Texas 2017 - 85th Regular

Texas Senate Bill SB1664 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 1664
	1	+	By: Huffman S.B. No. 1664
	2	+	(Flynn)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to contributions to, benefits from, membership in, and the
6	8		administration of systems and programs administered by the Teacher
7	9		Retirement System of Texas.
8	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	11		SECTION 1. Sections 22.004(b) and (d), Education Code, are
10	12		amended to read as follows:
11	13		(b) A district that does not participate in the program
12	14		described by Subsection (a) shall make available to its employees
13	15		group health coverage provided by a risk pool established by one or
14	16		more school districts under Chapter 172, Local Government Code, or
15	17		under a policy of insurance or group contract issued by an insurer,
16	18		a company subject to Chapter 842, Insurance Code, or a health
17	19		maintenance organization under Chapter 843, Insurance Code. The
18	20		coverage must meet the substantive coverage requirements of Chapter
19	21		1251, Subchapter A, Chapter 1364, and Subchapter A, Chapter 1366,
20	22		Insurance Code, and any other law applicable to group health
21	23		insurance policies or contracts issued in this state. The coverage
22	24		must include major medical treatment but may exclude experimental
23	25		procedures. In this subsection, "major medical treatment" means a
24	26		medical, surgical, or diagnostic procedure for illness or injury.
25	27		The coverage may include managed care or preventive care and must be
26	28		comparable to the basic health coverage provided under Chapter
27	29		1551, Insurance Code. The [board of trustees of the Teacher
28	30		Retirement System of Texas shall adopt rules to determine whether a
29	31		school district's group health coverage is comparable to the basic
30	32		health coverage specified by this subsection. The rules must
31	33		provide for consideration of the] following factors shall be
32	34		considered [concerning the district's coverage] in determining
33	35		whether the district's coverage is comparable to the basic health
34	36		coverage specified by this subsection:
35	37		(1) the deductible amount for service provided inside
36	38		and outside of the network;
37	39		(2) the coinsurance percentages for service provided
38	40		inside and outside of the network;
39	41		(3) the maximum amount of coinsurance payments a
40	42		covered person is required to pay;
41	43		(4) the amount of the copayment for an office visit;
42	44		(5) the schedule of benefits and the scope of
43	45		coverage;
44	46		(6) the lifetime maximum benefit amount; and
45	47		(7) verification that the coverage is issued by a
46	48		provider licensed to do business in this state by the Texas
47	49		Department of Insurance or is provided by a risk pool authorized
48	50		under Chapter 172, Local Government Code, or that a district is
49	51		capable of covering the assumed liabilities in the case of coverage
50	52		provided through district self-insurance.
51	53		(d) Each district [shall report the district's compliance
52	54		with this section to the executive director of the Teacher
53	55		Retirement System of Texas not later than March 1 of each
54	56		even-numbered year in the manner required by the board of trustees
55	57		of the Teacher Retirement System of Texas. For a district] that
56	58		does not participate in the program described by Subsection (a)
57	59		shall prepare a report addressing the district's compliance with
58	60		this section. The[, the] report must be available for review,
59	61		together with the policy or contract for the group health coverage
60	62		plan, at the central administrative office of each campus in the
61	63		district and be posted on the district's Internet website if the
62	64		district maintains a website, must be based on the district group
63	65		health coverage plan in effect during the current plan year, and
64	66		must include:
65	67		(1) appropriate documentation of:
66	68		(A) the district's contract for group health
67	69		coverage with a provider licensed to do business in this state by
68	70		the Texas Department of Insurance or a risk pool authorized under
69	71		Chapter 172, Local Government Code; or
70	72		(B) a resolution of the board of trustees of the
71	73		district authorizing a self-insurance plan for district employees
72	74		and of the district's review of district ability to cover the
73	75		liability assumed;
74	76		(2) the schedule of benefits;
75	77		(3) the premium rate sheet, including the amount paid
76	78		by the district and employee;
77	79		(4) the number of employees covered by the health
78	80		coverage plan offered by the district; and
79	81		(5) information concerning the ease of completing the
80	82		report[, as required by the executive director of the Teacher
81	83		Retirement System of Texas; and
82	84		[(6) any other information considered appropriate by
83	85		the executive director of the Teacher Retirement System of Texas].
84	86		SECTION 2. Subchapter A, Chapter 821, Government Code, is
85	87		amended by adding Section 821.0011 to read as follows:
86	88		Sec. 821.0011. DETERMINATION OF EMPLOYEE OR INDEPENDENT
87	89		CONTRACTOR STATUS. In determining whether an individual is an
88	90		employee or independent contractor of an employer, the retirement
89	91		system shall use the test applied under common law and any guidance
90	92		issued by the Internal Revenue Service regarding factors to
91	93		consider when determining an individual's employment status.
92	94		SECTION 3. Section 822.201(b), Government Code, is amended
93	95		to read as follows:
94	96		(b) "Salary and wages" as used in Subsection (a) means:
95	97		(1) normal periodic payments of money for service the
96	98		right to which accrues on a regular basis in proportion to the
97	99		service performed;
98	100		(2) amounts by which the member's salary is reduced
99	101		under a salary reduction agreement authorized by Chapter 610;
100	102		(3) amounts that would otherwise qualify as salary and
101	103		wages under Subdivision (1) but are not received directly by the
102	104		member pursuant to a good faith, voluntary written salary reduction
103	105		agreement in order to finance payments to a deferred compensation
104	106		or tax sheltered annuity program specifically authorized by state
105	107		law or to finance benefit options under a cafeteria plan qualifying
106	108		under Section 125 of the Internal Revenue Code of 1986, if:
107	109		(A) the program or benefit options are made
108	110		available to all employees of the employer; and
109	111		(B) the benefit options in the cafeteria plan are
110	112		limited to one or more options that provide deferred compensation,
111	113		group health and disability insurance, group term life insurance,
112	114		dependent care assistance programs, or group legal services plans;
113	115		(4) performance pay awarded to an employee by a school
114	116		district as part of a total compensation plan approved by the board
115	117		of trustees of the district and meeting the requirements of
116	118		Subsection (e);
117	119		(5) the benefit replacement pay a person earns under
118	120		Subchapter H, Chapter 659, except as provided by Subsection (c);
119	121		(6) stipends paid to teachers in accordance with
120	122		Section 21.410, 21.411, 21.412, or 21.413, Education Code;
121	123		(7) amounts by which the member's salary is reduced or
122	124		that are deducted from the member's salary as authorized by
123	125		Subchapter J, Chapter 659;
124	126		(8) a merit salary increase made under Section 51.962,
125	127		Education Code;
126	128		(9) amounts received under the relevant parts of the
127	129		educator excellence awards program under Subchapter O, Chapter 21,
128	130		Education Code, or a mentoring program under Section 21.458,
129	131		Education Code, that authorize compensation for service;
130	132		(10) salary amounts designated as health care
131	133		supplementation by an employee under Subchapter D, Chapter 22,
132	134		Education Code; and
133	135		(11) to the extent required by Sections 3401(h) and
134	136		414(u)(12) [414(u)(2)], Internal Revenue Code of 1986,
135	137		differential wage payments received by an individual from an
136	138		employer on or after January 1, 2009, while the individual is
137	139		performing qualified military service as defined by Section 414(u),
138	140		Internal Revenue Code of 1986.
139	141		SECTION 4. Section 823.004(a), Government Code, is amended
140	142		to read as follows:
141	143		(a) All credit for military service, out-of-state service,
142	144		developmental leave, work experience in a career or technological
143	145		field, and service transferred to the retirement system under
144	146		Chapter 805 shall be computed on a September 1 through August 31
145	147		school year. Payments for service described by this section must be
146	148		completed:
147	149		(1) not later than two calendar months after the later
148	150		of the member's retirement date or the last day of the month in
149	151		which the member submits a retirement application; and
150	152		(2) before the later of the due date for the member's
151	153		first monthly annuity payment or the date on which the retirement
152	154		system issues the first monthly annuity payment to the member.
153	155		SECTION 5. Section 823.403, Government Code, is amended by
154	156		amending Subsections (c) and (d) and adding Subsection (d-1) to
155	157		read as follows:
156	158		(c) On receipt of a certification under Subsection (b) and
157	159		payment under Subsection (d) of this section, the retirement system
158	160		shall grant any credit to which a retiree who is a subject of the
159	161		certification is entitled. Unless a member declines to purchase
160	162		service credit under this section as provided by Subsection (d-1),
161	163		an annuity payment may not begin until the retirement system is paid
162	164		the full cost of the service credit. [The increase in the annuity
163	165		payment begins with the first payment that becomes due after
164	166		certification and payment.]
165	167		(d) In order to receive credit, the member shall pay to the
166	168		retirement system at the time service credit is granted under this
167	169		section the actuarial present value of the additional standard
168	170		retirement annuity benefits under the option selected by the member
169	171		that would be attributable to the conversion of the unused state
170	172		personal or sick leave into the service credit based on rates and
171	173		tables recommended by the actuary and adopted by the board of
172	174		trustees. Except as provided by this subsection, the retirement
173	175		system must receive the payment for service credit under this
174	176		section not later than the 90th day after the date the retirement
175	177		system issues a cost statement for the purchase of service credit
176	178		under this section. The retirement system may grant a member a
177	179		one-time extension of not more than 30 days to complete the purchase
178	180		of the service credit if the purchase is made by:
179	181		(1) a rollover distribution from another eligible
180	182		retirement plan; or
181	183		(2) a direct trustee-to-trustee transfer of funds
182	184		from:
183	185		(A) an eligible deferred compensation plan
184	186		described by Section 457(b), Internal Revenue Code of 1986, that is
185	187		maintained by an eligible governmental employer; or
186	188		(B) an annuity contract described by Section
187	189		403(b), Internal Revenue Code of 1986, that is purchased under a
188	190		governmental plan.
189	191		(d-1) A member who fails to make the payment described by
190	192		Subsection (d) within the time prescribed by that subsection may:
191	193		(1) decline to purchase service credit under this
192	194		section and maintain the member's effective date of retirement; or
193	195		(2) revoke the member's retirement as provided by
194	196		Section 824.005(a) and select a later retirement date that provides
195	197		the member with sufficient time to complete the purchase of the
196	198		service credit under this section.
197	199		SECTION 6. Sections 824.002(e) and (f), Government Code,
198	200		are amended to read as follows:
199	201		(e) Except as provided by Section 823.403(d), if
200	202		applicable, not [Not] later than two months after the later of a
201	203		member's retirement date or the last day of the month in which the
202	204		member's application for retirement is submitted, and before the
203	205		later of the due date for the first monthly annuity payment or the
204	206		date on which the retirement system issues the first monthly
205	207		annuity payment, a member applying for service retirement may,
206	208		after providing notice to the retirement system, reinstate
207	209		withdrawn contributions, make deposits for military service and
208	210		equivalent membership service, and receive service credit as
209	211		provided by this subtitle.
210	212		(f) An effective retirement date may not be changed after it
211	213		is established except by revocation of retirement under Section
212	214		824.005 [and retirement at a later date].
213	215		SECTION 7. Section 825.307(a), Government Code, is amended
214	216		to read as follows:
215	217		(a) The retirement system shall deposit in a member's
216	218		individual account in the member savings account:
217	219		(1) the amount of contributions to the retirement
218	220		system that is deducted from the member's compensation;
219	221		(2) the portion of a deposit made on or after
220	222		resumption of membership that represents the amount of retirement
221	223		benefits received;
222	224		(3) the portion of a deposit to reinstate service
223	225		credit previously canceled that represents the amount withdrawn or
224	226		refunded;
225	227		(4) the portion of a deposit to establish military
226	228		service credit required by Section 823.302(c);
227	229		(5) the portion of a deposit to establish USERRA
228	230		credit required by Section 823.304(c);
229	231		(6) the portion of a deposit to establish:
230	232		(A) equivalent membership service credit
231	233		required by Section 823.401(d), 823.402(e) [823.402(e)(1) or
232	234		(e)(2)], 823.403(d), [or] 823.404(c), or 823.406(b) or former
233	235		Section 823.405; or
234	236		(B) unreported service credit or compensation
235	237		required by Section 825.403(h); and
236	238		(7) [(6)] interest earned on money in the account as
237	239		provided by Subsections (b) and (c) and Section 825.313(c).
238	240		SECTION 8. Section 825.509(b-1), Government Code, is
239	241		amended to read as follows:
240	242		(b-1) Notwithstanding Subsection (b)(3), with respect to a
241	243		distribution made on or after January 1, 2002, an otherwise
242	244		eligible portion of a rollover distribution that consists of
243	245		after-tax employee contributions not includable in gross income is
244	246		an eligible rollover distribution for purposes of this section.
245	247		The eligible portion may be transferred only:
246	248		(1) to an individual retirement account or annuity
247	249		described by Section 408(a) or (b), Internal Revenue Code of 1986;
248	250		(2) to a qualified plan described by Section 403(a),
249	251		Internal Revenue Code of 1986;
250	252		(3) for distributions occurring on or after January 1,
251	253		2007, to a qualified plan described by Section 401(a), Internal
252	254		Revenue Code of 1986, if the plan agrees to separately account for:
253	255		(A) the amounts transferred and the earnings on
254	256		the amounts transferred; and
255	257		(B) the portion of the distribution that is
256	258		includable in gross income and the portion of the distribution that
257	259		is not includable in gross income; or
258	260		(4) to an annuity contract described by Section
259	261		403(b), Internal Revenue Code of 1986, that agrees to separately
260	262		account for amounts transferred and earnings on amounts
261	263		transferred, including for the portion of the distribution that is
262	264		includable in gross income and the portion of the distribution that
263	265		is not includable in gross income.
264	266		SECTION 9. Section 830.201(h), Government Code, is amended
265	267		to read as follows:
266	268		(h) Before November 2 of each even-numbered year, the Texas
267	269		Higher Education Coordinating Board [board of trustees], in
268	270		coordination with the Legislative Budget Board, shall certify to
269	271		the comptroller for review and adoption an estimate of the amount
270	272		necessary to pay the state's contributions to the retirement system
271	273		for the following biennium. For qualifying employees under
272	274		Subsection (g)(1), the Texas Higher Education Coordinating Board
273	275		[board of trustees] shall include only the amount payable by the
274	276		state under Subsection (g)(1) in determining the amount to be
275	277		certified.
276	278		SECTION 10. This Act takes effect September 1, 2017.
277		-	______________________________ ______________________________
278		-	President of the Senate Speaker of the House
279		-	I hereby certify that S.B. No. 1664 passed the Senate on
280		-	April 19, 2017, by the following vote: Yeas 31, Nays 0.
281		-	______________________________
282		-	Secretary of the Senate
283		-	I hereby certify that S.B. No. 1664 passed the House on
284		-	May 24, 2017, by the following vote: Yeas 144, Nays 0, three
285		-	present not voting.
286		-	______________________________
287		-	Chief Clerk of the House
288		-	Approved:
289		-	______________________________
290		-	Date
291		-	______________________________
292		-	Governor