Texas 2025 - 89th Regular

Texas House Bill HB4609 Compare Versions

Only one version of the bill is available at this time.

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1	1	89R11155 RDR-F
2	2	By: Dean H.B. No. 4609
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to participation in, administration of, contributions to,
10	10	and benefits under the Texas Municipal Retirement System.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter A, Chapter 851, Government Code, is
13	13	amended by adding Section 851.0051 to read as follows:
14	14	Sec. 851.0051. VENUE. (a) The venue of any action brought
15	15	against the retirement system is in Travis County. A hearing held by
16	16	the State Office of Administrative Hearings in which the retirement
17	17	system is a party must be held in Travis County.
18	18	(b) The venue of any action brought in a state court by the
19	19	retirement system is in Travis County or in the county in which the
20	20	defendant is situated, domiciled, or does business.
21	21	SECTION 2. Section 852.001(c), Government Code, is amended
22	22	to read as follows:
23	23	(c) A department begins participation in the retirement
24	24	system on the first day of the first [second] month after the month
25	25	the retirement system [board of trustees] receives notice of an
26	26	election to participate.
27	27	SECTION 3. Section 852.105(b), Government Code, is amended
28	28	to read as follows:
29	29	(b) A governing body may not adopt an ordinance under this
30	30	section unless the actuary first determines, on the basis of
31	31	mortality and other tables adopted by the board of trustees, that
32	32	all obligations of the municipality to the benefit accumulation
33	33	fund, including obligations proposed under the ordinance, can be
34	34	funded by the municipality [within its maximum contribution rate
35	35	and] within its amortization period.
36	36	SECTION 4. Sections 853.003(a), (b), and (e), Government
37	37	Code, are amended to read as follows:
38	38	(a) An eligible member who has withdrawn contributions and
39	39	canceled credited service in the retirement system may reestablish
40	40	the canceled credit in the system if the governing body of the
41	41	municipality that [currently] employs the member by ordinance
42	42	authorizes reestablishment of the credit by eligible employee
43	43	members.
44	44	(b) A member eligible to reestablish credit under this
45	45	section is one who:
46	46	(1) has, since resuming membership, at least 24
47	47	consecutive months of credited service as an employee of the
48	48	municipality for which the ordinance was adopted; and
49	49	(2) is an employee of the municipality on the
50	50	effective date of the ordinance.
51	51	(e) A governing body may not adopt an ordinance under
52	52	Subsection (a) unless the actuary first determines that all
53	53	obligations charged against the municipality's account in the
54	54	benefit accumulation fund, including the obligations proposed in
55	55	the ordinance, can be funded by the municipality within its
56	56	[maximum contribution rate and within its] amortization period. An
57	57	ordinance adopted under Subsection (a) takes effect January 1 of
58	58	the year that first occurs after the date the retirement system
59	59	receives the adopted ordinance.
60	60	SECTION 5. Section 853.305(g), Government Code, is amended
61	61	to read as follows:
62	62	(g) An ordinance adopted under this section applies to the
63	63	granting of restricted prior service credit to a member who is or
64	64	has been an employee of the authorizing municipality at any time on
65	65	or after the effective date of the ordinance. An ordinance adopted
66	66	under this section takes effect January 1 of the year that first
67	67	occurs after the date the retirement system receives the adopted
68	68	ordinance.
69	69	SECTION 6. Section 853.403(a), Government Code, is amended
70	70	to read as follows:
71	71	(a) An ordinance adopted under Section 853.401 may not take
72	72	effect unless the board of trustees approves the ordinance as
73	73	meeting the requirements of this section. The board may not approve
74	74	an ordinance unless the actuary first determines, and the board
75	75	concurs in the determination, that all obligations charged against
76	76	the municipality's account in the benefit accumulation fund,
77	77	including obligations proposed in the ordinance, can be funded by
78	78	the municipality within its [maximum total contribution rate and
79	79	within its] amortization period as in effect on the date the updated
80	80	service credits take effect.
81	81	SECTION 7. Sections 853.404(d), (f), and (f-1), Government
82	82	Code, are amended to read as follows:
83	83	(d) Except as provided by Subsection (e), an ordinance under
84	84	this section continues in effect for each year that the actuary
85	85	determines that all obligations charged against the municipality's
86	86	account in the benefit accumulation fund, including the obligations
87	87	to become effective the next January 1, can be funded by the
88	88	municipality within its [maximum contribution rate and within its]
89	89	amortization period as in effect on the next January 1. An
90	90	ordinance under this section will cease to be in effect for future
91	91	years if the actuary cannot make that determination, but shall
92	92	again take effect for future years beginning January 1 of the first
93	93	year after the actuary can make that determination.
94	94	(f) Subject to Subsection (f-1) and notwithstanding
95	95	conflicting provisions of Subsection (c) or Section 854.203, the
96	96	governing body of a participating municipality that adopts an
97	97	ordinance under Section 854.203 providing for increased annuities
98	98	effective on or after January 1, [of 2024, 2025, or] 2026, may elect
99	99	to compute the annuity increase, to be effective on a one-year basis
100	100	or, in accordance with Subsection (c), on a repeating basis
101	101	[including an annual annuity increase authorized under Subsection
102	102	(c)], as the sum of prior and current service annuities, as
103	103	increased in subsequent years under Section 854.203 or Subsection
104	104	(c), of the person on whose service the annuities are based on the
105	105	effective date of the annuity increase, multiplied by:
106	106	(1) the percentage change in the Consumer Price Index
107	107	for All Urban Consumers, published by the Bureau of Labor
108	108	Statistics of the United States Department of Labor, during the
109	109	12-month period ending in December of the year that is 13 months
110	110	before the effective date of the ordinance providing the increase;
111	111	and
112	112	(2) 30 percent, 40 percent, 50 percent, 60 percent, or
113	113	70 percent, as specified by the governing body in the ordinance.
114	114	(f-1) Subsection (f) applies only with respect to[:
115	115	[(1) a participating municipality that as of January
116	116	1, 2023:
117	117	[(A) does not provide by ordinance an annual
118	118	annuity increase under Subsection (c) because the municipality:
119	119	[(i) passed an ordinance before January 1,
120	120	2023, that rescinded a previous ordinance authorizing annual
121	121	increases under Subsection (c); or
122	122	[(ii) has not passed an ordinance
123	123	authorizing annual increases under Subsection (c); or
124	124	[(B) does provide by ordinance an annual annuity
125	125	increase under Subsection (c) if the governing body of the
126	126	municipality elects to provide increased annuities recomputed in
127	127	accordance with Subsection (f) for purposes of maintaining or
128	128	increasing the amount of the annuity increase otherwise authorized
129	129	by the ordinance; and
130	130	[(2)] the annuity of:
131	131	(1) [(A)] a retiree who retired not later than the
132	132	last day of December of the year that is 13 months before the
133	133	effective date of the ordinance providing an annual [the] increase
134	134	under Subsection (c); or
135	135	(2) [(B)] a beneficiary of a deceased retiree whose
136	136	death occurred not later than the last day of December of the year
137	137	that is 13 months before the effective date of the ordinance
138	138	providing an annual [the] increase under Subsection (c).
139	139	SECTION 8. Section 853.502, Government Code, is amended by
140	140	adding Subsection (c) to read as follows:
141	141	(c) An ordinance adopted under this section takes effect
142	142	January 1 of the year that first occurs after the date the
143	143	retirement system receives the adopted ordinance.
144	144	SECTION 9. Section 854.106(a), Government Code, is amended
145	145	to read as follows:
146	146	(a) If a surviving spouse, or the executor or administrator
147	147	of a member's estate, would be entitled to make an election under
148	148	Section 854.105 because of the death of the member, the heirs of the
149	149	deceased member may make that election if:
150	150	(1) no surviving spouse exists;
151	151	(2) no petition for the appointment of a personal
152	152	representative of the member is pending or has been granted;
153	153	(3) 30 days have elapsed since the death of the member;
154	154	(4) the value of the entire assets of the member's
155	155	estate, excluding homestead and exempt property, does not exceed
156	156	the amount for which a small estate affidavit may be approved in
157	157	accordance with Chapter 205, Estates Code [$50,000]; and
158	158	(5) [there are not more than three heirs; and
159	159	[(6)] on file with the retirement system is a
160	160	certified copy of a small estate [estates] affidavit that has been
161	161	approved and filed in accordance with Chapter 205, Estates Code, or
162	162	an original affidavit as described by Subsection (b).
163	163	SECTION 10. Section 854.201(c), Government Code, is amended
164	164	to read as follows:
165	165	(c) A governing body may not adopt an ordinance under this
166	166	section unless the actuary first determines that all obligations
167	167	charged against the municipality's account in the benefit
168	168	accumulation fund, including the obligations proposed in the
169	169	ordinance, can be funded by the municipality within its [maximum
170	170	contribution rate and within its] amortization period.
171	171	SECTION 11. Sections 854.202(d) and (e), Government Code,
172	172	are amended to read as follows:
173	173	(d) An ordinance adopted under this section must also
174	174	include the provisions specified in Section 852.105. A governing
175	175	body may not adopt an ordinance under this section unless the
176	176	actuary first determines, on the basis of mortality and other
177	177	tables adopted by the board of trustees, that all obligations of the
178	178	municipality to the benefit accumulation fund, including
179	179	obligations proposed under the ordinance, can be funded by the
180	180	municipality within its [maximum contribution rate and within its]
181	181	amortization period.
182	182	(e) The governing body shall specify the effective date of
183	183	an ordinance under this section, which may be January 1 [the first
184	184	day] of any year [month] after the date [month in which] the actuary
185	185	makes the determination required by Subsection (d).
186	186	SECTION 12. Sections 854.203(b) and (g), Government Code,
187	187	are amended to read as follows:
188	188	(b) The amount of annuity increase under this section is
189	189	computed as the sum of the prior and current service annuities on
190	190	the effective date of retirement of the person on whose service the
191	191	annuities are based, multiplied by:
192	192	(1) the percentage change in the Consumer Price Index
193	193	for All Urban Consumers, published by the Bureau of Labor
194	194	Statistics of the United States Department of Labor, from December
195	195	of the year immediately preceding the effective date of the
196	196	person's retirement to the December that is 13 months before the
197	197	effective date of the ordinance providing the increase; and
198	198	(2) 30 percent, 40 percent, 50 percent, 60 percent, or
199	199	70 percent, as specified by the governing body in the ordinance[,
200	200	except that if the governing body has specified a different
201	201	percentage in an ordinance adopted under Section 853.404(c) and in
202	202	effect on December 31, 1999, the percentage used in computing
203	203	annuity increases for retirees of that municipality remains in
204	204	effect until changed or discontinued under Section 853.404].
205	205	(g) An ordinance under this section may not take effect
206	206	until it is approved by the board of trustees as meeting the
207	207	requirements of this section. The board may not approve an
208	208	ordinance unless the actuary first determines that all obligations
209	209	charged against the municipality's account in the benefit
210	210	accumulation fund, including the obligations proposed in the
211	211	ordinance, can be funded by the municipality within its [maximum
212	212	contribution rate and within its] amortization period as in effect
213	213	on the effective date of the increases.
214	214	SECTION 13. Section 854.205(a), Government Code, is amended
215	215	to read as follows:
216	216	(a) This section applies to each municipality unless the
217	217	municipality's governing board files with the retirement system
218	218	[board of trustees] before December 31, 2001, an election to not
219	219	provide for five-year vesting. A governing board that elects to not
220	220	provide five-year vesting may revoke that election by sending
221	221	notice to the retirement system [board of trustees] to provide for
222	222	five-year vesting. A revocation election under this subsection
223	223	takes effect January 1 of the year that first occurs after the date
224	224	the retirement system receives the notice.
225	225	SECTION 14. Section 854.405(b), Government Code, is amended
226	226	to read as follows:
227	227	(b) A governing body may not adopt an ordinance under this
228	228	section unless the actuary first determines, on the basis of
229	229	mortality and other tables adopted by the board of trustees, that
230	230	all obligations of the municipality to the benefit accumulation
231	231	fund, including obligations proposed under the ordinance, can be
232	232	funded by the municipality within its [maximum contribution rate
233	233	and within its] amortization period.
234	234	SECTION 15. Section 855.401, Government Code, is amended by
235	235	adding Subsection (e) to read as follows:
236	236	(e) Unless adopted as part of an election to participate in
237	237	the retirement system under Section 852.001, an ordinance adopted
238	238	to increase the member contribution rate under Subsection (b) takes
239	239	effect January 1 of the year that first occurs after the date the
240	240	retirement system receives the adopted ordinance.
241	241	SECTION 16. Section 855.402(k), Government Code, is amended
242	242	to read as follows:
243	243	(k) Contributions picked up as provided by Subsection (j)
244	244	shall be treated as employer contributions in determining tax
245	245	treatment of the amounts under the United States Internal Revenue
246	246	Code; however, each participating municipality shall continue to
247	247	withhold federal income taxes based upon these contributions until
248	248	the Internal Revenue Service determines or the federal courts rule
249	249	that pursuant to Section 414(h) of the Internal Revenue Code of 1986
250	250	(26 U.S.C. Section 414), these picked-up contributions are not
251	251	included as gross income of the employee until such time as they are
252	252	distributed or made available. Employee contributions that are
253	253	picked up as above provided shall be deposited to the individual
254	254	account of the member and shall be treated for all other purposes of
255	255	this subtitle in the same manner and with like effect as if the
256	256	amount had been deducted from the compensation of the employee
257	257	pursuant to Sections 855.401 and 855.402(a) through (h); and
258	258	picked-up contributions may not be included in calculating the
259	259	[limitations on municipality] contribution rates under any
260	260	[prescribed by Section 855.407 or] other provisions of this
261	261	subtitle.
262	262	SECTION 17. The heading to Section 855.407, Government
263	263	Code, is amended to read as follows:
264	264	Sec. 855.407. [LIMITATION ON] MUNICIPALITY CONTRIBUTION
265	265	RATES.
266	266	SECTION 18. Sections 855.407(b) and (g), Government Code,
267	267	are amended to read as follows:
268	268	(b) The actuary annually shall determine the municipality
269	269	normal contribution rate and the prior service contribution rate
270	270	from the most recent data available at the time of the
271	271	determination. Before January 1 of each year, the board of trustees
272	272	shall certify the rates to each participating municipality. [If a
273	273	participating municipality has different rates of contribution for
274	274	employees of different departments, the actuary shall determine the
275	275	maximum rate for the municipality using the average rate of
276	276	contribution prescribed for contributions of employees of its
277	277	participating departments. To compute the average rate the actuary
278	278	shall consider the number of employees in each participating
279	279	department of the municipality.]
280	280	(g) Except as provided by Subsections (h) and (i), a
281	281	participating [A] municipality [that begins participation in the
282	282	retirement system on or after December 31, 1999, and any
283	283	municipality already participating in the retirement system on that
284	284	date whose governing body elects to have the municipality do so]
285	285	shall contribute to its account in the benefit accumulation fund at
286	286	the combined rate of total compensation paid to its employees as the
287	287	actuary determines is necessary to fund all obligations chargeable
288	288	to its account in the fund within the municipality's amortization
289	289	period[, regardless of other provisions of this subtitle].
290	290	SECTION 19. Section 855.501(e), Government Code, is amended
291	291	to read as follows:
292	292	(e) A participating municipality electing to provide an
293	293	increased current service annuity reserve and electing a
294	294	contribution rate of either 150 percent for a year or 200 percent
295	295	for a year is liable for total contributions at a rate determined by
296	296	the actuary [that does not exceed a rate equal to the maximum rate
297	297	prescribed for the municipality by Section 855.407, plus two
298	298	percent a year. A municipality electing a rate of 200 percent a
299	299	year is liable for contributions at a rate that does not exceed a
300	300	rate equal to the maximum rate prescribed for the municipality by
301	301	Section 855.407, plus four percent a year].
302	302	SECTION 20. The following provisions of the Government Code
303	303	are repealed:
304	304	(1) Section 854.203(h);
305	305	(2) Section 855.4065(b);
306	306	(3) Sections 855.407(a), (c), (e), and (f);
307	307	(4) Section 855.408(b); and
308	308	(5) Sections 855.501(i) and (j).
309	309	SECTION 21. This Act takes effect September 1, 2025.