	73	coverage with a provider licensed to do business in this state by
74	74	the Texas Department of Insurance or a risk pool authorized under
75	75	Chapter 172, Local Government Code; or
76	76	(B) a resolution of the board of trustees of the
77	77	district authorizing a self-insurance plan for district employees
78	78	and of the district's review of district ability to cover the
79	79	liability assumed;
80	80	(2) the schedule of benefits;
81	81	(3) the premium rate sheet, including the amount paid
82	82	by the district and employee;
83	83	(4) the number of employees covered by the health
84	84	coverage plan offered by the district; and
85	85	(5) information concerning the ease of completing the
86	86	report[, as required by the executive director of the Teacher
87	87	Retirement System of Texas; and
88	88	[(6) any other information considered appropriate by
89	89	the executive director of the Teacher Retirement System of Texas].
90	90	SECTION 2. Section 22.101(2), Education Code, is amended to
91	91	read as follows:
92	92	(2) "Employee" means an individual who:
93	93	(A) is employed by one of the following employers
94	94	in a position eligible for membership in [active, contributing
95	95	member of] the Teacher Retirement System of Texas based solely on
96	96	that employment [who]:
97	97	(i) [(A) is employed by] a school district;
98	98	[,]
99	99	(ii) another [other] educational district
100	100	whose employees are members of the Teacher Retirement System of
101	101	Texas; [,]
102	102	(iii) a participating charter school; [,]
103	103	or
104	104	(iv) a regional education service center;
105	105	(B) [is not a retiree eligible for coverage under
106	106	the program established under Chapter 1575, Insurance Code;
107	107	[(C)] is not eligible for coverage authorized [by
108	108	a group insurance program] under Chapter 1551, 1575, or 1601,
109	109	Insurance Code; and
110	110	(C) [(D)] is not [an individual] performing
111	111	[personal services] for the employer [a district, other educational
112	112	district that is a member of the Teacher Retirement System of Texas,
113	113	participating charter school, or regional education service
114	114	center] as an independent contractor services that are used to
115	115	establish eligibility for health care supplementation under this
116	116	subchapter.
117	117	SECTION 3. Section 42.260(c), Education Code, is amended to
118	118	read as follows:
119	119	(c) Notwithstanding any other provision of this code, a
120	120	school district or participating charter school may use the
121	121	following amount of funds only to pay contributions under a group
122	122	health coverage plan for district or school employees:
123	123	(1) an amount equal to 75 percent of the amount
124	124	certified for the district or school under Subsection (b); or
125	125	(2) if the following amount is less than the amount
126	126	specified by Subdivision (1), the sum of:
127	127	(A) the amount determined by multiplying the
128	128	amount of $900 or the amount specified in the General
129	129	Appropriations Act for that year for purposes of the state
130	130	contribution under Section 1579.251 [9, Article 3.50-7], Insurance
131	131	Code, by the number of district or school employees who participate
132	132	in a group health coverage plan provided by or through the district
133	133	or school; and
134	134	(B) the difference between the amount necessary
135	135	for the district or school to comply with Section 1581.052 [Section
136	136	3, Article 3.50-9], Insurance Code, for the school year and the
137	137	amount the district or school is required to use to provide health
138	138	coverage under Section 1581.051, Insurance Code, [2 of that
139	139	article] for that year.
140	140	SECTION 4. Sections 821.001(4) and (6), Government Code,
141	141	are amended to read as follows:
142	142	(4) "Annual compensation" means the compensation to a
143	143	member of the retirement system for service during a 12-month
144	144	period determined by the retirement system [school year] that is
145	145	reportable and subject to contributions as provided by Section
146	146	822.201.
147	147	(6) "Employee" means a person who is employed, as
148	148	determined by the retirement system, on other than a temporary
149	149	basis by a single [an] employer for at least one-half time at a
150	150	regular rate of pay comparable to that of other persons employed in
151	151	similar positions.
152	152	SECTION 5. Section 822.001, Government Code, is amended by
153	153	adding Subsection (c) to read as follows:
154	154	(c) Membership in the retirement system may only be
155	155	established through employment with a single employer on at least a
156	156	half-time basis.
157	157	SECTION 6. Section 822.003(c), Government Code, is amended
158	158	to read as follows:
159	159	(c) A person does not terminate membership under Subsection
160	160	(a)(4) if the person:
161	161	(1) is performing military service creditable in the
162	162	retirement system;
163	163	(2) is on leave of absence from employment in a public
164	164	school; [or]
165	165	(3) is earning service credit in another retirement
166	166	system covered by Chapter 803 or 805; or
167	167	(4) is employed by an employer covered by the
168	168	retirement system and is not eligible for membership in the
169	169	retirement system because the person is employed on less than a
170	170	half-time basis.
171	171	SECTION 7. Section 822.005(c), Government Code, is amended
172	172	to read as follows:
173	173	(c) A person is not entitled to withdraw contributions if
174	174	the person [who] is employed, has applied for employment, or has
175	175	received a promise of employment with an employer [, in a position]
176	176	covered by the retirement system.
177	177	SECTION 8. Section 822.201(b), Government Code, is amended
178	178	to read as follows:
179	179	(b) "Salary and wages" as used in Subsection (a) means:
180	180	(1) normal periodic payments of money for service the
181	181	right to which accrues on a regular basis in proportion to the
182	182	service performed;
183	183	(2) amounts by which the member's salary is reduced
184	184	under a salary reduction agreement authorized by Chapter 610;
185	185	(3) amounts that would otherwise qualify as salary and
186	186	wages under Subdivision (1) but are not received directly by the
187	187	member pursuant to a good faith, voluntary written salary reduction
188	188	agreement in order to finance payments to a deferred compensation
189	189	or tax sheltered annuity program specifically authorized by state
190	190	law or to finance benefit options under a cafeteria plan qualifying
191	191	under Section 125 of the Internal Revenue Code of 1986, if:
192	192	(A) the program or benefit options are made
193	193	available to all employees of the employer; and
194	194	(B) the benefit options in the cafeteria plan are
195	195	limited to one or more options that provide deferred compensation,
196	196	group health and disability insurance, group term life insurance,
197	197	dependent care assistance programs, or group legal services plans;
198	198	(4) performance pay awarded to an employee by a school
199	199	district as part of a total compensation plan approved by the board
200	200	of trustees of the district and meeting the requirements of
201	201	Subsection (e);
202	202	(5) the benefit replacement pay a person earns under
203	203	Subchapter H, Chapter 659, except as provided by Subsection (c);
204	204	(6) stipends paid to teachers in accordance with
205	205	Section 21.410, 21.411, 21.412, or 21.413, Education Code;
206	206	(7) amounts by which the member's salary is reduced or
207	207	that are deducted from the member's salary as authorized by
208	208	Subchapter J, Chapter 659;
209	209	(8) a merit salary increase made under Section 51.962,
210	210	Education Code;
211	211	(9) amounts received under the relevant parts of the
212	212	educator excellence awards program under Subchapter O, Chapter 21,
213	213	Education Code, or a mentoring program under Section 21.458,
214	214	Education Code, that authorize compensation for service;
215	215	(10) salary amounts designated as health care
216	216	supplementation by an employee under Subchapter D, Chapter 22,
217	217	Education Code; and
218	218	(11) to the extent required by Sections 3401(h) and
219	219	414(u)(12) [414(u)(2)], Internal Revenue Code of 1986,
220	220	differential wage payments received by an individual from an
221	221	employer on or after January 1, 2009, while the individual is
222	222	performing qualified military service as defined by Section 414(u),
223	223	Internal Revenue Code of 1986.
224	224	SECTION 9. Section 823.006, Government Code, is amended to
225	225	read as follows:
226	226	Sec. 823.006. LIMITS ON ANNUAL CONTRIBUTIONS FOR PURCHASE
227	227	OF SERVICE CREDIT. Notwithstanding any other provision of this
228	228	subtitle, the retirement system shall [may] limit the purchase of
229	229	service credit to the extent required by applicable limits on the
230	230	amount of annual contributions a participant may make to a
231	231	qualified plan under Sections 401(a) and 415(c), Internal Revenue
232	232	Code of 1986.
233	233	SECTION 10. Section 823.401, Government Code, is amended by
234	234	amending Subsection (f) and adding Subsection (f-1) to read as
235	235	follows:
236	236	(f) Except as provided by Subsection (f-1), the [The] amount
237	237	of service credit a member may establish under this section may not
238	238	exceed the lesser of the number of years of membership service
239	239	credit the member has in the retirement system for actual service in
240	240	public schools or 15 years.
241	241	(f-1) A member may not purchase more than five years of
242	242	service credit under this section for service credit considered
243	243	nonqualified service credit under Section 415(n)(3), Internal
244	244	Revenue Code of 1986.
245	245	SECTION 11. Sections 824.007(a) and (b), Government Code,
246	246	are amended to read as follows:
247	247	(a) In this section, "program administrator" means the
248	248	person who administers:
249	249	(1) the uniform program under Section 1601.102,
250	250	Insurance Code; or
251	251	(2) the group program under Chapter 1575, Insurance
252	252	Code.
253	253	(b) An individual eligible to participate in the uniform
254	254	program under Section 1601.102, Insurance Code, or the group
255	255	program under Chapter 1575, Insurance Code, may authorize the
256	256	retirement system to deduct the amount of the contribution and any
257	257	other qualified health insurance premium from the individual's
258	258	regular monthly service or disability retirement annuity payment if
259	259	the individual is:
260	260	(1) eligible to receive a monthly annuity from the
261	261	retirement system greater than the amount of the authorized
262	262	deduction; and
263	263	(2) eligible under Section 402(l), Internal Revenue
264	264	Code of 1986, or a similar law, to elect to exclude from annual
265	265	gross income up to $3,000 of distributions from an eligible
266	266	retirement plan used for qualified health insurance premiums.
267	267	SECTION 12. Section 824.1012(a), Government Code, is
268	268	amended to read as follows:
269	269	(a) As an exception to Section 824.101(c), a retiree who
270	270	selected an optional service retirement annuity under Section
271	271	824.204(c)(1), (c)(2), or (c)(5) or an optional disability
272	272	retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
273	273	and who has received at least one payment under the plan selected
274	274	may change the optional annuity selection made by the retiree to a
275	275	standard service or disability retirement annuity as provided for
276	276	in this section. If the beneficiary of the optional annuity was
277	277	[is] the spouse [or former spouse] of the retiree when the retiree
278	278	designated the spouse as beneficiary of the optional annuity, to
279	279	change from the optional annuity to a standard retirement annuity
280	280	under this subsection, the spouse or former spouse, as applicable,
281	281	who was designated [,] the beneficiary of the optional annuity must
282	282	sign a notarized consent to the change[,] or a court with
283	283	jurisdiction over the marriage of [in a divorce proceeding
284	284	involving] the retiree and beneficiary must approve or order the
285	285	change [in the divorce decree or acceptance of a property
286	286	settlement]. The change in plan selection takes effect when the
287	287	retirement system receives the request to change the plan, provided
288	288	the signed consent form or court order, as applicable, is
289	289	subsequently received by the retirement system [it].
290	290	SECTION 13. Sections 824.1013(b) and (c-1), Government
291	291	Code, are amended to read as follows:
292	292	(b) If the beneficiary designated at the time of the
293	293	retiree's retirement is the spouse of the retiree at the time of the
294	294	designation:
295	295	(1) the spouse must give written, notarized consent to
296	296	the change;
297	297	(2) if the parties divorce after the designation, the
298	298	former spouse who was designated beneficiary must give written,
299	299	notarized consent to the change; or
300	300	(3) a court with jurisdiction over the marriage must
301	301	approve or order [have ordered] the change.
302	302	(c-1) Notwithstanding Subsection (c), a beneficiary
303	303	designated under this section is entitled on the retiree's death to
304	304	receive monthly payments of the survivor's portion of the retiree's
305	305	optional retirement annuity for the remainder of the beneficiary's
306	306	life if the beneficiary designated at the time of the retiree's
307	307	retirement is a trust and the beneficiary designated under this
308	308	section is:
309	309	(1) the sole beneficiary of that trust; or
310	310	(2) an individual who at the time of the retiree's
311	311	death is the sole beneficiary of that trust.
312	312	SECTION 14. Section 825.103, Government Code, is amended by
313	313	adding Subsection (h) to read as follows:
314	314	(h) The board of trustees may accept on behalf of the
315	315	retirement system gifts of money, services, or other property from
316	316	any public or private source.
317	317	SECTION 15. Section 825.115, Government Code, is amended by
318	318	adding Subsection (f) to read as follows:
319	319	(f) Notwithstanding any other law, Chapter 551 does not
320	320	apply to an assembly of the board of trustees or one of the board's
321	321	committees while attending a summit, conference, convention,
322	322	workshop, or other event held for educational purposes if the
323	323	assembly or committee does not deliberate, vote, or take action on a
324	324	specific matter of public business or public policy over which the
325	325	board of trustees or a committee of the board has supervision or
326	326	control. This subsection does not apply to a regular, special, or
327	327	emergency meeting of the board of trustees scheduled or called
328	328	under the board's bylaws.
329	329	SECTION 16. Section 825.208(b), Government Code, is amended
330	330	to read as follows:
331	331	(b) The retirement system is exempt from Sections 651.002
332	332	and 651.004, Chapter 660, [and] Subchapter K, Chapter 659, and
333	333	Subchapter A, Chapter 661, to the extent the board of trustees
334	334	determines an exemption is necessary for the performance of
335	335	fiduciary duties.
336	336	SECTION 17. Section 825.212, Government Code, is amended by
337	337	adding Subsection (d) to read as follows:
338	338	(d) Notwithstanding any other law, all personal financial
339	339	disclosures made by employees of the retirement system under this
340	340	section, including a rule or policy adopted under this section, are
341	341	confidential and excepted from the requirements of Section 552.021.
342	342	SECTION 18. Section 825.3011(b), Government Code, is
343	343	amended to read as follows:
344	344	(b) Chapter 551 does not require the board of trustees to
345	345	confer with one or more employees, consultants, or legal counsel of
346	346	the retirement system or with a third party, including
347	347	representatives of an issuer of restricted securities or a private
348	348	investment fund, in an open meeting if the only purpose of the
349	349	conference is to receive information from or question the
350	350	employees, consultants, or legal counsel of the retirement system
351	351	or the third party relating to:
352	352	(1) [an] investment transactions or [a] potential
353	353	investment transactions if, before conducting the closed meeting, a
354	354	majority of [by] the board of trustees in an open meeting vote that
355	355	deliberating or conferring in an open meeting would have a
356	356	detrimental effect on the position of the retirement system in
357	357	negotiations with third parties or put the retirement system at a
358	358	competitive disadvantage in the market [in a private investment
359	359	fund]; or
360	360	(2) the purchase, holding, or disposal of restricted
361	361	securities or a private investment fund's investment in restricted
362	362	securities if, under Section 552.143, the information discussed
363	363	would be confidential and excepted from the requirements of Section
364	364	552.021 if the information was included in the records of a
365	365	governmental body.
366	366	SECTION 19. Section 825.306, Government Code, is amended to
367	367	read as follows:
368	368	Sec. 825.306. CREDITING SYSTEM ASSETS. (a) The assets of
369	369	the retirement system shall be maintained and reported in a manner
370	370	that reflects the source of the assets or the purpose for which the
371	371	assets are held, using appropriate ledgers and subledgers, in
372	372	accordance with generally accepted accounting principles
373	373	prescribed by the Governmental Accounting Standards Board or its
374	374	successor. In addition, the maintenance and reporting of the
375	375	assets must be in compliance with applicable tax law and consistent
376	376	with any fiduciary duty owed with respect to the trust. In the
377	377	alternative, the assets may be credited, according to the purpose
378	378	for which they are held, to one of the following accounts:
379	379	(1) member savings account;
380	380	(2) state contribution account;
381	381	(3) retired reserve account;
382	382	(4) interest account;
383	383	(5) expense account; or
384	384	(6) deferred retirement option account.
385	385	(b) Notwithstanding any other law, a requirement to deposit
386	386	in or transfer assets from one of the accounts described under
387	387	Subsection (a) is satisfied by maintaining and reporting the assets
388	388	in accordance with that subsection.
389	389	SECTION 20. Section 825.312(a), Government Code, is amended
390	390	to read as follows:
391	391	(a) The retirement system shall deposit in the expense
392	392	account:
393	393	(1) money transferred from the interest account under
394	394	Section 825.313(d); and
395	395	(2) money received from the Texas Public School
396	396	Retired Employees Group Benefits [Insurance] Program for service
397	397	performed for the program by the retirement system.
398	398	SECTION 21. Section 825.403, Government Code, is amended by
399	399	amending Subsections (h) and (j) and adding Subsections (h-1),
400	400	(h-2), (h-3), and (h-4) to read as follows:
401	401	(h) Subject to Subsections (h-1), (h-2), (h-3), and (h-4),
402	402	if [If] deductions were previously required but not paid, the
403	403	retirement system may not provide benefits based on the service or
404	404	compensation unless the deposits required by this section have been
405	405	fully paid.
406	406	(h-1) If, due to an error, an employer does not report to the
407	407	retirement system all service rendered or compensation paid as
408	408	required by this section and the error relates to service rendered
409	409	or compensation paid in:
410	410	(1) the current school year, the error may be
411	411	corrected by submitting to the retirement system in the manner
412	412	prescribed by the retirement system:
413	413	(A) a corrected report; and
414	414	(B) contributions on the unreported service or
415	415	compensation, plus interest at the rate provided under Section
416	416	825.408, computed from the report month the service or compensation
417	417	should have been reported to the retirement system to the date the
418	418	contributions related to that service or compensation are submitted
419	419	to the retirement system; or
420	420	(2) the preceding school year, the error may be
421	421	corrected if the following requirements are met:
422	422	(A) the person for whom contributions are due is
423	423	employed by the employer and the employer owes the person
424	424	compensation payable in the current year;
425	425	(B) the employer requests from the retirement
426	426	system a waiver of the documentation requirements under Section
427	427	825.408(a) and the request is granted by the retirement system;
428	428	(C) the employer, in the manner prescribed by the
429	429	retirement system:
430	430	(i) submits to the retirement system member
431	431	contributions on the unreported service or compensation in the
432	432	manner provided by Section 825.409 by making the corresponding
433	433	reduction in the compensation owed to the person;
434	434	(ii) submits to the retirement system any
435	435	employer contributions due on the compensation;
436	436	(iii) pays the interest on the
437	437	contributions described by Subparagraphs (i) and (ii) at the rate
438	438	provided by Section 825.408; and
439	439	(iv) corrects the records relating to the
440	440	report months in which the service or compensation are at issue; and
441	441	(D) the error is corrected in accordance with
442	442	this subsection not later than the final day of the school year
443	443	following the school year in which the service or compensation at
444	444	issue was rendered or paid, as applicable.
445	445	(h-2) On receipt of the member and employer contributions
446	446	and the corrected reports under Subsection (h-1), the retirement
447	447	system shall credit the service or compensation, as applicable, to
448	448	the person.
449	449	(h-3) The retirement system may not credit service or
450	450	compensation to a person in the manner provided by Subsections
451	451	(h-1) and (h-2) for service rendered or compensation received by
452	452	the person in any school year before the preceding school year. If
453	453	service is rendered or compensation paid by a person in a school
454	454	year before the preceding school year, the [The] person's employer
455	455	at the time the unreported service was rendered or compensation was
456	456	paid must verify the service or compensation as required by
457	457	Subsection (j) and the person must submit the verification to the
458	458	retirement system not later than five years after the end of the
459	459	school year in which the service was rendered or compensation was
460	460	paid. To establish the service or compensation credit, the person
461	461	must deposit with the retirement system the actuarial present
462	462	value, at the time of deposit, of the additional standard
463	463	retirement annuity benefits that would be attributable to the
464	464	purchase of service or compensation credit under this section,
465	465	based on rates and tables recommended by the retirement system's
466	466	actuary and adopted by the board of trustees.
467	467	(h-4) The board of trustees shall:
468	468	(1) prescribe terms for payments under Subsections
469	469	(h-1), (h-2), and (h-3) [this subsection]; and
470	470	(2) credit the person for prior service and
471	471	compensation to which the person is entitled under this subtitle.
472	472	(j) Except as otherwise provided by this section, if [If]
473	473	deductions were previously required but not paid, proof of service
474	474	satisfactory to the retirement system must be made before service
475	475	credit is granted or payment for the credit is required. Proof of
476	476	service is sufficient if the person's employer documents that the
477	477	employer has records made at or near the time of service that
478	478	establish the amount of time worked and salary earned. An
479	479	affidavit based on memory without written records made at or near
480	480	the time of service is not sufficient documentation for the
481	481	establishment of service credit. The retirement system may audit
482	482	records used for documentation under this subsection. A person who
483	483	does not obtain proof of service as required by this section may not
484	484	establish the service or compensation credit.
485	485	SECTION 22. Section 825.408(a), Government Code, is amended
486	486	to read as follows:
487	487	(a) An employer that fails to remit, before the seventh day
488	488	after the last day of a month, all member and employer deposits and
489	489	documentation of the deposits required by this subchapter to be
490	490	remitted by the employer for the month shall pay to the retirement
491	491	system, in addition to the deposits, interest on the unpaid [or
492	492	undocumented] amounts at an annual rate prescribed by this
493	493	subsection and a late fee in an amount determined by the retirement
494	494	system, which may include an amount for each day the documentation
495	495	is submitted after the deadline imposed by this subsection
496	496	[compounded monthly]. The rate of interest is the rate established
497	497	under Section 825.313(b)(1), plus two percent. Interest required
498	498	under this subsection [section] is creditable to the interest
499	499	account. The [On request, the] retirement system may grant a waiver
500	500	of the deadline imposed by this subsection based on an employer's
501	501	financial or technological resources.
502	502	SECTION 23. Section 825.4092(c), Government Code, is
503	503	amended to read as follows:
504	504	(c) Except as provided by Subsection (e), each payroll
505	505	period, for each retiree who is enrolled in the Texas Public School
506	506	Employees Group Insurance Program under Chapter 1575, Insurance
507	507	Code, the employer who reports the employment of a retiree shall
508	508	contribute to the trust fund established under that chapter an
509	509	amount established by the retirement system. In determining the
510	510	amount to be contributed by the employer under this subsection, the
511	511	retirement system shall consider [any difference between] the
512	512	amount a [the] retiree is required to pay for the retiree and any
513	513	enrolled dependents to participate in the group program and the
514	514	[full] cost of the retiree's and enrolled dependents' participation
515	515	in the group program[, as determined by the retirement system]. If
516	516	more than one employer reports the retiree to the retirement system
517	517	during a month, the amount of the required payment shall be prorated
518	518	among the employers.
519	519	SECTION 24. Section 825.410(a), Government Code, is amended
520	520	to read as follows:
521	521	(a) Payments to establish special service credit as
522	522	authorized under this subtitle, other than service credit that may
523	523	only be determined and paid for at the time of retirement such as
524	524	unused leave as authorized by Section 823.403, may be made in a lump
525	525	sum by a monthly payroll deduction in an amount not less than
526	526	one-twelfth of the contribution required to establish at least one
527	527	year of service credit, or in equal monthly installments over a
528	528	period not to exceed the lesser of the number of years of credit to
529	529	be purchased or 60 months. Installment and payroll deduction
530	530	payments are due on the first day of each calendar month in the
531	531	payment period. If an installment or payroll deduction payment is
532	532	not made in full within 60 days after the due date, the retirement
533	533	system may refund all installment or payroll deduction payments
534	534	less fees paid on the lump sum due when installment or payroll
535	535	deduction payments began. Partial payment of an installment or
536	536	payroll deduction payment may be treated as nonpayment. A check
537	537	returned for insufficient funds or a closed account shall be
538	538	treated as nonpayment. When two or more consecutive monthly
539	539	payments have a returned check, a refund may be made. [If the
540	540	retirement system refunds payments pursuant to this subsection, the
541	541	member is not permitted to use the installment method of payment or
542	542	the payroll deduction method, as applicable, for the same service
543	543	for three years after the date of the refund. A member who requests
544	544	and receives a refund of installment or payroll deduction payments
545	545	also is not permitted to use the same method of payment for the same
546	546	service for three years after the date of the refund.]
547	547	SECTION 25. Section 825.504, Government Code, is amended by
548	548	amending Subsection (c) and adding Subsection (d) to read as
549	549	follows:
550	550	(c) Each reporting district shall cooperate with the
551	551	retirement system in ascertaining:
552	552	(1) a member's eligibility for membership in the
553	553	retirement system;
554	554	(2) a member's annual earnings, employment status, and
555	555	hours and days worked during any year; and
556	556	(3) any other information the retirement system
557	557	requires from the employer to administer the retirement system's
558	558	benefit plan.
559	559	(d) The board of trustees by rule may prescribe the form of
560	560	and procedures for filing certifications required by this section.
561	561	SECTION 26. Section 825.505, Government Code, is amended to
562	562	read as follows:
563	563	Sec. 825.505. AUDITS. For the purpose of determining the
564	564	propriety of employer reports, including demographic data, and
565	565	contributions or credits, the records of an employer concerning the
566	566	employment and compensation of all its personnel are subject to
567	567	audit and examination, in the offices of the employer during
568	568	regular working hours, by representatives of the retirement system
569	569	designated to conduct the audit and examination.
570	570	SECTION 27. Section 825.508(b), Government Code, is amended
571	571	to read as follows:
572	572	(b) The system must honor a power of attorney executed in
573	573	accordance with Chapter 752, Estates [Chapter XII, Section 490,
574	574	Texas Probate] Code.
575	575	SECTION 28. Section 825.509(b-1), Government Code, is
576	576	amended to read as follows:
577	577	(b-1) Notwithstanding Subsection (b)(3), with respect to a
578	578	distribution made on or after January 1, 2002, an otherwise
579	579	eligible portion of a rollover distribution that consists of
580	580	after-tax employee contributions not includable in gross income is
581	581	an eligible rollover distribution for purposes of this section. The
582	582	eligible portion may be transferred only:
583	583	(1) to an individual retirement account or annuity
584	584	described by Section 408(a) or (b), Internal Revenue Code of 1986;
585	585	(2) to a qualified plan described by Section 403(a),
586	586	Internal Revenue Code of 1986;
587	587	(3) for distributions occurring on or after January 1,
588	588	2007, to a qualified plan described by Section 401(a), Internal
589	589	Revenue Code of 1986, if the plan separately accounts for:
590	590	(A) the amounts transferred and the earnings on
591	591	amounts transferred; and
592	592	(B) the portion of the distribution that is
593	593	includable in gross income and the portion of the distribution that
594	594	is not includable in gross income; or
595	595	(4) to an annuity contract described by Section
596	596	403(b), Internal Revenue Code of 1986, that agrees to separately
597	597	account for amounts transferred and earnings on amounts
598	598	transferred, including for the portion of the distribution that is
599	599	includable in gross income and the portion of the distribution that
600	600	is not includable in gross income.
601	601	SECTION 29. Section 825.515(a), Government Code, is amended
602	602	to read as follows:
603	603	(a) At least annually, the retirement system shall acquire
604	604	and maintain records identifying members and specifying the types
605	605	of positions they hold as members. Employers shall provide to the
606	606	retirement system information specifying the type of position held
607	607	by each member as Administrative/Professional, Teacher/Full-Time
608	608	Librarian, Support, Bus Driver, Food Service Worker, or Peace
609	609	Officer. Employers shall also provide to the retirement system the
610	610	work e-mail address for each member. For each member identified as
611	611	a Peace Officer, the records must specify whether the member is an
612	612	employee of an institution of higher education or of a public school
613	613	that is not an institution of higher education. An employer shall
614	614	provide the information required by this section in the form and
615	615	manner specified by the retirement system.
616	616	SECTION 30. Section 830.201(h), Government Code, is amended
617	617	to read as follows:
618	618	(h) Before November 2 of each even-numbered year, the Texas
619	619	Higher Education Coordinating Board [board of trustees], in
620	620	coordination with the Legislative Budget Board, shall certify to
621	621	the comptroller for review and adoption an estimate of the amount
622	622	necessary to pay the state's contributions to the retirement system
623	623	for the following biennium. For qualifying employees under
624	624	Subsection (g)(1), the Texas Higher Education Coordinating Board
625	625	[board of trustees] shall include only the amount payable by the
626	626	state under Subsection (g)(1) in determining the amount to be
627	627	certified.
628	628	SECTION 31. The heading to Chapter 1575, Insurance Code, is
629	629	amended to read as follows:
630	630	CHAPTER 1575. TEXAS PUBLIC SCHOOL RETIRED EMPLOYEES GROUP BENEFITS
631	631	PROGRAM
632	632	SECTION 32. Section 1575.002(4), Insurance Code, is amended
633	633	to read as follows:
634	634	(4) "Group program" means the Texas Public School
635	635	Retired Employees Group Benefits [Insurance] Program authorized by
636	636	this chapter.
637	637	SECTION 33. Section 1575.004(a), Insurance Code, is amended
638	638	to read as follows:
639	639	(a) In this chapter, "retiree" means:
640	640	(1) an individual not eligible, at the time of the
641	641	individual's retirement, for coverage under a plan provided under
642	642	Chapter 1551 or 1601 who:
643	643	(A) has taken a service retirement under the
644	644	Teacher Retirement System of Texas after September 1, 2005, with at
645	645	least 10 years of service credit in the system, which may include up
646	646	to five years of military service credit, but which may not include
647	647	any other service credit purchased for equivalent or special
648	648	service credit, and either:
649	649	(i) the sum of the retiree's age and years
650	650	of service credit in the retirement system equals or exceeds 80 at
651	651	the time of retirement, regardless of whether the retiree had a
652	652	reduction in the retirement annuity for early age; or
653	653	(ii) the retiree has 30 or more years of
654	654	service credit in the retirement system at the time of retirement;
655	655	(B) has taken a service retirement under the
656	656	Teacher Retirement System of Texas after September 1, 2004, but on
657	657	or before August 31, 2005, and on September 1, 2005, either:
658	658	(i) meets the requirements for eligibility
659	659	for the group program for coverage as a retiree as those
660	660	requirements existed on August 31, 2004;
661	661	(ii) meets the requirements of Paragraph
662	662	(A); or
663	663	(iii) is enrolled in the group program and
664	664	was enrolled in the group program on August 31, 2005; or
665	665	(C) has taken a service retirement under the
666	666	Teacher Retirement System of Texas on or before August 31, 2004, and
667	667	who is enrolled in the group program on August 31, 2005;
668	668	(2) an individual who:
669	669	(A) has taken a disability retirement under the
670	670	Teacher Retirement System of Texas; and
671	671	(B) is entitled to receive monthly benefits from
672	672	the Teacher Retirement System of Texas; or
673	673	(3) an individual who:
674	674	(A) has taken a disability retirement under the
675	675	Teacher Retirement System of Texas;
676	676	(B) has at least 10 years of service credit in the
677	677	Teacher Retirement System of Texas on the date of disability
678	678	retirement, as determined under Section 824.304, Government Code;
679	679	and
680	680	(C) is not entitled to receive monthly benefits
681	681	from the Teacher Retirement System of Texas because those benefits
682	682	have been suspended in accordance with Section 824.310, Government
683	683	Code.
684	684	SECTION 34. Section 1575.153, Insurance Code, is amended to
685	685	read as follows:
686	686	Sec. 1575.153. BASIC COVERAGE. A retiree who applies for
687	687	coverage during an enrollment period may not be denied coverage in a
688	688	basic plan provided under this chapter unless:
689	689	(1) the retiree's coverage is suspended under Section
690	690	1575.165; or
691	691	(2) the trustee finds under Subchapter K that the
692	692	retiree defrauded or attempted to defraud the group program.
693	693	SECTION 35. Section 1575.155(a), Insurance Code, is amended
694	694	to read as follows:
695	695	(a) Subject to Section 1575.165, a [A] retiree
696	696	participating in the group program is entitled to secure for the
697	697	retiree's dependents group coverage provided for the retiree under
698	698	this chapter, as determined by the trustee.
699	699	SECTION 36. Section 1575.158(a), Insurance Code, is amended
700	700	to read as follows:
701	701	(a) Subject to Sections [Section] 1575.1581 and 1575.165,
702	702	the trustee may, in addition to providing a basic plan, contract for
703	703	and make available an optional group health benefit plan for
704	704	retirees, dependents, surviving spouses, or surviving dependent
705	705	children.
706	706	SECTION 37. Subchapter D, Chapter 1575, Insurance Code, is
707	707	amended by adding Section 1575.165 to read as follows:
708	708	Sec. 1575.165. SUSPENSION AND REACTIVATION OF COVERAGE
709	709	UNDER THE GROUP PROGRAM. (a) Coverage under the group program for a
710	710	retiree and the retiree's dependents shall be suspended during any
711	711	period the retiree is:
712	712	(1) eligible for and elects health benefit coverage
713	713	under a plan provided under Chapter 1551 or 1601; or
714	714	(2) employed by a public school and is, as a result of
715	715	that employment, eligible for health benefit coverage offered by
716	716	the public school.
717	717	(b) During the period a retiree's coverage under the group
718	718	program is suspended under this section, the retiree and the
719	719	retiree's dependents shall remain enrolled in the group program.
720	720	(c) A retiree and the retiree's eligible dependents whose
721	721	coverage under the group program is suspended under this section
722	722	shall be reactivated at the time the retiree:
723	723	(1) ceases to be covered under a plan provided under
724	724	Chapter 1551 or 1601, if the retiree is subject to Subsection
725	725	(a)(1); or
726	726	(2) terminates employment with or ceases to be
727	727	eligible for health benefit coverage offered by a public school, if
728	728	the retiree is subject to Subsection (a)(2).
729	729	(d) The trustee shall adopt rules necessary to implement
730	730	this section.
731	731	SECTION 38. Section 1575.204(b), Insurance Code, is amended
732	732	to read as follows:
733	733	(b) Each state fiscal year, each employer who reports to the
734	734	retirement system under Section 824.6022, Government Code, the
735	735	employment of a retiree who is enrolled in and receiving coverage
736	736	under the group program shall contribute to the fund an amount
737	737	established by the trustee. In determining the amount to be
738	738	contributed by the employer under this subsection, the trustee
739	739	shall consider the [difference, if any, between the contribution]
740	740	amount a [that the reported] retiree is required to pay for the
741	741	retiree and any enrolled dependents to participate in the group
742	742	program and the [full] cost of all retirees' [the retiree's] and
743	743	enrolled dependents' participation in the group program [, as
744	744	determined by the trustee]. If more than one employer reports the
745	745	retiree to the retirement system during a month, the amount of the
746	746	contribution required by this subsection shall be prorated among
747	747	the employers. The amounts required to be paid under this
748	748	subsection are not required to be paid by a reporting employer for a
749	749	retiree who retired from the retirement system before September 1,
750	750	2005.
751	751	SECTION 39. Section 1575.207, Insurance Code, is amended to
752	752	read as follows:
753	753	Sec. 1575.207. INTEREST ASSESSED ON LATE PAYMENT OF
754	754	DEPOSITS BY EMPLOYING PUBLIC SCHOOLS. (a) An employing public
755	755	school that does not remit to the trustee all contributions
756	756	required by this subchapter before the seventh day after the last
757	757	day of the month shall pay to the fund:
758	758	(1) the contributions; and
759	759	(2) interest on the unpaid amounts at the annual rate
760	760	of six percent [compounded monthly].
761	761	(b) The [On request, the] trustee may grant a waiver of the
762	762	deadline imposed by this section [based on an employing public
763	763	school's financial or technological resources].
764	764	SECTION 40. Section 1579.003, Insurance Code, is amended to
765	765	read as follows:
766	766	Sec. 1579.003. DEFINITION OF EMPLOYEE. In this chapter,
767	767	"employee" means an individual [a participating member of the
768	768	Teacher Retirement System of Texas] who is regularly employed by a
769	769	participating entity for an average of at least 10 hours per week
770	770	and who is not receiving coverage from a program under Chapter 1551,
771	771	1575, or 1601. The term does not include an individual performing
772	772	personal services as an independent contractor.
773	773	SECTION 41. Section 1579.004, Insurance Code, is amended to
774	774	read as follows:
775	775	Sec. 1579.004. DEFINITION OF DEPENDENT. In this chapter,
776	776	"dependent" means:
777	777	(1) a spouse of an [a full-time employee or part-time]
778	778	employee;
779	779	(2) a child of an [a full-time or part-time] employee
780	780	if the child is younger than 26 years of age, including:
781	781	(A) an adopted child or child who is lawfully
782	782	placed for adoption;
783	783	(B) a foster child, stepchild, or other child who
784	784	is in a regular parent-child relationship; and
785	785	(C) a natural child;
786	786	(3) an [a full-time or part-time] employee's natural
787	787	child, adopted child, foster child, stepchild, or other child who
788	788	is in a regular parent-child relationship and who lives with or has
789	789	his or her care provided by the employee or the surviving spouse on
790	790	a regular basis, regardless of the child's age, if the child has a
791	791	mental disability or is physically incapacitated to an extent that
792	792	the child is dependent on the employee or surviving spouse for care
793	793	or support, as determined by the board of trustees; and
794	794	(4) notwithstanding any other provision of this code,
795	795	any other dependent of an [a full-time or part-time] employee
796	796	specified by rules adopted by the board of trustees.
797	797	SECTION 42. Section 1579.006(a), Insurance Code, is amended
798	798	to read as follows:
799	799	(a) The following are exempt from execution, attachment,
800	800	garnishment, or any other process:
801	801	(1) benefit payments, including optional benefit
802	802	payments;
803	803	(2) contributions of [active] employees, the state,
804	804	and a participating entity, and any other contributions;
805	805	(3) any rights, benefits, or payments accruing to any
806	806	person under this chapter; and
807	807	(4) any money in the Texas school employees uniform
808	808	group coverage trust fund.
809	809	SECTION 43. Section 1579.202, Insurance Code, is amended to
810	810	read as follows:
811	811	Sec. 1579.202. ELIGIBLE EMPLOYEES. (a) Except as provided
812	812	by Section 1579.204, participation in the program is limited to
813	813	employees of participating entities who are full-time or [employees
814	814	and to] part-time employees [who are participating members in the
815	815	Teacher Retirement System of Texas].
816	816	(b) An employee described by Subsection (a) who applies for
817	817	coverage during an open enrollment period prescribed by the trustee
818	818	is automatically covered by the catastrophic care coverage plan
819	819	unless the employee:
820	820	(1) [specifically waives coverage under this chapter;
821	821	[(2)] selects a higher tier coverage plan; or
822	822	(2) [(3)] is expelled from the program.
823	823	SECTION 44. Section 1579.204, Insurance Code, is amended to
824	824	read as follows:
825	825	Sec. 1579.204. [CERTAIN] PART-TIME EMPLOYEES.
826	826	Notwithstanding any other provision of this chapter, a [A]
827	827	part-time employee of a participating entity [who is not a
828	828	participating member in the Teacher Retirement System of Texas] is
829	829	eligible to participate in the program only if the employee pays all
830	830	of the premiums and other costs associated with the health coverage
831	831	plan selected for [by] the employee and the employee's dependents.
832	832	SECTION 45. Section 1579.255, Insurance Code, is amended to
833	833	read as follows:
834	834	Sec. 1579.255. INTEREST ASSESSED ON LATE PAYMENT OF
835	835	CONTRIBUTIONS BY PARTICIPATING ENTITIES. (a) A participating
836	836	entity that does not remit to the trustee all contributions
837	837	required by this subchapter before the 16th [seventh] day [after
838	838	the last day] of the month shall pay to the Texas school employees
839	839	uniform group coverage trust fund:
840	840	(1) the contributions; and
841	841	(2) interest on the unpaid amounts at the annual rate
842	842	of six percent [compounded monthly].
843	843	(b) The [On request, the] trustee may grant a waiver of the
844	844	deadline imposed by this section [based on a participating entity's
845	845	financial or technological resources].
846	846	SECTION 46. Section 1581.001(1), Insurance Code, is amended
847	847	to read as follows:
848	848	(1) "Participating employee" means an employee of a
849	849	school district, other educational district whose employees are
850	850	members of the Teacher Retirement System of Texas, participating
851	851	charter school, or regional education service center who
852	852	participates in a group health coverage plan provided by or through
853	853	the district, school, or service center, including an employee
854	854	whose coverage under the group program established under Chapter
855	855	1575 has been suspended.
856	856	SECTION 47. Subchapter B, Chapter 1581, Insurance Code, is
857	857	amended by adding Section 1581.055 to read as follows:
858	858	Sec. 1581.055. REPORTING REQUIREMENT. Each school district
859	859	and other educational district whose employees are members of the
860	860	Teacher Retirement System of Texas, participating charter school,
861	861	and regional education service center shall annually report to the
862	862	Teacher Retirement System of Texas, under rules adopted by the
863	863	retirement system, the monthly amount each contributes toward the
864	864	payment of health coverage under this chapter.
865	865	SECTION 48. The following provisions are repealed:
866	866	(1) Section 825.404(b-1), Government Code; and
867	867	(2) Section 1579.106(c), Insurance Code.
868	868	SECTION 49. Section 821.001(4), Government Code, as amended
869	869	by this Act, applies only to a member of the Teacher Retirement
870	870	System of Texas who retires or dies on or after the effective date
871	871	of this Act.
872	872	SECTION 50. Section 825.4092(c), Government Code, as
873	873	amended by this Act, applies to a retiree of the Teacher Retirement
874	874	System of Texas regardless of whether the person retired from
875	875	employment before, on, or after the effective date of this Act.
876	876	SECTION 51. The changes in law made by this Act apply only
877	877	to health benefit plans provided under Chapters 1575, 1579, and
878	878	1581, Insurance Code, beginning with the first plan year that
879	879	begins on or after September 1, 2015. A plan year that begins before
880	880	September 1, 2015, is governed by the law as it existed immediately
881	881	before that date and that law is continued in effect for that
882	882	purpose.
883	883	SECTION 52. This Act takes effect September 1, 2015.