Texas 2021 - 87th Regular

Texas House Bill HB3898 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 3898
	1	+	By: Anchia (Senate Sponsor - Huffman, Schwertner) H.B. No. 3898
	2	+	(In the Senate - Received from the House May 12, 2021;
	3	+	May 14, 2021, read first time and referred to Committee on Finance;
	4	+	May 21, 2021, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 10, Nays 0; May 21, 2021,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR H.B. No. 3898 By: Huffman
2	9
3	10
	11	+	A BILL TO BE ENTITLED
4	12		AN ACT
5	13		relating to the funding of public retirement systems.
6	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
7	15		SECTION 1. Section 28(h), Texas Local Fire Fighters
8	16		Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
9	17		amended to read as follows:
10	18		(h) A retirement system established under this Act is exempt
11	19		from Subchapter C, Chapter 802, Government Code, except Sections
12	20		802.2011, 802.2015, 802.202, 802.205, and 802.207.
13		-	SECTION 2. Section 802.109, Government Code, is amended by
14		-	amending Subsections (a), (d), (e), (f), and (h) and adding
15		-	Subsection (e-1) to read as follows:
16		-	(a) Except as provided by Subsection (e) and subject to
17		-	Subsections (c) and (k), a public retirement system shall select an
18		-	independent firm with substantial experience in evaluating
19		-	institutional investment practices and performance to evaluate the
20		-	appropriateness, adequacy, and effectiveness of the retirement
21		-	system's investment practices and performance and to make
22		-	recommendations for improving the retirement system's investment
23		-	policies, procedures, and practices. Each evaluation must include:
24		-	(1) a summary of the independent firm's experience in
25		-	evaluating institutional investment practices and performance and
26		-	a statement that the firm's experience meets the experience
27		-	required by this subsection;
28		-	(2) a statement indicating the nature of any existing
29		-	relationship between the independent firm and the public retirement
30		-	system and confirming that the firm and any related entity are not
31		-	involved in directly or indirectly managing the investments of the
32		-	system;
33		-	(3) a list of the types of remuneration received by the
34		-	independent firm from sources other than the public retirement
35		-	system for services provided to the system;
36		-	(4) a statement identifying any potential conflict of
37		-	interest or any appearance of a conflict of interest that could
38		-	impact the analysis included in the evaluation due to an existing
39		-	relationship between the independent firm and:
40		-	(A) the public retirement system; or
41		-	(B) any current or former member of the governing
42		-	body of the system; and
43		-	(5) an explanation of the firm's determination
44		-	regarding whether to include a recommendation for each of the
45		-	following evaluated matters:
46		-	(A) an analysis of any investment policy or
47		-	strategic investment plan adopted by the retirement system and the
48		-	retirement system's compliance with that policy or plan;
49		-	(B) [(2)] a detailed review of the retirement
50		-	system's investment asset allocation, including:
51		-	(i) [(A)] the process for determining
52		-	target allocations;
53		-	(ii) [(B)] the expected risk and expected
54		-	rate of return, categorized by asset class;
55		-	(iii) [(C)] the appropriateness of
56		-	selection and valuation methodologies of alternative and illiquid
57		-	assets; and
58		-	(iv) [(D)] future cash flow and liquidity
59		-	needs;
60		-	(C) [(3)] a review of the appropriateness of
61		-	investment fees and commissions paid by the retirement system;
62		-	(D) [(4)] a review of the retirement system's
63		-	governance processes related to investment activities, including
64		-	investment decision-making processes, delegation of investment
65		-	authority, and board investment expertise and education; and
66		-	(E) [(5)] a review of the retirement system's
67		-	investment manager selection and monitoring process.
68		-	(d) A public retirement system shall conduct the evaluation
69		-	described by Subsection (a):
70		-	(1) once every three years, if the total assets of the
71		-	retirement system [has total assets the book value of which,] as of
72		-	the last day of the preceding [last] fiscal year were [considered in
73		-	an evaluation under this section, was] at least $100 million; or
74		-	(2) once every six years, if the total assets of the
75		-	retirement system [has total assets the book value of which,] as of
76		-	the last day of the preceding [last] fiscal year were [considered in
77		-	an evaluation under this section, was] at least $30 million and less
78		-	than $100 million.
79		-	(e) A public retirement system is not required to conduct
80		-	the evaluation described by Subsection (a) if the total assets of
81		-	the retirement system [has total assets the book value of which,] as
82		-	of the last day of the preceding fiscal year were[, was] less than
83		-	$30 million.
84		-	(e-1) Not later than the 30th day after the date an
85		-	independent firm completes an evaluation described by Subsection
86		-	(a), the independent firm shall:
87		-	(1) submit to the public retirement system for
88		-	purposes of discussion and clarification a substantially completed
89		-	preliminary draft of the evaluation report; and
90		-	(2) request in writing that the system, on or before
91		-	the 30th day after the date the system receives the preliminary
92		-	draft, submit to the firm:
93		-	(A) a description of any action taken or expected
94		-	to be taken in response to a recommendation made in the evaluation;
95		-	and
96		-	(B) any written response of the system that the
97		-	system wants to accompany the final evaluation report.
98		-	(f) The independent firm shall file the final evaluation
99		-	report, including the evaluation results and any response received
100		-	from the public retirement system, [A report of an evaluation under
101		-	this section must be filed] with the governing body of the [public
102		-	retirement] system:
103		-	(1) not earlier than the 31st day after the date on
104		-	which the preliminary draft is submitted to the system; and
105		-	(2) not later than the later of:
106		-	(A) the 60th day after the date on which the
107		-	preliminary draft is submitted to the system; or
108		-	(B) May 1 in the [of each] year following the year
109		-	in which the system is evaluated under Subsection (a) [(d)].
110		-	(h) A governmental entity that is the employer of active
111		-	members of a public retirement system evaluated under Subsection
112		-	(a) may pay all or part of the costs of the evaluation. The [A]
113		-	public retirement system shall pay any remaining unpaid [the] costs
114		-	of the [each] evaluation [of the system under this section].
115		-	SECTION 3. Section 802.2011, Government Code, is amended to
	21	+	SECTION 2. Section 802.2011, Government Code, is amended to
116	22		read as follows:
117	23		Sec. 802.2011. FUNDING POLICY. (a) In this section:
118	24		(1) "Funded ratio" means the ratio of a public
119	25		retirement system's actuarial value of assets divided by the
120	26		system's actuarial accrued liability.
121	27		(2) "Governmental entity" has the meaning assigned by
122	28		Section 802.1012.
123	29		(3) "Statewide retirement system" means:
124	30		(A) the Employees Retirement System of Texas,
125	31		including a retirement system administered by that system;
126	32		(B) the Teacher Retirement System of Texas;
127	33		(C) the Texas County and District Retirement
128	34		System;
129	35		(D) the Texas Emergency Services Retirement
130	36		System; and
131	37		(E) the Texas Municipal Retirement System.
132	38		(b) The governing body of a public retirement system and, if
133	39		the system is not a statewide retirement system, its associated
134	40		governmental entity shall:
135	41		(1) jointly, if applicable:
136	42		(A) develop and adopt a written funding policy
137	43		that details a [the governing body's] plan for achieving a funded
138	44		ratio of the system that is equal to or greater than 100 percent;
139	45		and
140	46		(B) timely revise the policy to reflect any
141	47		significant changes to the policy, including changes required as a
142	48		result of formulating and implementing a funding soundness
143	49		restoration plan, including a revised funding soundness
144	50		restoration plan, under Section 802.2015 or 802.2016;
145	51		(2) maintain for public review at its main office a
146	52		copy of the policy;
147	53		(3) file a copy of the policy and each change to the
148	54		policy with the board not later than the 31st day after the date the
149	55		policy or change, as applicable, is adopted; and
150	56		(4) post [submit] a copy of the most recent edition of
151	57		the policy on a publicly available Internet website in accordance
152	58		with Section 802.107(c)(2) [and each change to the policy to the
153	59		system's associated governmental entity not later than the 31st day
154	60		after the date the policy or change is adopted].
155	61		(c) For purposes of Subsection (b)(1)(B), the written
156	62		funding policy must outline any automatic contribution or benefit
157	63		changes designed to prevent having to formulate a revised funding
158	64		soundness restoration plan under Section 802.2015(d), including
159	65		any automatic risk-sharing mechanisms that have been implemented,
160	66		the adoption of an actuarially determined contribution structure,
161	67		and other adjustable benefit or contribution mechanisms.
162	68		(d) The board may adopt rules necessary to implement this
163	69		section.
164		-	SECTION 4. Section 802.2015, Government Code, is amended by
	70	+	SECTION 3. Section 802.2015, Government Code, is amended by
165	71		amending Subsections (a), (c), (d), (e), (f), and (g) and adding
166	72		Subsections (d-1), (e-1), (e-2), (e-3), (e-4), and (h) to read as
167	73		follows:
168	74		(a) In this section:
169	75		(1) "Funded ratio" has the meaning assigned by Section
170	76		802.2011.
171	77		(2) "Governmental [, "governmental] entity" has the
172	78		meaning assigned by Section 802.1012.
173	79		(c) A public retirement system shall notify the associated
174	80		governmental entity in writing if the [retirement] system receives
175	81		an actuarial valuation indicating that the system's actual
176	82		contributions are not sufficient to amortize the unfunded actuarial
177	83		accrued liability within 30 [40] years. The [If a public retirement
178	84		system's actuarial valuation shows that the system's amortization
179	85		period has exceeded 40 years for three consecutive annual actuarial
180	86		valuations, or two consecutive actuarial valuations in the case of
181	87		a system that conducts the valuations every two or three years, the]
182	88		governing body of the public retirement system and the governing
183	89		body of the associated governmental entity shall jointly formulate
184	90		a funding soundness restoration plan under Subsection (e) if the
185	91		system's actuarial valuation shows that the system's expected
186	92		funding period:
187	93		(1) has exceeded 30 years for three consecutive annual
188	94		actuarial valuations, or two consecutive annual actuarial
189	95		valuations in the case of a system that conducts the valuations
190	96		every two or three years; or
191	97		(2) effective September 1, 2025:
192	98		(A) exceeds 40 years; or
193	99		(B) exceeds 30 years and the funded ratio of the
194	100		system is less than 65 percent [in accordance with the system's
195	101		governing statute].
196	102		(d) Except as provided by Subsection (d-1), the [The]
197	103		governing body of a public retirement system and the governing body
198	104		of the associated governmental entity that have an existing
199	105		[formulated a] funding soundness restoration plan under Subsection
200	106		(e) shall formulate a revised funding soundness restoration plan
201	107		under Subsection (e-1) [that subsection, in accordance with the
202	108		system's governing statute,] if the system becomes subject to
203	109		Subsection (c) before the 10th anniversary of the date prescribed
204	110		by Subsection (e)(2)(A) or (B), as applicable [conducts an
205	111		actuarial valuation showing that:
206	112		[(1) the system's amortization period exceeds 40 years;
207	113		and
208	114		[(2) the previously formulated funding soundness
209	115		restoration plan has not been adhered to].
210	116		(d-1) The governing body of a public retirement system and
211	117		the governing body of the associated governmental entity are not
212	118		subject to Subsection (d) if:
213	119		(1) the system's actuarial valuation shows that the
214	120		system's expected funding period exceeds 30 years but is less than
215	121		or equal to 40 years; and
216	122		(2) the system is:
217	123		(A) adhering to an existing funding soundness
218	124		restoration plan that was formulated before September 1, 2025; or
219	125		(B) implementing a contribution rate structure
220	126		that uses or will ultimately use an actuarially determined
221	127		contribution structure and the system's actuarial valuation shows
222	128		that the system is expected to achieve full funding.
223	129		(e) A funding soundness restoration plan formulated under
224	130		this section must:
225	131		(1) be developed by the public retirement system and
226	132		the associated governmental entity in accordance with the system's
227	133		governing statute; [and]
228	134		(2) be designed to achieve a contribution rate that
229	135		will be sufficient to amortize the unfunded actuarial accrued
230	136		liability within 30 [40] years not later than the later of:
231	137		(A) the second [10th] anniversary of the
232	138		valuation date stated in the actuarial valuation that required
233	139		formulation of the plan under this subsection; or
234	140		(B) September 1, 2025;
235	141		(3) be based on actions agreed to be taken by the
236	142		system and entity that were approved by the respective governing
237	143		bodies of both the system and the entity before the plan was
238	144		adopted; and
239	145		(4) be adopted at open meetings of the respective
240	146		governing bodies of the system and the entity not later than the
241	147		second anniversary of the date the actuarial valuation that
242	148		required application of this subsection was adopted by the
243	149		governing body of the system [on which the final version of a
244	150		funding soundness restoration plan is agreed to].
245	151		(e-1) A revised funding soundness restoration plan
246	152		formulated under this section must:
247	153		(1) be developed by the public retirement system and
248	154		the associated governmental entity in accordance with the system's
249	155		governing statute;
250	156		(2) be designed to achieve a contribution rate that
251	157		will be sufficient to amortize the unfunded actuarial accrued
252	158		liability within 25 years not later than the second anniversary of
253	159		the valuation date stated in the actuarial valuation that required
254	160		formulation of a revised plan under this subsection;
255	161		(3) be based on actions, including automatic
256	162		risk-sharing mechanisms, an actuarially determined contribution
257	163		structure, and other adjustable benefit or contribution
258	164		mechanisms, agreed to be taken by the system and entity that were
259	165		approved by the respective governing bodies of both the system and
260	166		the entity before the plan was adopted; and
261	167		(4) be adopted at open meetings by the respective
262	168		governing bodies of the system and the entity not later than the
263	169		second anniversary of the date the actuarial valuation that
264	170		required application of this subsection was adopted by the
265	171		governing body of the system.
266	172		(e-2) Not later than the 90th day after the date on which the
267	173		plan is adopted by both the governing body of the system and the
268	174		governing body of the associated governmental entity, a system may
269	175		submit to the board an actuarial valuation required under Section
270	176		802.101(a) or other law that shows the combined impact of all
271	177		changes to a funding soundness restoration plan adopted under this
272	178		section, including a revised funding soundness restoration plan
273	179		adopted under Subsection (e-1). If a system does not provide an
274	180		actuarial valuation to the board in accordance with this
275	181		subsection, the board may request that the system provide a
276	182		separate analysis of the combined impact of all changes to a funding
277	183		soundness restoration plan adopted under this section not later
278	184		than the 90th day after the date the board makes the request. An
279	185		actuarial valuation or separate analysis conducted under this
280	186		subsection must include:
281	187		(1) an actuarial projection of the public retirement
282	188		system's expected future assets and liabilities between the
283	189		valuation date described by Subsection (e)(2)(A) or (e-1)(2), as
284	190		applicable, and the date at which the plan is expected to achieve
285	191		full funding; and
286	192		(2) a description of all assumptions and methods used
287	193		to perform the analysis which must comply with actuarial standards
288	194		of practice.
289	195		(e-3) The associated governmental entity may pay all or part
290	196		of the costs of the separate analysis required under Subsection
291	197		(e-2). The public retirement system shall pay any costs for the
292	198		analysis not paid by the associated governmental entity.
293	199		(e-4) A funding soundness restoration plan adopted under
294	200		this section, including a revised funding soundness restoration
295	201		plan adopted under Subsection (e-1), may not include actions that
296	202		are subject to future approval by the governing bodies of either the
297	203		public retirement system or the associated governmental entity.
298	204		(f) A public retirement system and the associated
299	205		governmental entity required to [that] formulate a funding
300	206		soundness restoration plan under this section, including a revised
301	207		funding soundness restoration plan, shall provide a report to the
302	208		board on [any updates of] progress made by the system and entity in
303	209		formulating the plan, including a draft of any plan and a
304	210		description of any changes under consideration for inclusion in a
305	211		plan, not later than the first anniversary of the date of the
306	212		actuarial valuation that required formulation of the plan under
307	213		Subsection (e) or (e-1) and each subsequent six-month period until
308	214		the plan is submitted to the board under this section [entities
309	215		toward improved actuarial soundness to the board every two years].
310	216		(g) Each public retirement system that formulates a funding
311	217		soundness restoration plan as provided by this section shall submit
312	218		a copy of that plan to the board and any change to the plan not later
313	219		than the 31st day after the date on which the plan is adopted by both
314	220		the governing body of the system and the governing body of the
315	221		associated governmental entity or the date the change is agreed to.
316	222		(h) The board may adopt rules necessary to implement this
317	223		section.
318		-	SECTION 5. Section 802.2016, Government Code, is amended to
	224	+	SECTION 4. Section 802.2016, Government Code, is amended to
319	225		read as follows:
320	226		Sec. 802.2016. FUNDING SOUNDNESS RESTORATION PLAN FOR
321	227		CERTAIN PUBLIC RETIREMENT SYSTEMS. (a) In this section:
322	228		(1) "Funded ratio" has the meaning assigned by Section
323	229		802.2011.
324	230		(2) "Governmental [, "governmental] entity" has the
325	231		meaning assigned by Section 802.1012.
326	232		(b) This section applies only to a public retirement system
327	233		that is governed by Article 6243i, Revised Statutes, and its
328	234		associated governmental entity.
329	235		(c) A public retirement system shall notify the associated
330	236		governmental entity in writing if the [retirement] system receives
331	237		an actuarial valuation indicating that the system's actual
332	238		contributions are not sufficient to amortize the unfunded actuarial
333	239		accrued liability within 30 [40] years. The governing body of [If a
334	240		public retirement system's actuarial valuation shows that the
335	241		system's amortization period has exceeded 40 years for three
336	242		consecutive annual actuarial valuations, or two consecutive
337	243		actuarial valuations in the case of a system that conducts the
338	244		valuations every two or three years,] the associated governmental
339	245		entity shall formulate a funding soundness restoration plan under
340	246		Subsection (e) if the system's actuarial valuation shows that the
341	247		system's expected funding period:
342	248		(1) has exceeded 30 years for three consecutive annual
343	249		actuarial valuations, or two consecutive annual actuarial
344	250		valuations in the case of a system that conducts the valuations
345	251		every two or three years; or
346	252		(2) effective September 1, 2025:
347	253		(A) exceeds 40 years; or
348	254		(B) exceeds 30 years and the funded ratio of the
349	255		system is less than 65 percent [in accordance with the public
350	256		retirement system's governing statute].
351	257		(d) Except as provided by Subsection (d-1), the governing
352	258		body of an [An] associated governmental entity that has an existing
353	259		[formulated a] funding soundness restoration plan under Subsection
354	260		(e) shall formulate a revised funding soundness restoration plan
355	261		under Subsection (e-1) [that subsection, in accordance with the
356	262		public retirement system's governing statute,] if the system
357	263		becomes subject to Subsection (c) before the 10th anniversary of
358	264		the date prescribed by Subsection (e)(2)(A) or (B), as applicable
359	265		[conducts an actuarial valuation showing that:
360	266		[(1) the system's amortization period exceeds 40 years;
361	267		and
362	268		[(2) the previously formulated funding soundness
363	269		restoration plan has not been adhered to].
364	270		(d-1) The associated governmental entity is not subject to
365	271		Subsection (d) if:
366	272		(1) the system's actuarial valuation shows that the
367	273		system's expected funding period exceeds 30 years but is less than
368	274		or equal to 40 years; and
369	275		(2) the system is:
370	276		(A) adhering to an existing funding soundness
371	277		restoration plan that was formulated before September 1, 2025; or
372	278		(B) implementing a contribution rate structure
373	279		that uses or will ultimately use an actuarially determined
374	280		contribution structure and the system's actuarial valuation shows
375	281		that the system is expected to achieve full funding.
376	282		(e) A funding soundness restoration plan formulated under
377	283		this section must:
378	284		(1) be developed in accordance with the public
379	285		retirement system's governing statute by the associated
380	286		governmental entity; [and]
381	287		(2) be designed to achieve a contribution rate that
382	288		will be sufficient to amortize the unfunded actuarial accrued
383	289		liability within 30 [40] years not later than the later of:
384	290		(A) the second [10th] anniversary of the
385	291		valuation date stated in the actuarial valuation that required
386	292		formulation of the plan under this subsection; or
387	293		(B) September 1, 2025;
388	294		(3) be based on actions, including automatic
389	295		risk-sharing mechanisms, an actuarially determined contribution
390	296		structure, and other adjustable benefit or contribution
391	297		mechanisms, agreed to be taken by the system and entity that were
392	298		approved by the governing body of the associated governmental
393	299		entity before the plan was adopted; and
394	300		(4) be adopted at an open meeting of the governing body
395	301		of the associated governmental entity not later than the second
396	302		anniversary of the date the actuarial valuation that required
397	303		application of this subsection was adopted by the governing body of
398	304		the system [on which the final version of a funding soundness
399	305		restoration plan is formulated].
400	306		(e-1) A revised funding soundness restoration plan
401	307		formulated under this section must:
402	308		(1) be developed by the associated governmental
403	309		entity in accordance with the system's governing statute;
404	310		(2) be designed to achieve a contribution rate that
405	311		will be sufficient to amortize the unfunded actuarial accrued
406	312		liability within 25 years not later than the second anniversary of
407	313		the valuation date stated in the actuarial valuation that required
408	314		formulation of a revised plan under this subsection;
409	315		(3) be based on actions agreed to be taken by the
410	316		system and entity that were approved by the governing body of the
411	317		associated governmental entity before the plan was adopted; and
412	318		(4) be adopted at an open meeting of the governing body
413	319		of the associated governmental entity not later than the second
414	320		anniversary of the date the actuarial valuation that required
415	321		application of this subsection was adopted by the governing body of
416	322		the system.
417	323		(e-2) Not later than the 90th day after the date on which the
418	324		plan is adopted by the governing body of the associated
419	325		governmental entity, a system may submit to the board an actuarial
420	326		valuation required under Section 802.101(a) or other law that shows
421	327		the combined impact of all changes to a funding soundness
422	328		restoration plan adopted under this section, including a revised
423	329		funding soundness restoration plan adopted under Subsection (e-1).
424	330		If a system does not provide an actuarial valuation to the board in
425	331		accordance with this subsection, the board may request that the
426	332		system provide a separate analysis of the combined impact of all
427	333		changes to a funding soundness restoration plan adopted under this
428	334		section not later than the 90th day after the date the board makes
429	335		the request. An actuarial valuation or the separate analysis
430	336		conducted under this subsection must include:
431	337		(1) an actuarial projection of the public retirement
432	338		system's expected future assets and liabilities between the
433	339		valuation date described by Subsection (e)(2)(A) or (e-1)(2), as
434	340		applicable, and the date at which the plan is expected to achieve
435	341		full funding; and
436	342		(2) a description of all assumptions and methods used
437	343		to perform the analysis which must comply with actuarial standards
438	344		of practice.
439	345		(e-3) The associated governmental entity may pay all or part
440	346		of the costs of the separate analysis required under Subsection
441	347		(e-2). The public retirement system shall pay any costs for the
442	348		analysis not paid by the associated governmental entity.
443	349		(e-4) A funding soundness restoration plan adopted under
444	350		this section, including a revised funding soundness restoration
445	351		plan adopted under Subsection (e-1), may not include actions that
446	352		are subject to future approval by the governing body of the
447	353		associated governmental entity.
448	354		(f) An associated governmental entity required to formulate
449	355		[that formulates] a funding soundness restoration plan under this
450	356		section, including a revised funding soundness restoration plan,
451	357		shall provide a report to the board on [any updates of] progress
452	358		made by the [public retirement system and] associated governmental
453	359		entity in formulating the plan, including a draft of any plan and a
454	360		description of any changes under consideration for inclusion in a
455	361		plan, not later than the first anniversary of the date of the
456	362		actuarial valuation that required formulation of the plan under
457	363		Subsection (e) or (e-1) and each subsequent six-month period until
458	364		the plan is submitted to the board under this section [toward
459	365		improved actuarial soundness to the board every two years].
460	366		(g) An associated governmental entity that formulates a
461	367		funding soundness restoration plan as provided by this section
462	368		shall submit a copy of that plan to the board and any change to the
463	369		plan not later than the 31st day after the date on which the plan is
464	370		adopted by the governing body of the associated governmental entity
465	371		or the date the change is formulated.
466	372		(h) The board may adopt rules necessary to implement this
467	373		section.
468		-	SECTION 6. Section 802.109, Government Code, as amended by
469		-	this Act, applies only to an evaluation commenced on or after the
470		-	effective date of this Act. An evaluation commenced before the
471		-	effective date of this Act is governed by the law in effect on the
472		-	date the evaluation was commenced, and the former law is continued
473		-	in effect for that purpose.
474		-	SECTION 7. The changes in law made by this Act apply to a
	374	+	SECTION 5. The changes in law made by this Act apply to a
475	375		funding soundness restoration plan that is formulated or revised
476	376		under Section 802.2015 or 802.2016, Government Code, as applicable,
477	377		on or after the effective date of this Act. A funding soundness
478	378		restoration plan formulated or revised before the effective date of
479	379		this Act other than a plan that is subject to Section 802.2015(d-1)
480	380		or Section 802.2016(d-1), Government Code, as added by this Act, is
481	381		governed by the law as it existed immediately before that date, and
482	382		the former law is continued in effect for that purpose, except if:
483	383		(1) the public retirement system and its associated
484	384		governmental entity are required to formulate a revised funding
485	385		soundness restoration plan under Section 802.2015(d), Government
486	386		Code, as that section existed immediately before the effective date
487	387		of this Act, the system and its associated governmental entity
488	388		shall formulate the plan under Section 802.2015(e), Government
489	389		Code, as amended by this Act, rather than as that section existed
490	390		immediately before the effective date of this Act; or
491	391		(2) a public retirement system's associated
492	392		governmental entity is required to formulate a revised funding
493	393		soundness restoration plan under Section 802.2016(d), Government
494	394		Code, as that section existed immediately before the effective date
495	395		of this Act, the associated governmental entity shall formulate the
496	396		plan under Section 802.2016(e), Government Code, as amended by this
497	397		Act, rather than as that section existed immediately before the
498	398		effective date of this Act.
499		-	SECTION 8. This Act takes effect September 1, 2021.
500		-	______________________________ ______________________________
501		-	President of the Senate Speaker of the House
502		-	I certify that H.B. No. 3898 was passed by the House on May
503		-	11, 2021, by the following vote: Yeas 119, Nays 24, 2 present, not
504		-	voting; and that the House concurred in Senate amendments to H.B.
505		-	No. 3898 on May 28, 2021, by the following vote: Yeas 122, Nays 23,
506		-	2 present, not voting.
507		-	______________________________
508		-	Chief Clerk of the House
509		-	I certify that H.B. No. 3898 was passed by the Senate, with
510		-	amendments, on May 26, 2021, by the following vote: Yeas 31, Nays
511		-	0.
512		-	______________________________
513		-	Secretary of the Senate
514		-	APPROVED: __________________
515		-	Date
516		-	__________________
517		-	Governor
	399	+	SECTION 6. This Act takes effect September 1, 2021.
	400	+	* * * * *