Texas 2021 - 87th Regular

Texas Senate Bill SB706 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	87R2484 BDP-D
1	2		By: Lucio, et al. S.B. No. 706
2		-	(In the Senate - Filed February 26, 2021; March 11, 2021,
3		-	read first time and referred to Committee on Finance;
4		-	April 13, 2021, reported favorably by the following vote: Yeas 15,
5		-	Nays 0; April 13, 2021, sent to printer.)
6		-	Click here to see the committee vote
7	3
8	4
9	5		A BILL TO BE ENTITLED
10	6		AN ACT
11	7		relating to the continuation and functions of the Teacher
12	8		Retirement System of Texas.
13	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	10		SECTION 1. Section 824.002(c), Government Code, is amended
15	11		to read as follows:
16	12		(c) For the purposes of this section, a member's employment
17	13		in a position covered by the retirement system does not end if the
18	14		member is on leave of absence or has a contract for future
19	15		employment in a public school, other than a contract for employment
20	16		that would, if the retiring member and the employer were to comply
21	17		with all procedural requirements, qualify under Section 824.602 for
22	18		an exception to a reduction or [the] loss of monthly benefits
23	19		required by Section 824.601.
24	20		SECTION 2. Section 824.2031(b), Government Code, is amended
25	21		to read as follows:
26	22		(b) A determination under this section shall be founded on
27	23		the information in the most recent report of an investment
28	24		practices and performance evaluation [audit] conducted under
29	25		Section 802.109 [825.512] and the application of that information
30	26		to:
31	27		(1) the present amortization period for liabilities of
32	28		the retirement system;
33	29		(2) the rate of return on retirement system
34	30		investments over and above the rate of inflation of the investment
35	31		portfolio as a whole, of the portion of the investment portfolio
36	32		entrusted to private investment entities, and of the portion of the
37	33		investment portfolio entrusted to investment officers who are
38	34		employees of the retirement system;
39	35		(3) economic projections of market conditions and
40	36		future investment rates of return as reflected in the comptroller's
41	37		most recent economic forecast and revenue estimate;
42	38		(4) the costs, including changes in the amortization
43	39		period for liabilities of the retirement system, of providing
44	40		cost-of-living or other increases in benefits to current
45	41		annuitants; and
46	42		(5) an evaluation of the diversity of retirement
47	43		system investments and whether the portfolio provides low-risk,
48	44		long-term growth.
49	45		SECTION 3. The heading to Subchapter G, Chapter 824,
50	46		Government Code, is amended to read as follows:
51	47		SUBCHAPTER G. REDUCTION OR LOSS OF BENEFITS ON RESUMPTION OF
52	48		SERVICE
53	49		SECTION 4. The heading to Section 824.601, Government Code,
54	50		is amended to read as follows:
55	51		Sec. 824.601. REDUCTION OR LOSS OF MONTHLY BENEFITS.
56	52		SECTION 5. Section 824.601, Government Code, is amended by
57	53		amending Subsections (b) and (e) and adding Subsections (b-3) and
58	54		(b-4) to read as follows:
59	55		(b) Except as provided by Subsection (b-1), (b-3), or (b-4),
60	56		or Section 824.602 and subject to Subsection (b-2), during [a
61	57		retiree is not entitled to service or disability retirement benefit
62	58		payments, as applicable, for] any month in which a [the] retiree is
63	59		employed in any position by a Texas public educational institution,
64	60		the retiree's entitlement to service or disability retirement
65	61		benefit payments for that month is reduced by an amount equal to the
66	62		lesser of:
67	63		(1) the retiree's benefit payment for that month; or
68	64		(2) the total compensation earned by the retiree for
69	65		the employment during that month:
70	66		(A) as reported by the retiree's employer; or
71	67		(B) if not reported, verified in a manner
72	68		prescribed by the retirement system.
73	69		(b-3) If the total compensation earned by a retiree is not
74	70		reported or verified under Subsection (b)(2), the retiree's
75	71		entitlement to service or disability retirement benefit payments
76	72		for that month is reduced by an amount equal to the retiree's
77	73		benefit payment for that month.
78	74		(b-4) A retiree under Section 824.302 who is employed in any
79	75		position by a Texas public educational institution for more than 90
80	76		days in a school year is not entitled to disability retirement
81	77		benefit payments for the months the retiree was employed by the
82	78		institution unless the retiree qualifies for the exception
83	79		described by Section 824.602(g).
84	80		(e) A reduction or loss [Loss] of benefits under this
85	81		section does not extend any period of guaranteed benefits elected
86	82		pursuant to Section 824.204.
87	83		SECTION 6. Sections 824.602(a), (g), and (k), Government
88	84		Code, are amended to read as follows:
89	85		(a) Subject to Section 825.506, the retirement system may
90	86		not, under Section 824.601, reduce or withhold a monthly benefit
91	87		payment if the retiree is employed in a Texas public educational
92	88		institution:
93	89		(1) as a substitute only with pay not more than the
94	90		daily rate of substitute pay established by the employer and, if the
95	91		retiree is a disability retiree, the employment has not exceeded a
96	92		total of 90 days in the school year;
97	93		(2) in a position, other than as a substitute, on no
98	94		more than a one-half time basis for the month;
99	95		(3) in one or more positions on as much as a full-time
100	96		basis, if the retiree has been separated from service with all Texas
101	97		public educational institutions for at least 12 full consecutive
102	98		months after the retiree's effective date of retirement; or
103	99		(4) in a position, other than as a substitute, on no
104	100		more than a one-half time basis for no more than 90 days in the
105	101		school year, if the retiree is a disability retiree.
106	102		(g) The exceptions provided by Subsections (a)(2) and
107	103		(a)(3) do not apply to disability retirees. The retirement system
108	104		nevertheless may not withhold a monthly benefit payment under
109	105		Section 824.601 if:
110	106		(1) a disability retiree is employed in a Texas public
111	107		educational institution in a position, other than as a substitute,
112	108		for a period not to exceed three consecutive months;
113	109		(2) the work occurs in a period, designated by the
114	110		disability retiree, of no more than three consecutive months;
115	111		(3) the disability retiree executes on a form and at a
116	112		time prescribed by the retirement system a written election to have
117	113		this exception apply on a one-time trial basis in determining
118	114		whether benefits are to be suspended for the months of employment
119	115		after retirement and in determining whether a disability retiree is
120	116		no longer mentally or physically incapacitated for the performance
121	117		of duty; and
122	118		(4) the disability retiree has not previously elected
123	119		to avoid a reduction or loss of monthly benefits under this
124	120		subsection.
125	121		(k) The actuary designated by the board of trustees shall,
126	122		in investigating the experience of the members of the system, note
127	123		any significant increase in early age retirements and determine the
128	124		extent to which any increase has been caused by the exception to a
129	125		reduction or loss of benefits for employment after retirement
130	126		provided by Subsection (a)(3). If the actuary certifies in writing
131	127		to the retirement system that sound actuarial funding of the
132	128		retirement system's benefits is endangered by continuation of this
133	129		exception, the board of trustees may determine that no further
134	130		elections of the exception will be accepted from retirees, other
135	131		than from those who have previously relied on the exception in
136	132		retiring under this subtitle. A retiree may be considered to have
137	133		relied on this exception only if retirement occurred on or after May
138	134		31, 1985, but before the date the board of trustees acknowledges
139	135		receipt of such certification and if the retiree has first elected
140	136		to receive benefits under the exception not later than two years
141	137		after the retiree's effective date of retirement.
142	138		SECTION 7. Section 824.601(f), Government Code, is
143	139		redesignated as Section 824.604, Government Code, and amended to
144	140		read as follows:
145	141		Sec. 824.604. RULES. [(f)] The board of trustees [system]
146	142		may adopt rules necessary for administering this subchapter.
147	143		SECTION 8. Section 825.0041, Government Code, is amended by
148	144		amending Subsection (b) and adding Subsection (d) to read as
149	145		follows:
150	146		(b) The [A] training program must provide the person with
151	147		information regarding:
152	148		(1) the law governing [legislation that created the]
153	149		retirement system operations; [and the system's]
154	150		(2) the programs, functions, rules, and budget of the
155	151		system;
156	152		(3) the scope of and limitations on the rulemaking
157	153		authority of the board of trustees;
158	154		(4) [(2)] the results of the most recent formal audit
159	155		of the system;
160	156		(5) [(3)] the requirements of:
161	157		(A) laws relating to open meetings, public
162	158		information, administrative procedure, and disclosing
163	159		conflicts-of-interest [conflicts of interest]; and
164	160		(B) other laws applicable to members of a state
165	161		policy-making body in performing their duties; and
166	162		(6) [(4)] any applicable ethics policies adopted by
167	163		the system or the Texas Ethics Commission.
168	164		(d) The executive director of the retirement system shall
169	165		create a training manual that includes the information required by
170	166		Subsection (b). The executive director shall distribute a copy of
171	167		the training manual annually to each member of the board of
172	168		trustees. Each member of the board of trustees shall sign and
173	169		submit to the executive director a statement acknowledging that the
174	170		member received and has reviewed the training manual.
175	171		SECTION 9. Section 825.006, Government Code, is amended to
176	172		read as follows:
177	173		Sec. 825.006. SUNSET PROVISION. The board of trustees of
178	174		the Teacher Retirement System of Texas is subject to review under
179	175		Chapter 325 (Texas Sunset Act), but is not abolished under that
180	176		chapter. The board shall be reviewed during the period in which
181	177		state agencies abolished in 2033 [2021], and every 12th year after
182	178		that year, are reviewed.
183	179		SECTION 10. Subchapter C, Chapter 825, Government Code, is
184	180		amended by adding Section 825.216 to read as follows:
185	181		Sec. 825.216. OMBUDSMAN. (a) Subject to Section 825.506,
186	182		the board of trustees shall designate an ombudsman within the
187	183		retirement system to assist members by performing member protection
188	184		and advocacy functions, including:
189	185		(1) monitoring the system's interactions with members;
190	186		(2) receiving and reviewing complaints from members;
191	187		(3) taking appropriate action regarding complaints,
192	188		including conducting investigations of complaints or escalating or
193	189		reporting complaints to the board;
194	190		(4) informing a member and the board of the results of
195	191		the ombudsman's review or investigation of a member's complaint;
196	192		and
197	193		(5) recommending corrective actions to the board as
198	194		determined necessary by the ombudsman to resolve complaints.
199	195		(b) The ombudsman designated under this section shall
200	196		regularly submit a report to the board of trustees recommending
201	197		changes to the retirement system's operations that would benefit
202	198		members and increase opportunities for the members to participate
203	199		in the system's decisions.
204	200		SECTION 11. Section 825.308, Government Code, is amended to
205	201		read as follows:
206	202		Sec. 825.308. STATE CONTRIBUTION ACCOUNT. The retirement
207	203		system shall deposit in the state contribution account:
208	204		(1) all state contributions to the retirement system
209	205		required by Section 825.404;
210	206		(2) amounts from the interest account as provided by
211	207		Section 825.313(b)(2);
212	208		(3) retirement annuities, or that portion of
213	209		annuities, as applicable, waived or forfeited in accordance with
214	210		Section 824.601 or 824.004;
215	211		(4) fees collected under Section 825.403(h);
216	212		(5) fees and interest for reinstatement of service
217	213		credit or establishment of membership service credit as provided by
218	214		Section 823.501;
219	215		(6) the portion of a deposit required by Section
220	216		823.302 to establish military service credit that represents a fee;
221	217		and
222	218		(7) employer contributions required under Section
223	219		825.4092.
224	220		SECTION 12. Section 825.4041(f), Government Code, is
225	221		amended to read as follows:
226	222		(f) At the end of each school year, the retirement system
227	223		shall certify to the [commissioner of education and to the] state
228	224		auditor:
229	225		(1) the name of each employer that is an institution of
230	226		higher education and has failed to remit, within the period
231	227		required by Section 825.408, all payments required under this
232	228		section for the school year; and
233	229		(2) the amounts of the unpaid required payments.
234	230		SECTION 13. Section 825.405(f), Government Code, is amended
235	231		to read as follows:
236	232		(f) If the commissioner of education receives a
237	233		certification from the retirement system regarding unpaid
238	234		contributions [under Subsection (e)], the commissioner shall
239	235		direct the comptroller of public accounts to withhold the amount
240	236		certified, plus interest computed at the rate and in the manner
241	237		provided by Section 825.408, from the first state money payable to
242	238		the employer. The amount withheld shall be deposited to the credit
243	239		of the appropriate accounts of the retirement system.
244	240		SECTION 14. Section 825.502, Government Code, is amended by
245	241		amending Subsection (b) and adding Subsection (c) to read as
246	242		follows:
247	243		(b) If the member or the member's heirs cannot be found
248	244		after complying with the policy adopted under Subsection (c), the
249	245		member's accumulated contributions are forfeited to the retirement
250	246		system. The retirement system shall credit the amount forfeited to
251	247		the retired reserve account.
252	248		(c) The board of trustees shall adopt a policy requiring the
253	249		retirement system to make all reasonable efforts to locate and
254	250		notify a member or, if appropriate, the member's heirs of their
255	251		entitlement to a return of accumulated contributions under this
256	252		section. The policy must ensure that the:
257	253		(1) notice:
258	254		(A) provides information on how a member or the
259	255		member's heirs, as appropriate, may withdraw the accumulated
260	256		contributions, including information on how to effectuate a
261	257		withdrawal through an election to receive a direct rollover of the
262	258		contributions to an eligible retirement plan; and
263	259		(B) is initially sent to the member by certified
264	260		mail, return receipt requested, at the last known address of the
265	261		member according to the system's records; and
266	262		(2) procedure used to locate a member or the member's
267	263		heirs:
268	264		(A) requires, at a minimum, that the system
269	265		conduct Internet searches to determine a current and accurate
270	266		mailing address of the member or the member's heir and send a notice
271	267		that complies with Subdivision (1) to the member or the member's
272	268		heir, as applicable, by certified mail, return receipt requested;
273	269		and
274	270		(B) employs a matrix based on defined factors for
275	271		determining on a graduated scale the degree and type of additional
276	272		effort required, and those efforts must include:
277	273		(i) contacting the member's designated
278	274		beneficiary;
279	275		(ii) obtaining information from consumer
280	276		reporting agencies; and
281	277		(iii) using commercial locating services.
282	278		SECTION 15. Sections 825.511(a) and (c), Government Code,
283	279		are amended to read as follows:
284	280		(a) The retirement system shall maintain a system to
285	281		promptly and efficiently act on complaints filed with the
286	282		retirement system [that the system has authority to resolve]. The
287	283		retirement system shall maintain information about parties to the
288	284		complaint, the subject matter of the complaint, a summary of the
289	285		results of the review or investigation of the complaint, and its
290	286		disposition.
291	287		(c) The retirement system shall periodically notify the
292	288		complaint parties of the status of the complaint until final
293	289		disposition unless the notice would jeopardize an investigation.
294	290		SECTION 16. Section 825.521, Government Code, is amended to
295	291		read as follows:
296	292		Sec. 825.521. DEADLINE TO APPEAL [FINAL] ADMINISTRATIVE
297	293		DECISION. In adopting rules governing an [the] appeal authorized
298	294		by law or rule of a determination or decision of the retirement
299	295		system by the system's staff, including a final administrative
300	296		decision of the [retirement] system, the board of trustees shall
301	297		ensure that rules establishing deadlines for [the] filing the [of
302	298		an] appeal afford a member or retiree at least the same amount of
303	299		time to file the [an] appeal as the retirement system has to issue
304	300		the determination or [retirement system's] decision.
305	301		SECTION 17. The heading to Subchapter G, Chapter 825,
306	302		Government Code, is amended to read as follows:
307	303		SUBCHAPTER G. OUTREACH TO MEMBERS AND EMPLOYERS [MEMBER SERVICES]
308	304		SECTION 18. Section 825.601, Government Code, is amended to
309	305		read as follows:
310	306		Sec. 825.601. OUTREACH PLAN [POLICIES GOVERNING RETIREMENT
311	307		BENEFITS COUNSELING]. (a) The board of trustees shall develop and
312	308		adopt an outreach plan designed to assist each member of the system,
313	309		and as appropriate the members' employers, in effectively planning
314	310		for the member's retirement. The plan must require the retirement
315	311		system to:
316	312		(1) identify and implement ways to improve
317	313		communication between the system and the system's members and
318	314		employers;
319	315		(2) update and develop outreach materials and other
320	316		information distributed by the system, including handbooks,
321	317		brochures, presentations, and handouts, in a manner that complies
322	318		with Section 802.106(g);
323	319		(3) update and develop policies governing retirement
324	320		benefits counseling provided to members by the system, including[.
325	321		The] policies that [must]:
326	322		(A) subject to Section 825.602, ensure [(1)
327	323		address the manner in which] the [retirement] system makes group
328	324		and individual member retirement benefits counseling available
329	325		throughout the state;
330	326		[(2) identify the geographic regions of the state most
331	327		in need of retirement benefits counseling services and the manner
332	328		in which that need will be met;] and
333	329		(B) [(3)] clarify that the retirement system
334	330		does not provide financial or legal advice;
335	331		(4) provide at least annually to each member of the
336	332		system, regardless of whether the member is vested in the system, an
337	333		estimate of the member's retirement benefits;
338	334		(5) enhance employer training and establish an
339	335		Internet portal designed to assist employers to:
340	336		(A) satisfy applicable reporting requirements;
341	337		(B) provide general information to individual
342	338		members on:
343	339		(i) employment after retirement;
344	340		(ii) enrollment in health insurance
345	341		benefit plans; and
346	342		(iii) retirement benefits and retirement
347	343		planning; and
348	344		(C) facilitate other communications or exchanges
349	345		involving members and the retirement system; and
350	346		(6) design and implement methods for maintaining
351	347		up-to-date contact information for members and beneficiaries based
352	348		on best practices for outreach.
353	349		(b) In developing the outreach plan, the board of trustees
354	350		shall solicit input through surveys or other means from members of
355	351		the system, employers, and other stakeholders, including
356	352		appropriate advisory groups.
357	353		(c) Once every five years, the retirement system shall
358	354		review and update the outreach plan adopted under this section.
359	355		SECTION 19. Section 825.602(b), Government Code, is amended
360	356		to read as follows:
361	357		(b) The retirement system shall provide retirement benefits
362	358		counseling for individual members:
363	359		(1) in different geographic regions of this state,
364	360		including regions outside of Austin; and
365	361		(2) in person or by phone, at the election of the
366	362		member.
367	363		SECTION 20. Subchapter A, Chapter 1575, Insurance Code, is
368	364		amended by adding Section 1575.010 to read as follows:
369	365		Sec. 1575.010. INFORMATION REGARDING APPEALS. The trustee
370	366		shall develop and distribute informational materials to
371	367		individuals enrolled in a health benefit plan offered under the
372	368		group program regarding:
373	369		(1) the enrollee's right to appeal denial of an adverse
374	370		determination, as defined by Section 4201.002, to an independent
375	371		review organization;
376	372		(2) the procedures for appealing to an independent
377	373		review organization; and
378	374		(3) the assistance available from the trustee in
379	375		navigating the procedures for appeal.
380	376		SECTION 21. Section 1575.453, Insurance Code, is amended to
381	377		read as follows:
382	378		Sec. 1575.453. STUDY AND REPORT BY TRUSTEE. (a) The
383	379		trustee shall study the operation and administration of this
384	380		chapter, including:
385	381		(1) conducting surveys and preparing reports on
386	382		financing group coverages and health benefit plans available to
387	383		participants; [and]
388	384		(2) studying the experience and projected cost of
389	385		coverage; and
390	386		(3) reviewing the group coverages provided to and the
391	387		benefits and services being received by individuals covered under
392	388		this chapter.
393	389		(b) The trustee shall report annually to the legislature and
394	390		the department [at each regular session] on the operation and
395	391		administration of this chapter.
396	392		SECTION 22. Subchapter A, Chapter 1579, Insurance Code, is
397	393		amended by adding Section 1579.010 to read as follows:
398	394		Sec. 1579.010. INFORMATION REGARDING APPEALS. The trustee
399	395		shall develop and distribute informational materials to
400	396		individuals enrolled in a health coverage plan provided under this
401	397		chapter regarding:
402	398		(1) an enrollee's right to appeal denial of an adverse
403	399		determination, as defined by Section 4201.002, to an independent
404	400		review organization;
405	401		(2) the procedures for appealing to an independent
406	402		review organization; and
407	403		(3) the assistance available from the trustee in
408	404		navigating the procedures for appeal.
409	405		SECTION 23. Section 1579.106, Insurance Code, is amended by
410	406		amending Subsection (c) and adding Subsection (d) to read as
411	407		follows:
412	408		(c) Every 12 [six] months the trustee shall submit to the
413	409		comptroller and the Legislative Budget Board a report regarding any
414	410		cost savings achieved in the program through implementation of the
415	411		prior authorization requirement of this section. The report must
416	412		cover the previous 12-month [six-month] period.
417	413		(d) In the report under Subsection (c), the trustee:
418	414		(1) may include any cost savings achieved in the
419	415		program for coverage of prescribed drugs that are not included in
420	416		the categories listed in Subsection (b) for which prior
421	417		authorization is required by a health coverage plan provided under
422	418		this chapter; and
423	419		(2) considering cost and medical necessity, shall
424	420		identify any categories of prescribed drugs in addition to the
425	421		categories listed in Subsection (b) for which requiring prior
426	422		authorization could achieve cost savings.
427	423		SECTION 24. The following provisions are repealed:
428	424		(1) Section 802.109(j), Government Code;
429	425		(2) Section 825.405(e), Government Code;
430	426		(3) Section 825.512, Government Code; and
431	427		(4) Section 1575.452, Insurance Code.
432	428		SECTION 25. Sections 824.601 and 824.602, Government Code,
433	429		as amended by this Act, apply only to a benefit payment made by the
434	430		Teacher Retirement System of Texas that becomes payable on or after
435	431		the effective date of this Act.
436	432		SECTION 26. (a) Except as provided by Subsection (b) of
437	433		this section, Section 825.0041, Government Code, as amended by this
438	434		Act, applies to a member of the board of trustees of the Teacher
439	435		Retirement System of Texas appointed before, on, or after the
440	436		effective date of this Act.
441	437		(b) A member of the board of trustees of the Teacher
442	438		Retirement System of Texas who, before the effective date of this
443	439		Act, completed the training program required by Section 825.0041,
444	440		Government Code, as that law existed before the effective date of
445	441		this Act, is only required to complete additional training on the
446	442		subjects added by this Act to the training program required by
447	443		Section 825.0041, Government Code. A board member described by
448	444		this subsection may not vote, deliberate, or be counted as a member
449	445		in attendance at a meeting of the board held on or after December 1,
450	446		2021, until the member completes the additional training.
451	447		SECTION 27. As soon as practicable after the effective date
452	448		of this Act, but not later than December 1, 2021, the Teacher
453	449		Retirement System of Texas shall implement the outreach plan
454	450		required by Section 825.601, Government Code, as amended by this
455	451		Act.
456	452		SECTION 28. This Act takes effect immediately if it
457	453		receives a vote of two-thirds of all the members elected to each
458	454		house, as provided by Section 39, Article III, Texas Constitution.
459	455		If this Act does not receive the vote necessary for immediate
460	456		effect, this Act takes effect September 1, 2021.
461		-	* * * * *