89R16864 KFF-F
By: González of El Paso H.B. No. 4591
A BILL TO BE ENTITLED
AN ACT
relating to contributions to and benefits under certain fire and
police pension funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1A, Chapter 101 (H.B. 31), Acts of the
43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
Texas Civil Statutes), is amended by adding Subdivision (3-a) to
read as follows:
(3-a) "Qualified actuary" means an actuary that meets the
qualifications under Section 10A(b)(1) of this Act.
SECTION 2. Section 2, Chapter 101 (H.B. 31), Acts of the
43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
Texas Civil Statutes), is amended to read as follows:
Sec. 2. PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each
member fireman and policeman in the employment of such city or town
must participate in said fund, except in times of national
emergency those persons as are employed during that time shall not
be required to participate in the fund, and said city or town shall
be authorized to deduct a sum of not less than one per cent (1%) nor
in excess of six per cent (6%) of his wages from each month to form a
part of the fund known as the Firemen and Policemen Pension Fund,
except that the city or town shall deduct a sum less than one per
cent (1%) or more than six per cent (6%) of the member's wages each
month to form a part of the fund if the board of trustees of that
fund increases or decreases the percentage of wages to be
contributed to the fund under the provisions of Section 10A, 14A-1,
or 14B [14A] of this Act. The amount to be deducted from the wages
of those named above who must participate in the fund is to be
determined by the board of trustees as provided for in Section 1 of
this Act within the minimum and maximum deductions herein provided
or as otherwise provided under the provisions of Section 10A,
14A-1, or 14B [14A] of this Act.
SECTION 3. Section 3, Chapter 101 (H.B. 31), Acts of the
43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
Texas Civil Statutes), is amended to read as follows:
Sec. 3. PAYMENTS TO FUND. There shall be deducted for such
fund from the wages of each fireman and policeman a sum to be
determined by the board of trustees under the provisions of Section
[Sections] 2, 10A, 14A-1, or 14B [and 14A] of this Act. Any
donations made to such fund and rewards received by any member of
either of said funds, and all funds received from any source for
such fund shall be deposited in like manner to the credit of such
fund.
SECTION 4. Sections 10A(b) and (c), Chapter 101 (H.B. 31),
Acts of the 43rd Legislature, 1st Called Session, 1933 (Article
6243b, Vernon's Texas Civil Statutes), are amended to read as
follows:
(b) None of the changes made under Subsection (a) of this
section may be made unless all of the following conditions are
sequentially complied with:
(1) the change must be approved by a qualified actuary
selected by a four-fifths vote of the Board; the actuary's approval
must be based on an actuarial finding that the change is supported
by the existing funding status of the fund or by a contribution
increase by the city or town or by both the city or town and the
members of the pension fund; the actuary, if an individual, must be
a Fellow of the Society of Actuaries or a Fellow of the Conference
of Actuaries in Public Practice or a Member of the American Academy
of Actuaries; the actuary, if an actuarial consulting firm, must
be established in the business of providing actuarial consulting
services to pension plans and have experienced personnel able to
provide the requested services; the findings upon which the
properly selected and qualified actuary's approval are based are
not subject to judicial review;
(2) the change must be approved by a majority of all
persons then making contributions to the fund as employees of a
department to which the change would directly apply, voting by
secret ballot at an election held after 10 [ten (10)] days' notice
given by posting at a prominent place in every station or substation
of a department to which the change would directly apply and in the
city hall;
(3) the changes, except changes made under the
provisions of [Subdivision (1),] Subsection (a)(1) [(a),] of this
section, shall apply only to active member employees who are
members of the affected departments at the time the change becomes
effective and those who enter the departments thereafter; and
(4) the changes shall not deprive any person, without
his written consent, of any right to receive a pension or benefits
which have already become vested and matured.
(c) If the Board of Trustees proposes to change benefits
under [Subdivision (1),] Subsection (a)(1) [(a),] of this section,
the change is not effective until the change is finally approved in
accordance with this subsection. The Board shall submit the change
for approval by the city's or town's governing body. If disapproved
by the governing body, or if the governing body fails to act not
later than the 60th day after the date [within sixty (60) days] of
presentation to the governing body, the Board, by resolution passed
by a majority of the whole Board, plus one, may require the city's
or town's governing body to hold an election, as soon as
practicable, for approval of the change by the qualified voters of
the city or town. Any change proposed and subsequently approved by
the governing body of the city or town or by the voters, as
applicable, under this subsection becomes effective as of the
beginning of the city's or town's next fiscal year.
SECTION 5. Chapter 101 (H.B. 31), Acts of the 43rd
Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
Texas Civil Statutes), is amended by amending Sections 14, 14A, and
14B and adding Section 14A-1 to read as follows:
Sec. 14. USE OF PUBLIC FUNDS; CITY OR TOWN MINIMUM
CONTRIBUTION. (a) Except as provided by this section and Section
14A, 14A-1, or 14B of this Act, no funds shall be paid out of the
public treasury of any such incorporated city or town, in carrying
out any of the provisions of this law, except on a majority vote of
the voters of such city or town, and where such funds have been
voted on as provided by law, said city or town shall contribute such
amount.
(b) Subject to an increase under Section 14A or 14A-1 of
this Act or a decrease under Section 14B of this Act, the city or
town shall contribute an amount to the pension fund that is not less
than 18 percent of the total amount expended by the city or town on
member wages.
Sec. 14A. CITY OR TOWN CONTRIBUTION INCREASES. (a) The
city or town may increase its contribution rate above the rate
prescribed by Section 14(b) of this Act based on a qualified
actuary's report only if the governing body of the city or town, or
a majority vote of the voters of the city or town, approves the
increase to the city or town contribution rate.
(b) The Board of Trustees may submit for approval by the
city's or town's governing body a proposed contribution rate
increase under Subsection (a) of this section. If the proposed
contribution rate increase is disapproved by the governing body, or
if the governing body fails to act not later than the 60th day after
the date the proposal is presented to the governing body, the Board,
by resolution passed by a majority of the whole Board, plus one, may
require the city's or town's governing body to hold an election, as
soon as practicable, for approval of the change by the qualified
voters of the city or town. Any change proposed and subsequently
approved by the governing body or by the voters, as applicable,
under this subsection becomes effective as of the beginning of the
city's or town's next fiscal year.
Sec. 14A-1. JOINT CITY OR TOWN AND MEMBER CONTRIBUTION
INCREASES. (a) If at any time a qualified actuary [that meets the
requirements of Subdivision (1), Subsection (b), Section 10A of
this Act,] determines that the total contribution rate, expressed
as a percentage of wages, is insufficient to amortize the unfunded
actuarial accrued liability, as defined under the applicable
Governmental Accounting Standards Board Statement [No. 25], over a
30-year [40-year] period:
(1) the city's or town's governing body may increase
the city or town contribution rate; and
(2) to the extent that the city or town contribution
rate increases under Subdivision (1) of this subsection, the member
contribution rate must increase by an amount equal to the member
contribution rate before the increase multiplied by a fraction:
(A) the numerator of which is the increase in the
amount of the city or town contribution rate; and
(B) the denominator of which is the amount of the
city or town contribution rate before the increase.
(b) The sum of the city or town contribution rate and the
member contribution rate after an increase under this section may
not exceed the total contribution rate determined by the qualified
actuary to be necessary to amortize the unfunded actuarial accrued
liability over a 30-year [forty (40) year] period.
Sec. 14B. CITY OR TOWN AND MEMBER CONTRIBUTION DECREASES.
(a) If at any time a qualified actuary [that meets the requirements
of Section 10A(b)(1) of this Act] determines that the pension fund
has sufficient assets to have no [total contribution rate,
expressed as a percentage of wages, is sufficient to amortize the]
unfunded actuarial accrued liability, as defined under the
applicable Governmental Accounting Standards Board Statement
[No. 25, over a 25-year period]:
(1) the city's or town's governing body may decrease
the city or town contribution rate; and
(2) to the extent that the city or town contribution
rate decreases under Subdivision (1) of this subsection, the member
contribution rate must decrease by an amount equal to the member
contribution rate before the decrease multiplied by a fraction:
(A) the numerator of which is the decrease in the
amount of the city or town contribution rate; and
(B) the denominator of which is the amount of the
city or town contribution rate before the decrease.
(b) The sum of the city or town contribution rate and the
member contribution rate after a decrease under this section may
not be less than the total contribution rate, as determined by the
qualified actuary, required for the pension fund to have no [be
necessary to amortize the] unfunded actuarial accrued liability
[over a 25-year period].
SECTION 6. Section 14(b), Chapter 101 (H.B. 31), Acts of the
43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
Texas Civil Statutes), as added by this Act, applies to
contributions made to the pension fund subject to that section on or
after May 1, 2023.
SECTION 7. This Act takes effect September 1, 2025.