Texas 2017 - 85th Regular

Texas Senate Bill SB1663 Compare Versions

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Version 2 (New)

Old	New		Differences
1		-	S.B. No. 1663
	1	+	85R28142 TSR/CAE-F
	2	+	By: Huffman S.B. No. 1663
	3	+	(Flynn)
	4	+	Substitute the following for S.B. No. 1663: No.
2	5
3	6
	7	+	A BILL TO BE ENTITLED
4	8		AN ACT
5	9		relating to contributions to, benefits from, late fees imposed by,
6	10		and the administration of systems and programs administered by the
7	11		Teacher Retirement System of Texas.
8	12		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	13		SECTION 1. Sections 42.260(b) and (c), Education Code, are
10	14		amended to read as follows:
11	15		(b) The [For each year, the commissioner shall certify to
12	16		each school district or participating charter school the] amount of
13	17		additional funds to which each school district or participating
14	18		charter school [the district or school] is entitled due to the
15	19		increases in formula funding [increase] made by H.B. No. 3343, Acts
16	20		of the 77th Legislature, Regular Session, 2001, and any subsequent
17	21		legislation amending the provisions amended by that Act that
18	22		increase formula funding under Chapter 41 and this chapter to
19	23		school districts and charter schools is available for purposes of
20	24		Subsection (c) [to:
21	25		[(1) the equalized wealth level under Section 41.002;
22	26		or
23	27		[(2) the guaranteed level of state and local funds per
24	28		weighted student per cent of tax effort under Section 42.302].
25	29		(c) Notwithstanding any other provision of this code, a
26	30		school district or participating charter school may use the sum of
27	31		the following amounts [amount] of funds only to pay contributions
28	32		under a group health coverage plan for district or school
29	33		employees:
30	34		(1) [an amount equal to 75 percent of the amount
31	35		certified for the district or school under Subsection (b); or
32	36		[(2) if the following amount is less than the amount
33	37		specified by Subdivision (1), the sum of:
34	38		[(A)] the amount determined by multiplying the
35	39		amount of $900 or the amount specified in the General
36	40		Appropriations Act for that year for purposes of the state
37	41		contribution under Section 1579.251 [9, Article 3.50-7], Insurance
38	42		Code, by the number of district or school employees who participate
39	43		in a group health coverage plan provided by or through the district
40	44		or school; and
41	45		(2) [(B)] the difference between the amount necessary
42	46		for the district or school to comply with Section 1581.052 [3,
43	47		Article 3.50-9], Insurance Code, for the school year and the amount
44	48		the district or school is required to use to provide health coverage
45	49		under Section 1581.051, Insurance Code, [2 of that article] for
46	50		that year.
47	51		SECTION 2. Section 822.002, Government Code, is amended to
48	52		read as follows:
49	53		Sec. 822.002. EXCEPTIONS TO MEMBERSHIP REQUIREMENT.
50	54		(a) An employee of the public school system is not permitted to be
51	55		a member of the retirement system if the employee:
52	56		(1) is eligible and elects to participate in the
53	57		optional retirement program under Chapter 830; or
54	58		(2) [is solely employed by a public institution of
55	59		higher education that as a condition of employment requires the
56	60		employee to be enrolled as a student in the institution; or
57	61		[(3)] has retired under the retirement system and has
58	62		not been reinstated to membership pursuant to Section 824.005 or
59	63		824.307.
60	64		(b) An employee of a public institution of higher education
61	65		who is required to be enrolled as a student in the institution as a
62	66		condition of employment is not permitted to be a member of the
63	67		retirement system based on that student employment, and
64	68		compensation paid to the employee for work performed as a student
65	69		employee is not compensation subject to report and deduction for
66	70		member contributions or to credit in benefit computations under
67	71		Section 822.201.
68	72		SECTION 3. Section 824.1012, Government Code, is amended by
69	73		amending Subsection (a) and adding Subsection (a-1) to read as
70	74		follows:
71	75		(a) As an exception to Section 824.101(c), a retiree who
72	76		selected an optional service retirement annuity under Section
73	77		824.204(c)(1), (c)(2), or (c)(5) or an optional disability
74	78		retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
75	79		and who has received at least one payment under the plan selected
76	80		may change the optional annuity selection made by the retiree to a
77	81		standard service or disability retirement annuity as provided for
78	82		in this section. If the beneficiary of the optional annuity was
79	83		[is] the spouse [or former spouse] of the retiree when the retiree
80	84		designated the spouse as beneficiary of the optional annuity, to
81	85		change from the optional annuity to a standard retirement annuity
82	86		under this subsection, the spouse or former spouse, as applicable,
83	87		who was designated[,] the beneficiary of the optional annuity must
84	88		sign a notarized consent to the change[,] or a court with
85	89		jurisdiction over the marriage of [in a divorce proceeding
86	90		involving] the retiree and beneficiary must approve or order the
87	91		change [in the divorce decree or acceptance of a property
88	92		settlement]. The change in plan selection takes effect when the
89	93		retirement system receives the request to change the plan, provided
90	94		the signed consent form or court order, as applicable, is
91	95		subsequently received by the retirement system [it].
92	96		(a-1) The executive director or the executive director's
93	97		designee has exclusive authority to determine whether the language
94	98		in a court order described by Subsection (a) is sufficient to
95	99		indicate that the court has approved or ordered the change in plan
96	100		selection. A determination by the executive director or the
97	101		executive director's designee under this subsection may be appealed
98	102		only to the board of trustees, except that the board by rule may
99	103		waive the requirement that an appeal be to the board. An appeal to
100	104		the board is a contested case under Chapter 2001. The standard of
101	105		review of an appeal brought under this subsection is by substantial
102	106		evidence.
103	107		SECTION 4. Section 824.1013, Government Code, is amended by
104	108		amending Subsections (b) and (c-1) and adding Subsection (c-2) to
105	109		read as follows:
106	110		(b) If the beneficiary designated at the time of the
107	111		retiree's retirement is the spouse of the retiree at the time of the
108	112		designation:
109	113		(1) the spouse must give written, notarized consent to
110	114		the change;
111	115		(2) if the parties divorce after the designation, the
112	116		former spouse who was designated beneficiary must give written,
113	117		notarized consent to the change; or
114	118		(3) a court with jurisdiction over the marriage must
115	119		approve or order [have ordered] the change.
116	120		(c-1) Notwithstanding Subsection (c), a beneficiary
117	121		designated under this section is entitled on the retiree's death to
118	122		receive monthly payments of the survivor's portion of the retiree's
119	123		optional retirement annuity for the remainder of the beneficiary's
120	124		life if the beneficiary designated at the time of the retiree's
121	125		retirement is a trust and the beneficiary designated under this
122	126		section is:
123	127		(1) the sole beneficiary of that trust; or
124	128		(2) an individual who at the time of the retiree's
125	129		death is the sole beneficiary of that trust.
126	130		(c-2) The executive director or the executive director's
127	131		designee has exclusive authority to determine whether the language
128	132		in a court order described by Subsection (b) is sufficient to
129	133		indicate that the court has approved or ordered the change in the
130	134		designated beneficiary. A determination by the executive director
131	135		or the executive director's designee under this subsection may be
132	136		appealed only to the board of trustees, except that the board by
133	137		rule may waive the requirement that an appeal be to the board. An
134	138		appeal to the board is a contested case under Chapter 2001. The
135	139		standard of review of an appeal brought under this subsection is by
136	140		substantial evidence.
137	141		SECTION 5. Section 824.402, Government Code, is amended by
138	142		adding Subsection (a-1) to read as follows:
139	143		(a-1) In determining under Subsection (a)(4) whether to
140	144		reduce the optional retirement annuity amount because of early
141	145		retirement and in determining the amount of that reduction, if
142	146		applicable, the retirement system shall make the determination as
143	147		if the member had retired with an additional five years of service
144	148		credit on the last day of the month preceding the month in which the
145	149		member dies. The additional five years of service credit used in
146	150		making a determination under this subsection may not be used to
147	151		determine the amount of the benefit under Section 824.203 or
148	152		whether the benefit under this subsection is authorized under
149	153		Section 824.401.
150	154		SECTION 6. Section 824.503(f), Government Code, is amended
151	155		to read as follows:
152	156		(f) The designated beneficiary of a disability retiree is
153	157		eligible to receive the benefits described by this section if the
154	158		retiree:
155	159		(1) retires on or after September 1, 1992; and
156	160		(2) dies while receiving disability retirement
157	161		benefits under Section 824.304 [824.304(b)].
158	162		SECTION 7. Section 824.601, Government Code, is amended by
159	163		amending Subsection (b) and adding Subsection (b-2) to read as
160	164		follows:
161	165		(b) Except as provided by Subsection (b-1) or Section
162	166		824.602 and subject to Subsection (b-2), a retiree is not entitled
163	167		to service or disability retirement benefit payments, as
164	168		applicable, for any month in which the retiree is employed in any
165	169		position by a Texas public educational institution.
166	170		(b-2) A retiree is considered to be employed by a Texas
167	171		public educational institution for purposes of Subsection (b) if
168	172		the retiree performs duties or provides services for or on behalf of
169	173		the institution that an employee of the institution would otherwise
170	174		perform or provide and:
171	175		(1) the retiree waives, defers, or forgoes
172	176		compensation from the institution for the performance of the duties
173	177		or provision of the services at any time during the 12 consecutive
174	178		calendar months after the retiree's effective date of retirement,
175	179		notwithstanding any other law, including Sections 824.602(a)(1),
176	180		(a)(2), and (a)(4);
177	181		(2) the retiree performs the duties or provides the
178	182		services for or on behalf of the institution as an independent
179	183		contractor at any time during the 12 consecutive calendar months
180	184		after the retiree's effective date of retirement; or
181	185		(3) the retiree, as a volunteer without compensation,
182	186		performs the same duties or provides the same services for an
183	187		institution that the retiree performed or provided immediately
184	188		before retiring and the retiree has an agreement to perform those
185	189		duties or provide those services after the 12 consecutive calendar
186	190		months after the retiree's effective date of retirement.
187		-	SECTION 8. SUNSET PROVISION. Section 825.006, Government
188		-	Code, is amended to read as follows:
189		-	Sec. 825.006. SUNSET PROVISION. The board of trustees of the
190		-	Teacher Retirement System of Texas is subject to review under
191		-	Chapter 325 (Texas Sunset Act), but is not abolished under that
192		-	chapter. The board shall be reviewed during the period in which
193		-	state agencies abolished in 2025 [2019], and every 12th year after
194		-	that year, are reviewed.
195		-	SECTION 9. Section 825.208(b), Government Code, is amended
	191	+	SECTION 8. Section 825.208(b), Government Code, is amended
196	192		to read as follows:
197	193		(b) The retirement system is exempt from Section 651.002,
198	194		Chapter 660, and Subchapter K, Chapter 659, to the extent the board
199	195		of trustees determines an exemption is necessary for the
200	196		performance of fiduciary duties.
201		-	SECTION 10. Section 825.212, Government Code, is amended by
	197	+	SECTION 9. Section 825.212, Government Code, is amended by
202	198		adding Subsection (d) to read as follows:
203	199		(d) Notwithstanding any other law, all personal financial
204	200		disclosures made by employees of the retirement system under this
205	201		section, including a rule or policy adopted under this section, are
206	202		confidential and excepted from the requirements of Section 552.021.
207		-	SECTION 11. Section 825.3011(b), Government Code, is
	203	+	SECTION 10. Section 825.3011(b), Government Code, is
208	204		amended to read as follows:
209	205		(b) Chapter 551 does not require the board of trustees to
210	206		confer with one or more employees, consultants, or legal counsel of
211	207		the retirement system or with a third party, including
212	208		representatives of an issuer of restricted securities or a private
213	209		investment fund, in an open meeting if the only purpose of the
214	210		conference is to receive information from or question the
215	211		employees, consultants, or legal counsel of the retirement system
216	212		or the third party relating to:
217	213		(1) [an] investment transactions or [a] potential
218	214		investment transactions if, before conducting the closed meeting, a
219	215		majority of [by] the board of trustees in an open meeting vote that
220	216		deliberating or conferring in an open meeting would have a
221	217		detrimental effect on the position of the retirement system in
222	218		negotiations with third parties or put the retirement system at a
223	219		competitive disadvantage in the market [in a private investment
224	220		fund]; or
225	221		(2) the purchase, holding, or disposal of restricted
226	222		securities or a private investment fund's investment in restricted
227	223		securities if, under Section 552.143, the information discussed
228	224		would be confidential and excepted from the requirements of Section
229	225		552.021 if the information was included in the records of a
230	226		governmental body.
231		-	SECTION 12. Section 825.306, Government Code, is amended to
	227	+	SECTION 11. Section 825.306, Government Code, is amended to
232	228		read as follows:
233	229		Sec. 825.306. CREDITING SYSTEM ASSETS. (a) The assets of
234	230		the retirement system shall be maintained and reported in a manner
235	231		that reflects the source of the assets or the purpose for which the
236	232		assets are held, using appropriate ledgers and subledgers, in
237	233		accordance with generally accepted accounting principles
238	234		prescribed by the Governmental Accounting Standards Board or its
239	235		successor. In addition, the maintenance and reporting of the
240	236		assets must be in compliance with applicable tax law and consistent
241	237		with any fiduciary duty owed with respect to the trust. In the
242	238		alternative, the assets may be credited, according to the purpose
243	239		for which they are held, to one of the following accounts:
244	240		(1) member savings account;
245	241		(2) state contribution account;
246	242		(3) retired reserve account;
247	243		(4) interest account;
248	244		(5) expense account; or
249	245		(6) deferred retirement option account.
250	246		(b) Notwithstanding any other law, a requirement to deposit
251	247		in or transfer assets from one of the accounts described under
252	248		Subsection (a) is satisfied by maintaining and reporting the assets
253	249		in accordance with that subsection.
254		-	SECTION 13. Section 825.408, Government Code, is amended by
	250	+	SECTION 12. Section 825.408, Government Code, is amended by
255	251		amending Subsection (a) and adding Subsections (a-1) and (a-2) to
256	252		read as follows:
257	253		(a) Except as provided by Subsection (a-1), an [An] employer
258	254		that fails to remit, before the seventh day after the last day of a
259	255		month, all member and employer deposits and documentation of the
260	256		deposits required by this subchapter to be remitted by the employer
261	257		for the month shall pay to the retirement system, in addition to the
262	258		deposits, interest on the unpaid [or undocumented] amounts at an
263	259		annual rate compounded monthly and a late fee in an amount
264	260		determined by the retirement system that is based on the size of the
265	261		employer and may not exceed $1,000 for each business day after the
266	262		deadline imposed by this subsection that the employer fails to
267	263		submit the documentation of the deposits. The cumulative amount of
268	264		late fees assessed against an employer under this subsection may
269	265		not exceed $25,000 per reporting period. The rate of interest is
270	266		the rate established under Section 825.313(b)(1), plus two percent.
271	267		Interest and late fees required under this section are [is]
272	268		creditable to the interest account. On request, the retirement
273	269		system may grant a waiver of the deadline imposed by this subsection
274	270		based on an employer's financial or technological resources. The
275	271		retirement system may establish a process for filing an appeal to
276	272		reduce or waive a late fee imposed under this subsection.
277	273		(a-1) This subsection applies only to an employer who
278	274		reports the employment of a retiree to the retirement system.
279	275		Subject to Subsection (a-2), an employer that fails to remit,
280	276		before the 11th day after the last day of a calendar month in which a
281	277		retiree is employed, the employer deposits required by Section
282	278		825.4092(b), documentation of those deposits as required by this
283	279		section, and the certified statement of employment required by
284	280		Section 824.6022 shall pay to the retirement system, in addition to
285	281		the deposits, interest on the unpaid amounts at the annual rate
286	282		established under Subsection (a), compounded monthly, and a late
287	283		fee in an amount determined by the retirement system for each
288	284		business day after the deadline imposed by this subsection that the
289	285		employer fails to file the documentation of the deposits and the
290	286		certified statement of employment.
291	287		(a-2) If a retiree described by Subsection (a-1) performs
292	288		work in the month of August, the employer must remit the employer
293	289		deposits, documentation of those deposits, and the certified
294	290		statement of employment before the seventh day of September.
295		-	SECTION 14. Section 825.410(a), Government Code, is amended
	291	+	SECTION 13. Section 825.410(a), Government Code, is amended
296	292		to read as follows:
297	293		(a) Payments to establish special service credit as
298	294		authorized under this subtitle, other than service credit that may
299	295		only be determined and paid for at the time of retirement such as
300	296		unused leave as authorized by Section 823.403, may be made in a lump
301	297		sum by a monthly payroll deduction in an amount not less than
302	298		one-twelfth of the contribution required to establish at least one
303	299		year of service credit, or in equal monthly installments over a
304	300		period not to exceed the lesser of the number of years of credit to
305	301		be purchased or 60 months. Installment and payroll deduction
306	302		payments are due on the first day of each calendar month in the
307	303		payment period. If an installment or payroll deduction payment is
308	304		not made in full within 60 days after the due date, the retirement
309	305		system may refund all installment or payroll deduction payments
310	306		less fees paid on the lump sum due when installment or payroll
311	307		deduction payments began. Partial payment of an installment or
312	308		payroll deduction payment may be treated as nonpayment. A check
313	309		returned for insufficient funds or a closed account shall be
314	310		treated as nonpayment. When two or more consecutive monthly
315	311		payments have a returned check, a refund may be made. [If the
316	312		retirement system refunds payments pursuant to this subsection, the
317	313		member is not permitted to use the installment method of payment or
318	314		the payroll deduction method, as applicable, for the same service
319	315		for three years after the date of the refund. A member who requests
320	316		and receives a refund of installment or payroll deduction payments
321	317		also is not permitted to use the same method of payment for the same
322	318		service for three years after the date of the refund.]
323		-	SECTION 15. Section 825.519, Government Code, is amended to
	319	+	SECTION 14. Section 825.519, Government Code, is amended to
324	320		read as follows:
325	321		Sec. 825.519. ELECTRONIC INFORMATION. (a) The retirement
326	322		system may provide confidential information electronically to
327	323		members or other participants or employers and receive information
328	324		electronically from those persons, including by use of an
329	325		electronic signature or certification in a form acceptable to the
330	326		retirement system. An unintentional disclosure to, or unauthorized
331	327		access by, a third party related to the transmission or receipt of
332	328		information under this section is not a violation by the retirement
333	329		system of any law, including a rule relating to the protection of
334	330		confidential information.
335	331		(b) The retirement system may provide to a member or retiree
336	332		any information that is required to be provided, distributed, or
337	333		furnished under Section 802.106(a), (b), (d), or (e) by:
338	334		(1) sending the information to an e-mail address of
339	335		the member or retiree furnished to the retirement system by an
340	336		employer covered by the retirement system; or
341	337		(2) directing the member or retiree through a written
342	338		notice or e-mail to an Internet website address to access the
343	339		information.
344	340		(c) The retirement system may provide to an active member of
345	341		the retirement system the information that is required to be
346	342		provided under Section 802.106(c) by sending the information to an
347	343		e-mail address specified by the member for the purpose of receiving
348	344		confidential information.
349		-	SECTION 16. Section 1575.402(a), Insurance Code, is amended
	345	+	SECTION 15. Section 1575.402(a), Insurance Code, is amended
350	346		to read as follows:
351	347		(a) The Retirees Advisory Committee is composed of the
352	348		following seven [nine] members appointed by the trustee:
353	349		(1) one member who is an active school administrator;
354	350		(2) one member who is a retired school administrator;
355	351		(3) two members who are active teachers; and
356	352		(4) three members who are retired teachers[;
357	353		[(5) one member who is an active member of the
358	354		auxiliary personnel of a school district; and
359	355		[(6) one member who is a retired member of the
360	356		auxiliary personnel of a school district].
361		-	SECTION 17. Section 1575.403(b), Insurance Code, is amended
	357	+	SECTION 16. Section 1575.403(b), Insurance Code, is amended
362	358		to read as follows:
363	359		(b) The [Five members' terms, including the] terms of the
364	360		active school administrator, one active teacher, and two retired
365	361		teachers[, and the retired member of the auxiliary personnel,]
366	362		expire February 1, 2002, and every fourth year after that date.
367		-	SECTION 18. Section 824.402, Government Code, as amended by
	363	+	SECTION 17. Section 824.402, Government Code, as amended by
368	364		this Act, applies only to benefits payable on the death of a member
369	365		of the Teacher Retirement System of Texas who dies:
370	366		(1) on or after the effective date of this Act; or
371	367		(2) before the effective date of this Act if the
372	368		benefits payable on the death of the member have not commenced on
373	369		the effective date of this Act.
374		-	SECTION 19. Section 824.601, Government Code, as amended by
	370	+	SECTION 18. Section 824.601, Government Code, as amended by
375	371		this Act, applies to a retiree of the Teacher Retirement System of
376	372		Texas regardless of whether the person retired from employment
377	373		before, on, or after the effective date of this Act.
378		-	SECTION 20. The changes in law made by this Act to Sections
	374	+	SECTION 19. The changes in law made by this Act to Sections
379	375		1575.402 and 1575.403, Insurance Code, regarding the composition
380	376		and terms of the Retirees Advisory Committee, do not affect the
381	377		entitlement of a member serving on the committee immediately before
382	378		the effective date of this Act to continue to serve as a member of
383	379		the committee for the remainder of the member's term. As the terms
384	380		of committee members expire or as vacancies occur on the committee,
385	381		the Teacher Retirement System of Texas shall appoint members to the
386	382		committee as necessary to comply with Sections 1575.402 and
387	383		1575.403, Insurance Code, as amended by this Act.
388		-	SECTION 21. This Act takes effect September 1, 2017, except
	384	+	SECTION 20. This Act takes effect September 1, 2017, except
389	385		that Section 825.212, Government Code, as amended by this Act,
390	386		takes effect immediately if this Act receives a vote of two-thirds
391	387		of all the members elected to each house, as provided by Section 39,
392	388		Article III, Texas Constitution. If this Act does not receive the
393	389		vote necessary for immediate effect, Section 825.212, Government
394	390		Code, as amended by this Act, takes effect September 1, 2017.
395		-	______________________________ ______________________________
396		-	President of the Senate Speaker of the House
397		-	I hereby certify that S.B. No. 1663 passed the Senate on
398		-	April 19, 2017, by the following vote: Yeas 31, Nays 0; and that
399		-	the Senate concurred in House amendments on May 28, 2017, by the
400		-	following vote: Yeas 31, Nays 0.
401		-	______________________________
402		-	Secretary of the Senate
403		-	I hereby certify that S.B. No. 1663 passed the House, with
404		-	amendments, on May 24, 2017, by the following vote: Yeas 144,
405		-	Nays 0, three present not voting.
406		-	______________________________
407		-	Chief Clerk of the House
408		-	Approved:
409		-	______________________________
410		-	Date
411		-	______________________________
412		-	Governor