Texas 2017 - 85th Regular

Texas House Bill HB4078 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R9163 TSR-F
2	2	By: Flynn H.B. No. 4078
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to contributions to, benefits from, late fees imposed by,
8	8	and the administration of systems and programs administered by the
9	9	Teacher Retirement System of Texas.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 822.002, Government Code, is amended to
12	12	read as follows:
13	13	Sec. 822.002. EXCEPTIONS TO MEMBERSHIP REQUIREMENT. (a)
14	14	An employee of the public school system is not permitted to be a
15	15	member of the retirement system if the employee:
16	16	(1) is eligible and elects to participate in the
17	17	optional retirement program under Chapter 830; or
18	18	(2) [is solely employed by a public institution of
19	19	higher education that as a condition of employment requires the
20	20	employee to be enrolled as a student in the institution; or
21	21	[(3)] has retired under the retirement system and has
22	22	not been reinstated to membership pursuant to Section 824.005 or
23	23	824.307.
24	24	(b) An employee of a public institution of higher education
25	25	who is required to be enrolled as a student in the institution as a
26	26	condition of employment is not permitted to be a member of the
27	27	retirement system based on that student employment, and
28	28	compensation paid to the employee for work performed as a student
29	29	employee is not compensation subject to report and deduction for
30	30	member contributions or to credit in benefit computations under
31	31	Section 822.201.
32	32	SECTION 2. Section 824.1012, Government Code, is amended by
33	33	amending Subsection (a) and adding Subsection (a-1) to read as
34	34	follows:
35	35	(a) As an exception to Section 824.101(c), a retiree who
36	36	selected an optional service retirement annuity under Section
37	37	824.204(c)(1), (c)(2), or (c)(5) or an optional disability
38	38	retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
39	39	and who has received at least one payment under the plan selected
40	40	may change the optional annuity selection made by the retiree to a
41	41	standard service or disability retirement annuity as provided for
42	42	in this section. If the beneficiary of the optional annuity was
43	43	[is] the spouse [or former spouse] of the retiree when the retiree
44	44	designated the spouse as beneficiary of the optional annuity, to
45	45	change from the optional annuity to a standard retirement annuity
46	46	under this subsection, the spouse or former spouse, as applicable,
47	47	who was designated [,] the beneficiary of the optional annuity must
48	48	sign a notarized consent to the change[,] or a court with
49	49	jurisdiction over the marriage of [in a divorce proceeding
50	50	involving] the retiree and beneficiary must approve or order the
51	51	change [in the divorce decree or acceptance of a property
52	52	settlement]. The change in plan selection takes effect when the
53	53	retirement system receives the request to change the plan, provided
54	54	the signed consent form or court order, as applicable, is
55	55	subsequently received by the retirement system [it].
56	56	(a-1) The executive director or the executive director's
57	57	designee has exclusive authority to determine whether the language
58	58	in a court order described by Subsection (a) is sufficient to
59	59	indicate that the court has approved or ordered the change in plan
60	60	selection. A determination by the executive director or the
61	61	executive director's designee under this subsection may be appealed
62	62	only to the board of trustees, except that the board by rule may
63	63	waive the requirement that an appeal be to the board. An appeal to
64	64	the board is a contested case under Chapter 2001. The standard of
65	65	review of an appeal brought under this subsection is by substantial
66	66	evidence.
67	67	SECTION 3. Section 824.1013, Government Code, is amended by
68	68	amending Subsections (b) and (c-1) and adding Subsection (c-2) to
69	69	read as follows:
70	70	(b) If the beneficiary designated at the time of the
71	71	retiree's retirement is the spouse of the retiree at the time of the
72	72	designation:
73	73	(1) the spouse must give written, notarized consent to
74	74	the change;
75	75	(2) if the parties divorce after the designation, the
76	76	former spouse who was designated beneficiary must give written,
77	77	notarized consent to the change; or
78	78	(3) a court with jurisdiction over the marriage must
79	79	approve or order [have ordered] the change.
80	80	(c-1) Notwithstanding Subsection (c), a beneficiary
81	81	designated under this section is entitled on the retiree's death to
82	82	receive monthly payments of the survivor's portion of the retiree's
83	83	optional retirement annuity for the remainder of the beneficiary's
84	84	life if the beneficiary designated at the time of the retiree's
85	85	retirement is a trust and the beneficiary designated under this
86	86	section is:
87	87	(1) the sole beneficiary of that trust; or
88	88	(2) an individual who at the time of the retiree's
89	89	death is the sole beneficiary of that trust.
90	90	(c-2) The executive director or the executive director's
91	91	designee has exclusive authority to determine whether the language
92	92	in a court order described by Subsection (b) is sufficient to
93	93	indicate that the court has approved or ordered the change in the
94	94	designated beneficiary. A determination by the executive director
95	95	or the executive director's designee under this subsection may be
96	96	appealed only to the board of trustees, except that the board by
97	97	rule may waive the requirement that an appeal be to the board. An
98	98	appeal to the board is a contested case under Chapter 2001. The
99	99	standard of review of an appeal brought under this subsection is by
100	100	substantial evidence.
101	101	SECTION 4. Section 824.402, Government Code, is amended by
102	102	adding Subsection (a-1) to read as follows:
103	103	(a-1) In determining under Subsection (a)(4) whether to
104	104	reduce the optional retirement annuity amount because of early
105	105	retirement and in determining the amount of that reduction, if
106	106	applicable, the retirement system shall make the determination as
107	107	if the member had retired with an additional five years of service
108	108	credit on the last day of the month preceding the month in which the
109	109	member dies. The additional five years of service credit used in
110	110	making a determination under this subsection may not be used to
111	111	determine the amount of the benefit under Section 824.203 or
112	112	whether the benefit under this subsection is authorized under
113	113	Section 824.401.
114	114	SECTION 5. Section 824.503(f), Government Code, is amended
115	115	to read as follows:
116	116	(f) The designated beneficiary of a disability retiree is
117	117	eligible to receive the benefits described by this section if the
118	118	retiree:
119	119	(1) retires on or after September 1, 1992; and
120	120	(2) dies while receiving disability retirement
121	121	benefits under Section 824.304 [824.304(b)].
122	122	SECTION 6. Section 824.601, Government Code, is amended by
123	123	amending Subsection (b) and adding Subsection (b-2) to read as
124	124	follows:
125	125	(b) Except as provided by Subsection (b-1) or Section
126	126	824.602 and subject to Subsection (b-2), a retiree is not entitled
127	127	to service or disability retirement benefit payments, as
128	128	applicable, for any month in which the retiree is employed in any
129	129	position by a Texas public educational institution.
130	130	(b-2) A retiree is considered to be employed by a Texas
131	131	public educational institution for purposes of Subsection (b) if
132	132	the retiree performs duties or provides services for or on behalf of
133	133	the institution that an employee of the institution would otherwise
134	134	perform or provide and:
135	135	(1) the retiree waives, defers, or forgoes
136	136	compensation from the institution for the performance of the duties
137	137	or provision of the services at any time during the 12 consecutive
138	138	calendar months after the retiree's effective date of retirement,
139	139	notwithstanding any other law, including Sections 824.602(a)(1),
140	140	(a)(2), and (a)(4);
141	141	(2) the retiree performs the duties or provides the
142	142	services for or on behalf of the institution as an independent
143	143	contractor at any time during the 12 consecutive calendar months
144	144	after the retiree's effective date of retirement; or
145	145	(3) the retiree, as a volunteer without compensation,
146	146	performs the same duties or provides the same services for an
147	147	institution that the retiree performed or provided immediately
148	148	before retiring and the retiree has an agreement to perform those
149	149	duties or provide those services after the 12 consecutive calendar
150	150	months after the retiree's effective date of retirement.
151	151	SECTION 7. Section 825.208(b), Government Code, is amended
152	152	to read as follows:
153	153	(b) The retirement system is exempt from Section 651.002,
154	154	Chapter 660, and Subchapter K, Chapter 659, to the extent the board
155	155	of trustees determines an exemption is necessary for the
156	156	performance of fiduciary duties.
157	157	SECTION 8. Section 825.212, Government Code, is amended by
158	158	adding Subsection (d) to read as follows:
159	159	(d) Notwithstanding any other law, all personal financial
160	160	disclosures made by employees of the retirement system under this
161	161	section, including a rule or policy adopted under this section, are
162	162	confidential and excepted from the requirements of Section 552.021.
163	163	SECTION 9. Section 825.3011(b), Government Code, is amended
164	164	to read as follows:
165	165	(b) Chapter 551 does not require the board of trustees to
166	166	confer with one or more employees, consultants, or legal counsel of
167	167	the retirement system or with a third party, including
168	168	representatives of an issuer of restricted securities or a private
169	169	investment fund, in an open meeting if the only purpose of the
170	170	conference is to receive information from or question the
171	171	employees, consultants, or legal counsel of the retirement system
172	172	or the third party relating to:
173	173	(1) [an] investment transactions or [a] potential
174	174	investment transactions if, before conducting the closed meeting, a
175	175	majority of [by] the board of trustees in an open meeting vote that
176	176	deliberating or conferring in an open meeting would have a
177	177	detrimental effect on the position of the retirement system in
178	178	negotiations with third parties or put the retirement system at a
179	179	competitive disadvantage in the market [in a private investment
180	180	fund]; or
181	181	(2) the purchase, holding, or disposal of restricted
182	182	securities or a private investment fund's investment in restricted
183	183	securities if, under Section 552.143, the information discussed
184	184	would be confidential and excepted from the requirements of Section
185	185	552.021 if the information was included in the records of a
186	186	governmental body.
187	187	SECTION 10. Section 825.306, Government Code, is amended to
188	188	read as follows:
189	189	Sec. 825.306. CREDITING SYSTEM ASSETS. (a) The assets of
190	190	the retirement system shall be maintained and reported in a manner
191	191	that reflects the source of the assets or the purpose for which the
192	192	assets are held, using appropriate ledgers and subledgers, in
193	193	accordance with generally accepted accounting principles
194	194	prescribed by the Governmental Accounting Standards Board or its
195	195	successor. In addition, the maintenance and reporting of the
196	196	assets must be in compliance with applicable tax law and consistent
197	197	with any fiduciary duty owed with respect to the trust. In the
198	198	alternative, the assets may be credited, according to the purpose
199	199	for which they are held, to one of the following accounts:
200	200	(1) member savings account;
201	201	(2) state contribution account;
202	202	(3) retired reserve account;
203	203	(4) interest account;
204	204	(5) expense account; or
205	205	(6) deferred retirement option account.
206	206	(b) Notwithstanding any other law, a requirement to deposit
207	207	in or transfer assets from one of the accounts described under
208	208	Subsection (a) is satisfied by maintaining and reporting the assets
209	209	in accordance with that subsection.
210	210	SECTION 11. Section 825.408, Government Code, is amended by
211	211	amending Subsection (a) and adding Subsections (a-1) and (a-2) to
212	212	read as follows:
213	213	(a) Except as provided by Subsection (a-1), an [An] employer
214	214	that fails to remit, before the seventh day after the last day of a
215	215	month, all member and employer deposits and documentation of the
216	216	deposits required by this subchapter to be remitted by the employer
217	217	for the month shall pay to the retirement system, in addition to the
218	218	deposits, interest on the unpaid [or undocumented] amounts at an
219	219	annual rate compounded monthly and a late fee in an amount
220	220	determined by the retirement system for each day after the deadline
221	221	imposed by this subsection that the employer fails to submit the
222	222	documentation of the deposits. The rate of interest is the rate
223	223	established under Section 825.313(b)(1), plus two percent.
224	224	Interest and late fees required under this section are [is]
225	225	creditable to the interest account. On request, the retirement
226	226	system may grant a waiver of the deadline imposed by this subsection
227	227	based on an employer's financial or technological resources.
228	228	(a-1) This subsection applies only to an employer who
229	229	reports the employment of a retiree to the retirement system.
230	230	Subject to Subsection (a-2), an employer that fails to remit,
231	231	before the 11th day after the last day of a calendar month in which a
232	232	retiree is employed, the employer deposits required by Section
233	233	825.4092(b), documentation of those deposits as required by this
234	234	section, and the certified statement of employment required by
235	235	Section 824.6022 shall pay to the retirement system, in addition to
236	236	the deposits, interest on the unpaid amounts at the annual rate
237	237	established under Subsection (a), compounded monthly, and a late
238	238	fee for each day after the deadline imposed by this subsection that
239	239	the employer fails to file the documentation of the deposits and the
240	240	certified statement of employment.
241	241	(a-2) If a retiree described by Subsection (a-1) performs
242	242	work in the month of August, the employer must remit the employer
243	243	deposits, documentation of those deposits, and the certified
244	244	statement of employment not later than the seventh day of
245	245	September.
246	246	SECTION 12. Section 825.410(a), Government Code, is amended
247	247	to read as follows:
248	248	(a) Payments to establish special service credit as
249	249	authorized under this subtitle, other than service credit that may
250	250	only be determined and paid for at the time of retirement such as
251	251	unused leave as authorized by Section 823.403, may be made in a lump
252	252	sum by a monthly payroll deduction in an amount not less than
253	253	one-twelfth of the contribution required to establish at least one
254	254	year of service credit, or in equal monthly installments over a
255	255	period not to exceed the lesser of the number of years of credit to
256	256	be purchased or 60 months. Installment and payroll deduction
257	257	payments are due on the first day of each calendar month in the
258	258	payment period. If an installment or payroll deduction payment is
259	259	not made in full within 60 days after the due date, the retirement
260	260	system may refund all installment or payroll deduction payments
261	261	less fees paid on the lump sum due when installment or payroll
262	262	deduction payments began. Partial payment of an installment or
263	263	payroll deduction payment may be treated as nonpayment. A check
264	264	returned for insufficient funds or a closed account shall be
265	265	treated as nonpayment. When two or more consecutive monthly
266	266	payments have a returned check, a refund may be made. [If the
267	267	retirement system refunds payments pursuant to this subsection, the
268	268	member is not permitted to use the installment method of payment or
269	269	the payroll deduction method, as applicable, for the same service
270	270	for three years after the date of the refund. A member who requests
271	271	and receives a refund of installment or payroll deduction payments
272	272	also is not permitted to use the same method of payment for the same
273	273	service for three years after the date of the refund.]
274	274	SECTION 13. Section 825.519, Government Code, is amended to
275	275	read as follows:
276	276	Sec. 825.519. ELECTRONIC INFORMATION. (a) The retirement
277	277	system may provide confidential information electronically to
278	278	members or other participants or employers and receive information
279	279	electronically from those persons, including by use of an
280	280	electronic signature or certification in a form acceptable to the
281	281	retirement system. An unintentional disclosure to, or unauthorized
282	282	access by, a third party related to the transmission or receipt of
283	283	information under this section is not a violation by the retirement
284	284	system of any law, including a rule relating to the protection of
285	285	confidential information.
286	286	(b) The retirement system may provide to a member or retiree
287	287	any information that is required to be provided, distributed, or
288	288	furnished under Section 802.106(a), (b), (d), or (e) by:
289	289	(1) sending the information to an e-mail address the
290	290	member or retiree furnished to an employer covered by the
291	291	retirement system; or
292	292	(2) directing the member or retiree through a written
293	293	notice or e-mail to an Internet website address to access the
294	294	information.
295	295	(c) The retirement system may provide to an active member of
296	296	the retirement system the information that is required to be
297	297	provided under Section 802.106(c) by sending the information to an
298	298	e-mail address specified by the member for the purpose of receiving
299	299	confidential information.
300	300	SECTION 14. Section 1575.402(a), Insurance Code, is amended
301	301	to read as follows:
302	302	(a) The Retirees Advisory Committee is composed of the
303	303	following seven [nine] members appointed by the trustee:
304	304	(1) one member who is an active school administrator;
305	305	(2) one member who is a retired school administrator;
306	306	(3) two members who are active teachers; and
307	307	(4) three members who are retired teachers[;
308	308	[(5) one member who is an active member of the
309	309	auxiliary personnel of a school district; and
310	310	[(6) one member who is a retired member of the
311	311	auxiliary personnel of a school district].
312	312	SECTION 15. Section 1575.403(b), Insurance Code, is amended
313	313	to read as follows:
314	314	(b) The [Five members' terms, including the] terms of the
315	315	active school administrator, one active teacher, and two retired
316	316	teachers[, and the retired member of the auxiliary personnel,]
317	317	expire February 1, 2002, and every fourth year after that date.
318	318	SECTION 16. Section 824.402, Government Code, as amended by
319	319	this Act, applies only to a member of the Teacher Retirement System
320	320	of Texas who retires on or after the effective date of this Act.
321	321	SECTION 17. Section 824.601, Government Code, as amended by
322	322	this Act, applies to a retiree of the Teacher Retirement System of
323	323	Texas regardless of whether the person retired from employment
324	324	before, on, or after the effective date of this Act.
325	325	SECTION 18. The changes in law made by this Act to Sections
326	326	1575.402 and 1575.403, Insurance Code, regarding the composition
327	327	and terms of the Retirees Advisory Committee, do not affect the
328	328	entitlement of a member serving on the committee immediately before
329	329	the effective date of this Act to continue to serve as a member of
330	330	the committee for the remainder of the member's term. As the terms
331	331	of committee members expire or as vacancies occur on the board, the
332	332	Teacher Retirement System of Texas shall appoint members to the
333	333	committee as necessary to comply with Sections 1575.402 and
334	334	1575.403, Insurance Code, as amended by this Act.
335	335	SECTION 19. This Act takes effect September 1, 2017, except
336	336	that Section 825.212, Government Code, as amended by this Act,
337	337	takes effect immediately if this Act receives a vote of two-thirds
338	338	of all the members elected to each house, as provided by Section 39,
339	339	Article III, Texas Constitution. If this Act does not receive the
340	340	vote necessary for immediate effect, Section 825.212, Government
341	341	Code, as amended by this Act, takes effect September 1, 2017.