Texas 2025 - 89th Regular

Texas House Bill HB3594 Compare Versions

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1		-	89R18738 KFF-F
2		-	By: Lujan, LaHood, Gervin-Hawkins H.B. No. 3594
3		-	Substitute the following for H.B. No. 3594:
4		-	By: Lambert C.S.H.B. No. 3594
	1	+	89R8733 KFF-F
	2	+	By: Lujan H.B. No. 3594
5	3
6	4
7	5
8	6
9	7		A BILL TO BE ENTITLED
10	8		AN ACT
11	9		relating to the administration of a retirement health care plan for
12	10		firefighters and police officers in certain municipalities.
13	11		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	12		SECTION 1. Section 1.02, Chapter 1332 (S.B. 1568), Acts of
15	13		the 75th Legislature, Regular Session, 1997 (Article 6243q,
16	14		Vernon's Texas Civil Statutes), is amended by amending Subdivisions
17	15		(3), (8), and (8-a) and adding Subdivisions (4-a) and (6-b-1) to
18	16		read as follows:
19	17		(3) "Beneficiary" means a retiree, or the spouse or
20	18		other eligible dependent of a retiree, who is entitled to receive
21	19		retiree health benefits under Section 5.01 [5.01(a)] of this Act.
22	20		(4-a) "Default rate" means the actuarial assumed rate
23	21		of return as determined by the fund's actuary.
24	22		(6-b-1) "Months of service" means the number of full
25	23		months of service beginning on the date the firefighter or police
26	24		officer becomes a member of the fund until the date the firefighter
27	25		or police officer retires or otherwise terminates employment as a
28	26		firefighter or police officer, less the number of full months of
29	27		service during which the member:
30	28		(A) was engaged in active service with any
31	29		uniformed service of the United States and did not purchase credit
32		-	for that service in accordance with Section 4.023 of this Act;
	30	+	for that service in accordance with Section 4.023 of this Act; and
33	31		(B) took other unpaid leave, including unpaid
34	32		leave described by Section 4.024 of this Act, and did not purchase
35		-	credit for that leave in accordance with applicable law; or
36		-	(C) was placed on unpaid leave by the
37		-	municipality to which this Act applies.
	33	+	credit for that leave in accordance with applicable law.
38	34		(8) "Retiree" means an individual who was a
39	35		firefighter or police officer who retired under the pension act
40	36		[whose retirement date is] after September 30, 1989.
41	37		(8-a) "Retiree health plan" means the group family
42	38		health plan for retirees and other beneficiaries:
43	39		(A) established under this Act; and
44	40		(B) in effect on October 1, 2025 [by the
45	41		collective bargaining agreements and the master contract
46	42		document].
47	43		SECTION 2. Section 1.05, Chapter 1332 (S.B. 1568), Acts of
48	44		the 75th Legislature, Regular Session, 1997 (Article 6243q,
49	45		Vernon's Texas Civil Statutes), is amended to read as follows:
50	46		Sec. 1.05. EXEMPTIONS. (a) The health benefits paid or
51	47		payable by the fund are exempt from garnishment, assignment,
52	48		attachment, judgments, other legal processes, and inheritance or
53	49		other taxes established by this state.
54	50		(b) Fund assets are exempt from attachment, execution,
55	51		alienation, and forced sale. A judgment lien or abstract of
56	52		judgment may not be filed or perfected against the fund on fund
57	53		assets. A judgment lien or abstract of judgment filed against the
58	54		fund on fund assets is void.
59	55		SECTION 3. Article 1, Chapter 1332 (S.B. 1568), Acts of the
60	56		75th Legislature, Regular Session, 1997 (Article 6243q, Vernon's
61	57		Texas Civil Statutes), is amended by adding Section 1.06 to read as
62	58		follows:
63	59		Sec. 1.06. CONSTRUCTION OF ACT. This Act does not provide
64	60		any benefit that is not specifically provided by this Act.
65	61		SECTION 4. Sections 2.01(a) and (c), Chapter 1332 (S.B.
66	62		1568), Acts of the 75th Legislature, Regular Session, 1997 (Article
67	63		6243q, Vernon's Texas Civil Statutes), are amended to read as
68	64		follows:
69	65		(a) The [firefighters' and police officers' retiree health
70	66		care] fund [of a municipality] is governed by a board of trustees
71	67		consisting of the following nine members:
72	68		(1) the mayor of the municipality to which this Act
73	69		applies or the mayor's designee;
74	70		(2) two members of the [municipal] governing body of
75	71		the municipality to which this Act applies, appointed by that
76	72		governing body;
77	73		(3) two members of the fund who are firefighters below
78	74		the rank of fire chief, elected by secret ballot by a majority of
79	75		the votes cast by the members of the fund who are firefighters;
80	76		(4) two members of the fund who are police officers
81	77		below the rank of police chief, elected by secret ballot by a
82	78		majority of the votes cast by the members of the fund who are police
83	79		officers;
84	80		(5) a retiree representative of the fire department,
85	81		elected by secret ballot by a majority of the votes cast by the
86	82		retirees of the fire department who are beneficiaries of the fund
87	83		and the surviving spouses of deceased firefighters who are
88	84		beneficiaries of the fund; and
89	85		(6) a retiree representative of the police department,
90	86		elected by secret ballot by a majority of the votes cast by the
91	87		retirees of the police department who are beneficiaries of the fund
92	88		and the surviving spouses of deceased police officers who are
93	89		beneficiaries of the fund.
94	90		(c) The fund is independent of the control of the
95	91		municipality to which this Act applies.
96	92		SECTION 5. Sections 2.02(b), (c), and (d), Chapter 1332
97	93		(S.B. 1568), Acts of the 75th Legislature, Regular Session, 1997
98	94		(Article 6243q, Vernon's Texas Civil Statutes), are amended to read
99	95		as follows:
100	96		(b) The two members of the [municipal] governing body of the
101	97		municipality to which this Act applies serve on the board for the
102	98		term of the office to which they were elected or appointed, provided
103	99		that the term of the member on the board expires on the day the
104	100		member ceases to be a member of the governing body for any reason.
105	101		(c) The two members of the board [fund] who are firefighters
106	102		below the rank of fire chief serve on the board for staggered
107	103		four-year terms, with one member's term expiring every two years.
108	104		(d) The two members of the board [fund] who are police
109	105		officers below the rank of police chief serve on the board for
110	106		staggered four-year terms, with one member's term expiring every
111	107		two years.
112	108		SECTION 6. Section 2.04(b), Chapter 1332 (S.B. 1568), Acts
113	109		of the 75th Legislature, Regular Session, 1997 (Article 6243q,
114	110		Vernon's Texas Civil Statutes), is amended to read as follows:
115	111		(b) The board in its discretion may elect other officers of
116	112		the board. [An officer may be, but is not required to be, a
117	113		trustee.]
118	114		SECTION 7. Section 3.01(a), Chapter 1332 (S.B. 1568), Acts
119	115		of the 75th Legislature, Regular Session, 1997 (Article 6243q,
120	116		Vernon's Texas Civil Statutes), is amended to read as follows:
121	117		(a) The board has complete authority and power to:
122	118		(1) administer the fund for the exclusive benefit of
123	119		the beneficiaries of the fund;
124	120		(2) disburse benefits or otherwise order payments from
125	121		the fund;
126	122		(3) independently control the fund; and
127	123		(4) conduct all litigation on behalf of the fund.
128	124		SECTION 8. Section 4.02, Chapter 1332 (S.B. 1568), Acts of
129	125		the 75th Legislature, Regular Session, 1997 (Article 6243q,
130	126		Vernon's Texas Civil Statutes), is amended by amending Subsections
131	127		(c), (d), and (e) and adding Subsections (d-1), (d-2), (d-3), and
132	128		(d-4) to read as follows:
133	129		(c) Subject to Subsection (d-2) or (e) of this section, to
134	130		be eligible for health benefits under Section 5.01 of this Act, a
135	131		service retiree or disability retiree who retired or retires with
136	132		less than 360 months [30 years] of service, or the retiree's
137	133		surviving spouse in the case of a deceased retiree, shall continue
138	134		to make monthly contributions in accordance with Subsections
139	135		[Subsection] (d) and (d-1) of this section to the fund after the
140	136		date of the retiree's retirement for the lesser of:
141	137		(1) the period in full months preceding the date the
142	138		retiree becomes or would have become eligible for federal Medicare
143	139		coverage; or
144	140		(2) the period equal to 360 months [30 years] less the
145	141		retiree's months [years] of service achieved on the date of the
146	142		retiree's retirement.
147	143		(d) The monthly [pension fund shall deduct the]
148	144		contribution amount required under Subsection (c) of this section
149	145		[from the monthly retirement benefit payment or death benefit
150	146		payment paid to each retiree or retiree's spouse required to make
151	147		the contributions, excluding payments made by the pension fund
152	148		under Section 6.12 of the pension act. The pension fund shall
153	149		deduct an amount equal to the retiree contribution amount
154	150		applicable to the fiscal year in which the benefit payment occurs.
155	151		The retiree contribution amount] applicable to a fiscal year equals
156	152		an [the] amount obtained by:
157	153		(1) multiplying the average member salary for the
158	154		preceding fiscal year by a percentage equal to 100 percent plus the
159	155		estimated percentage increase in the annual member payroll from the
160	156		preceding fiscal year to the fiscal year as determined by the
161	157		actuary;
162	158		(2) multiplying the product computed under
163	159		Subdivision (1) of this subsection by the percentage applicable to
164	160		the fiscal year as provided by Subsection (b) of this section; and
165	161		(3) dividing the product computed under Subdivision
166	162		(2) of this subsection by 12.
167	163		(d-1) Monthly contributions under Subsection (c) of this
168	164		section shall be made on or before the last day of each month during
169	165		the period the contributions are required to be made, beginning on
170	166		the first month immediately following the month in which the
171	167		retiree retires. Any required contribution that is not made to the
172	168		fund on or before the due date shall bear interest at the default
173	169		rate in effect on the first day of the month in which the
174	170		contribution is due until the contribution is paid.
175	171		(d-2) Instead of the monthly contributions required under
176	172		Subsection (c) of this section, a retiree, or the retiree's
177	173		surviving spouse in the case of a deceased retiree, may elect to pay
178	174		to the fund a lump-sum payment equal to the monthly retiree
179	175		contribution amount under Subsection (d) of this section in effect
180	176		on the date of the retiree's retirement multiplied by the lesser of:
181	177		(1) the number of full months in the period:
182	178		(A) beginning on the retiree's date of
183	179		retirement; and
184	180		(B) ending on the date the retiree will attain or
185	181		would have attained 65 years of age; or
186	182		(2) the number of full months following the date of the
187	183		retiree's retirement which, when added to the retiree's months of
188	184		service as of the date of retirement, equals:
189	185		(A) 360 months; or
190	186		(B) if subject to Subsection (e) of this section,
191	187		120 months.
192	188		(d-3) An election under Subsection (d-2) of this section:
193	189		(1) must be:
194	190		(A) in writing and made in the form and manner
195	191		prescribed by the board; and
196	192		(B) made before making a lump-sum payment under
197	193		that subsection; and
198	194		(2) is irrevocable.
199	195		(d-4) A lump-sum payment to the fund under Subsection (d-2)
200	196		of this section:
201	197		(1) must be made in full on or before the 30th day
202	198		after the date of the retiree's retirement; and
203	199		(2) is not partially or wholly refundable.
204	200		(e) A retiree who retired under the pension act as a result
205	201		of a disability, or the disability retiree's surviving spouse in
206	202		the case of a deceased disability retiree, is not required to make
207	203		contributions under Subsection (c) of this section for more than
208	204		120 months [10 years] following the date of the disability
209	205		retiree's retirement.
210	206		SECTION 9. Section 4.022, Chapter 1332 (S.B. 1568), Acts of
211	207		the 75th Legislature, Regular Session, 1997 (Article 6243q,
212	208		Vernon's Texas Civil Statutes), is amended by adding Subsection (d)
213	209		to read as follows:
214	210		(d) The increases in maximum deductibles and maximum
215	211		out-of-pocket payments required under Subsection (a)(2) of this
216	212		section are in addition to the increases required under Section
217	213		5.01 of this Act.
218	214		SECTION 10. Sections 4.023(a), (b), (c), (d), and (f),
219	215		Chapter 1332 (S.B. 1568), Acts of the 75th Legislature, Regular
220	216		Session, 1997 (Article 6243q, Vernon's Texas Civil Statutes), are
221	217		amended to read as follows:
222	218		(a) A member of the fund who enters any uniformed service of
223	219		the United States may not:
224	220		(1) be required to make the contributions [monthly
225	221		payments into the fund as] required by Section 4.02(a) of this Act
226	222		while the member is engaged in active service with the uniformed
227	223		service; or
228	224		(2) lose any seniority rights or retirement benefits
229	225		provided by this Act because of that service.
230	226		(b) A [Not later than the 90th day after the date of the
231	227		member's reinstatement to an active status in a fire or police
232	228		department, the] member may establish credit for service not
233	229		established during the period the member was in active service with
234	230		the uniformed service by paying [shall file with the secretary of
235	231		the board a written statement of intent to pay] into the fund an
236	232		amount equal to the amount the member would have paid during that
237	233		period if the member had remained on active status in the fire or
238	234		police department [during the period of the member's absence while
239	235		in the uniformed service].
240	236		(c) The member shall make the payment described by
241	237		Subsection (b) of this section in full within a period after the
242	238		member's return to active status in the fire or police department
243	239		that is equal to three times the amount of time the member was
244	240		engaged in active service with the uniformed service [absent],
245	241		except that the maximum period for payment may not exceed five
246	242		years.
247	243		(d) If the member does not comply with Subsections (b) and
248	244		(c) of this section, the member loses all credit toward the member's
249	245		months [years] of service for the length of time the member was
250	246		engaged in active service in any uniformed service.
251	247		(f) If the member complies with this section and makes all
252	248		required payments, a municipality to which this Act applies shall
253	249		make payment to the fund in an amount equal to the amount the
254	250		municipality would have paid if the member had remained on active
255	251		status in the fire or police department during the member's absence
256	252		while in the uniformed service.
257	253		SECTION 11. Article 4, Chapter 1332 (S.B. 1568), Acts of the
258	254		75th Legislature, Regular Session, 1997 (Article 6243q, Vernon's
259	255		Texas Civil Statutes), is amended by adding Sections 4.024 and
260	256		4.025 to read as follows:
261	257		Sec. 4.024. FAMILY AND MEDICAL LEAVE. (a) If a member
262	258		takes unpaid leave as provided by the Family and Medical Leave Act
263	259		of 1993 (29 U.S.C. Section 2601 et seq.), that member may elect to
264	260		establish credit for the leave by making voluntary member
265	261		contributions to the fund for the entire period the member is on
266	262		leave in an amount equal to the amount the member would have paid
267	263		had the member not taken the leave. The contributions must be paid
268	264		to the fund not later than the 30th day after the date the member
269	265		returns from that leave.
270	266		(b) If a member elects to make voluntary member
271	267		contributions under Subsection (a) of this section, the fund shall
272	268		notify the municipality and the municipality shall make payment to
273	269		the fund in an amount equal to the total municipal contribution
274	270		amount the municipality would have paid if the member had not taken
275	271		the leave, and that payment must be made not later than the 60th day
276	272		after the date the member returns from leave.
277	273		(c) If a member does not make the member contributions
278	274		required within the time prescribed under Subsection (a) of this
279	275		section, the member may not receive credit toward the member's
280	276		months of service for the period the member was on unpaid leave.
281	277		Sec. 4.025. MEMBERS WHO ARE MARRIED: CONDITIONAL WAIVER OF
282	278		ELIGIBILITY. (a) If spouses are formally married to each other
283	279		under Chapter 2, Family Code, and are both members of the fund, on
284	280		the retirement under the pension act of the first of the couple to
285	281		retire, that retiree may, not later than the 30th day after the
286	282		retiree's retirement date, elect to conditionally waive
287	283		eligibility for health and medical benefits under this Act by
288	284		submitting to the fund written confirmation of that election in the
289	285		form and manner prescribed by the board.
290	286		(b) Subject to Subsection (c) of this section, a retiree who
291	287		conditionally waives eligibility under Subsection (a) of this
292	288		section is not required to make contributions to the fund under
293	289		Section 4.02(c) of this Act following the date the election under
294	290		Subsection (a) of this section is submitted to and accepted by the
295	291		fund.
296	292		(c) Subject to Subsection (d) of this section, if the
297	293		marriage of a retiree who has conditionally waived eligibility for
298	294		benefits under Subsection (a) of this section is dissolved, the
299	295		retiree may, not later than the 30th day after the date of the
300	296		dissolution of the marriage, elect to reinstate eligibility for
301	297		health and medical benefits under this Act by submitting to the fund
302	298		written confirmation of the election in the form and manner
303	299		prescribed by the board.
304	300		(d) A retiree who makes an election to reinstate eligibility
305	301		for health and medical benefits under Subsection (c) of this
306	302		section is only eligible for those benefits if the retiree makes the
307	303		monthly contributions required under Section 4.02(c) of this Act in
308	304		the amount applicable under Section 4.02(d) of this Act in the
309	305		fiscal year in which the contribution is made. The initial
310	306		contribution is due on the last day of the month immediately
311	307		following the month in which the election is submitted to and
312	308		accepted by the fund.
313	309		SECTION 12. Section 5.01, Chapter 1332 (S.B. 1568), Acts of
314	310		the 75th Legislature, Regular Session, 1997 (Article 6243q,
315	311		Vernon's Texas Civil Statutes), is amended by amending Subsections
316	312		(d) and (e) and adding Subsections (d-1), (i), (j), (k), and (l) to
317	313		read as follows:
318	314		(d) Except as provided by Subsection (d-1) of this section,
319	315		the [The] board as it considers appropriate may modify the retiree
320	316		health plan if the modifications adopted at any regular or special
321	317		meeting of the board do not, in the aggregate, increase the fund's
322	318		total actuarial unfunded liability, as determined by the actuary.
323	319		The board has exclusive authority to modify the retiree health
324	320		plan.
325	321		(d-1) The board may modify the retiree health plan to allow
326	322		a surviving spouse of a deceased retiree to continue to be eligible
327	323		for coverage under the retiree health plan after the spouse's
328	324		remarriage regardless of whether that modification increases the
329	325		fund's total actuarial unfunded liability.
330	326		(e) The board may discontinue benefits under this section
331	327		for any person who does not make the monthly contributions required
332	328		by Section 4.02(c) or (e) [Section 4.02] of this Act, as applicable,
333	329		within the time prescribed by Section 4.02(d-1) of this Act.
334	330		(i) Increases in maximum deductibles and maximum
335	331		out-of-pocket payments required under this section are in addition
336	332		to the increases required under Section 4.022(a)(2) of this Act.
337	333		(j) The board may require the payment of a premium for
338	334		coverage of dependent children under the retiree health plan.
339	335		(k) Any person entitled to receive health and medical
340	336		benefits under this Act may unconditionally waive their rights to
341	337		receive those benefits by executing and delivering to the fund a
342	338		waiver of their rights in the form and manner prescribed by the
343	339		board. A person who waives their rights to receive benefits under
344	340		this subsection is no longer under any circumstances entitled to
345	341		receive benefits under this Act.
346	342		(l) Health and medical benefits provided by the fund under
347	343		this Act or which may be provided by the fund under this Act do not
348	344		constitute divisible marital property.
349	345		SECTION 13. Section 6.04(c), Chapter 1332 (S.B. 1568), Acts
350	346		of the 75th Legislature, Regular Session, 1997 (Article 6243q,
351	347		Vernon's Texas Civil Statutes), is amended to read as follows:
352	348		(c) The board may directly manage investments of the reserve
353	349		funds or may choose to contract for professional management
354	350		services. If the fund owns or anticipates owning [funds own] real
355	351		estate, the board may, at its discretion, establish an organization
356	352		described by Section 501(c)(2) or 501(c)(25), Internal Revenue Code
357	353		of 1986, as amended, to hold title to the real estate.
358	354		SECTION 14. Section 6.05(a), Chapter 1332 (S.B. 1568), Acts
359	355		of the 75th Legislature, Regular Session, 1997 (Article 6243q,
360	356		Vernon's Texas Civil Statutes), is amended to read as follows:
361	357		(a) The board may authorize and direct one or more board
362	358		members or officers of the fund to enter into contracts on behalf of
363	359		the fund for the provision of professional services, including
364	360		contracts with [contract for] professional investment managers
365	361		[management services], financial consultants, independent
366	362		auditors, third-party administrators, preferred providers, health
367	363		maintenance organizations, attorneys, and actuaries. The [Only
368	364		the] board has the exclusive power to authorize the execution of the
369	365		[may enter into those] contracts and[. The board] may establish a
370	366		reasonable fee for compensation under the [those] contracts.
371	367		SECTION 15. Section 7.01(b), Chapter 1332 (S.B. 1568), Acts
372	368		of the 75th Legislature, Regular Session, 1997 (Article 6243q,
373	369		Vernon's Texas Civil Statutes), is amended to read as follows:
374	370		(b) To implement Subsection (a) of this section and to
375	371		strengthen the faith and confidence of the members and
376	372		beneficiaries of the fund, the board shall develop standards of
377	373		conduct and financial disclosure requirements to be observed by
378	374		each member of the board [trustee] and by the executive director in
379	375		the performance of the board members' [board's] and executive
380	376		director's official duties.
381	377		SECTION 16. Sections 1.02(4), (6-a), and (10) and 5.01(c),
382	378		Chapter 1332 (S.B. 1568), Acts of the 75th Legislature, Regular
383	379		Session, 1997 (Article 6243q, Vernon's Texas Civil Statutes), are
384	380		repealed.
385	381		SECTION 17. Section 4.02(d-2), Chapter 1332 (S.B. 1568),
386	382		Acts of the 75th Legislature, Regular Session, 1997 (Article 6243q,
387	383		Vernon's Texas Civil Statutes), as added by this Act, applies only
388	384		to or with respect to a member who retires on or after October 1,
389	385		2025.
390	386		SECTION 18. Section 5.01(d-1), Chapter 1332 (S.B. 1568),
391	387		Acts of the 75th Legislature, Regular Session, 1997 (Article 6243q,
392	388		Vernon's Texas Civil Statutes), as added by this Act, applies only
393	389		to a surviving spouse whose remarriage occurs on or after October 1,
394	390		2025.
395	391		SECTION 19. This Act takes effect October 1, 2025.