Texas 2025 - 89th Regular

Texas Senate Bill SB2318 Compare Versions

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1	1	89R8733 KFF-F
2	2	By: Menéndez S.B. No. 2318
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the administration of a retirement health care plan for
10	10	firefighters and police officers in certain municipalities.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 1.02, Chapter 1332 (S.B. 1568), Acts of
13	13	the 75th Legislature, Regular Session, 1997 (Article 6243q,
14	14	Vernon's Texas Civil Statutes), is amended by amending Subdivisions
15	15	(3), (8), and (8-a) and adding Subdivisions (4-a) and (6-b-1) to
16	16	read as follows:
17	17	(3) "Beneficiary" means a retiree, or the spouse or
18	18	other eligible dependent of a retiree, who is entitled to receive
19	19	retiree health benefits under Section 5.01 [5.01(a)] of this Act.
20	20	(4-a) "Default rate" means the actuarial assumed rate
21	21	of return as determined by the fund's actuary.
22	22	(6-b-1) "Months of service" means the number of full
23	23	months of service beginning on the date the firefighter or police
24	24	officer becomes a member of the fund until the date the firefighter
25	25	or police officer retires or otherwise terminates employment as a
26	26	firefighter or police officer, less the number of full months of
27	27	service during which the member:
28	28	(A) was engaged in active service with any
29	29	uniformed service of the United States and did not purchase credit
30	30	for that service in accordance with Section 4.023 of this Act; and
31	31	(B) took other unpaid leave, including unpaid
32	32	leave described by Section 4.024 of this Act, and did not purchase
33	33	credit for that leave in accordance with applicable law.
34	34	(8) "Retiree" means an individual who was a
35	35	firefighter or police officer who retired under the pension act
36	36	[whose retirement date is] after September 30, 1989.
37	37	(8-a) "Retiree health plan" means the group family
38	38	health plan for retirees and other beneficiaries:
39	39	(A) established under this Act; and
40	40	(B) in effect on October 1, 2025 [by the
41	41	collective bargaining agreements and the master contract
42	42	document].
43	43	SECTION 2. Section 1.05, Chapter 1332 (S.B. 1568), Acts of
44	44	the 75th Legislature, Regular Session, 1997 (Article 6243q,
45	45	Vernon's Texas Civil Statutes), is amended to read as follows:
46	46	Sec. 1.05. EXEMPTIONS. (a) The health benefits paid or
47	47	payable by the fund are exempt from garnishment, assignment,
48	48	attachment, judgments, other legal processes, and inheritance or
49	49	other taxes established by this state.
50	50	(b) Fund assets are exempt from attachment, execution,
51	51	alienation, and forced sale. A judgment lien or abstract of
52	52	judgment may not be filed or perfected against the fund on fund
53	53	assets. A judgment lien or abstract of judgment filed against the
54	54	fund on fund assets is void.
55	55	SECTION 3. Article 1, Chapter 1332 (S.B. 1568), Acts of the
56	56	75th Legislature, Regular Session, 1997 (Article 6243q, Vernon's
57	57	Texas Civil Statutes), is amended by adding Section 1.06 to read as
58	58	follows:
59	59	Sec. 1.06. CONSTRUCTION OF ACT. This Act does not provide
60	60	any benefit that is not specifically provided by this Act.
61	61	SECTION 4. Sections 2.01(a) and (c), Chapter 1332 (S.B.
62	62	1568), Acts of the 75th Legislature, Regular Session, 1997 (Article
63	63	6243q, Vernon's Texas Civil Statutes), are amended to read as
64	64	follows:
65	65	(a) The [firefighters' and police officers' retiree health
66	66	care] fund [of a municipality] is governed by a board of trustees
67	67	consisting of the following nine members:
68	68	(1) the mayor of the municipality to which this Act
69	69	applies or the mayor's designee;
70	70	(2) two members of the [municipal] governing body of
71	71	the municipality to which this Act applies, appointed by that
72	72	governing body;
73	73	(3) two members of the fund who are firefighters below
74	74	the rank of fire chief, elected by secret ballot by a majority of
75	75	the votes cast by the members of the fund who are firefighters;
76	76	(4) two members of the fund who are police officers
77	77	below the rank of police chief, elected by secret ballot by a
78	78	majority of the votes cast by the members of the fund who are police
79	79	officers;
80	80	(5) a retiree representative of the fire department,
81	81	elected by secret ballot by a majority of the votes cast by the
82	82	retirees of the fire department who are beneficiaries of the fund
83	83	and the surviving spouses of deceased firefighters who are
84	84	beneficiaries of the fund; and
85	85	(6) a retiree representative of the police department,
86	86	elected by secret ballot by a majority of the votes cast by the
87	87	retirees of the police department who are beneficiaries of the fund
88	88	and the surviving spouses of deceased police officers who are
89	89	beneficiaries of the fund.
90	90	(c) The fund is independent of the control of the
91	91	municipality to which this Act applies.
92	92	SECTION 5. Sections 2.02(b), (c), and (d), Chapter 1332
93	93	(S.B. 1568), Acts of the 75th Legislature, Regular Session, 1997
94	94	(Article 6243q, Vernon's Texas Civil Statutes), are amended to read
95	95	as follows:
96	96	(b) The two members of the [municipal] governing body of the
97	97	municipality to which this Act applies serve on the board for the
98	98	term of the office to which they were elected or appointed, provided
99	99	that the term of the member on the board expires on the day the
100	100	member ceases to be a member of the governing body for any reason.
101	101	(c) The two members of the board [fund] who are firefighters
102	102	below the rank of fire chief serve on the board for staggered
103	103	four-year terms, with one member's term expiring every two years.
104	104	(d) The two members of the board [fund] who are police
105	105	officers below the rank of police chief serve on the board for
106	106	staggered four-year terms, with one member's term expiring every
107	107	two years.
108	108	SECTION 6. Section 2.04(b), Chapter 1332 (S.B. 1568), Acts
109	109	of the 75th Legislature, Regular Session, 1997 (Article 6243q,
110	110	Vernon's Texas Civil Statutes), is amended to read as follows:
111	111	(b) The board in its discretion may elect other officers of
112	112	the board. [An officer may be, but is not required to be, a
113	113	trustee.]
114	114	SECTION 7. Section 3.01(a), Chapter 1332 (S.B. 1568), Acts
115	115	of the 75th Legislature, Regular Session, 1997 (Article 6243q,
116	116	Vernon's Texas Civil Statutes), is amended to read as follows:
117	117	(a) The board has complete authority and power to:
118	118	(1) administer the fund for the exclusive benefit of
119	119	the beneficiaries of the fund;
120	120	(2) disburse benefits or otherwise order payments from
121	121	the fund;
122	122	(3) independently control the fund; and
123	123	(4) conduct all litigation on behalf of the fund.
124	124	SECTION 8. Section 4.02, Chapter 1332 (S.B. 1568), Acts of
125	125	the 75th Legislature, Regular Session, 1997 (Article 6243q,
126	126	Vernon's Texas Civil Statutes), is amended by amending Subsections
127	127	(c), (d), and (e) and adding Subsections (d-1), (d-2), (d-3), and
128	128	(d-4) to read as follows:
129	129	(c) Subject to Subsection (d-2) or (e) of this section, to
130	130	be eligible for health benefits under Section 5.01 of this Act, a
131	131	service retiree or disability retiree who retired or retires with
132	132	less than 360 months [30 years] of service, or the retiree's
133	133	surviving spouse in the case of a deceased retiree, shall continue
134	134	to make monthly contributions in accordance with Subsections
135	135	[Subsection] (d) and (d-1) of this section to the fund after the
136	136	date of the retiree's retirement for the lesser of:
137	137	(1) the period in full months preceding the date the
138	138	retiree becomes or would have become eligible for federal Medicare
139	139	coverage; or
140	140	(2) the period equal to 360 months [30 years] less the
141	141	retiree's months [years] of service achieved on the date of the
142	142	retiree's retirement.
143	143	(d) The monthly [pension fund shall deduct the]
144	144	contribution amount required under Subsection (c) of this section
145	145	[from the monthly retirement benefit payment or death benefit
146	146	payment paid to each retiree or retiree's spouse required to make
147	147	the contributions, excluding payments made by the pension fund
148	148	under Section 6.12 of the pension act. The pension fund shall
149	149	deduct an amount equal to the retiree contribution amount
150	150	applicable to the fiscal year in which the benefit payment occurs.
151	151	The retiree contribution amount] applicable to a fiscal year equals
152	152	an [the] amount obtained by:
153	153	(1) multiplying the average member salary for the
154	154	preceding fiscal year by a percentage equal to 100 percent plus the
155	155	estimated percentage increase in the annual member payroll from the
156	156	preceding fiscal year to the fiscal year as determined by the
157	157	actuary;
158	158	(2) multiplying the product computed under
159	159	Subdivision (1) of this subsection by the percentage applicable to
160	160	the fiscal year as provided by Subsection (b) of this section; and
161	161	(3) dividing the product computed under Subdivision
162	162	(2) of this subsection by 12.
163	163	(d-1) Monthly contributions under Subsection (c) of this
164	164	section shall be made on or before the last day of each month during
165	165	the period the contributions are required to be made, beginning on
166	166	the first month immediately following the month in which the
167	167	retiree retires. Any required contribution that is not made to the
168	168	fund on or before the due date shall bear interest at the default
169	169	rate in effect on the first day of the month in which the
170	170	contribution is due until the contribution is paid.
171	171	(d-2) Instead of the monthly contributions required under
172	172	Subsection (c) of this section, a retiree, or the retiree's
173	173	surviving spouse in the case of a deceased retiree, may elect to pay
174	174	to the fund a lump-sum payment equal to the monthly retiree
175	175	contribution amount under Subsection (d) of this section in effect
176	176	on the date of the retiree's retirement multiplied by the lesser of:
177	177	(1) the number of full months in the period:
178	178	(A) beginning on the retiree's date of
179	179	retirement; and
180	180	(B) ending on the date the retiree will attain or
181	181	would have attained 65 years of age; or
182	182	(2) the number of full months following the date of the
183	183	retiree's retirement which, when added to the retiree's months of
184	184	service as of the date of retirement, equals:
185	185	(A) 360 months; or
186	186	(B) if subject to Subsection (e) of this section,
187	187	120 months.
188	188	(d-3) An election under Subsection (d-2) of this section:
189	189	(1) must be:
190	190	(A) in writing and made in the form and manner
191	191	prescribed by the board; and
192	192	(B) made before making a lump-sum payment under
193	193	that subsection; and
194	194	(2) is irrevocable.
195	195	(d-4) A lump-sum payment to the fund under Subsection (d-2)
196	196	of this section:
197	197	(1) must be made in full on or before the 30th day
198	198	after the date of the retiree's retirement; and
199	199	(2) is not partially or wholly refundable.
200	200	(e) A retiree who retired under the pension act as a result
201	201	of a disability, or the disability retiree's surviving spouse in
202	202	the case of a deceased disability retiree, is not required to make
203	203	contributions under Subsection (c) of this section for more than
204	204	120 months [10 years] following the date of the disability
205	205	retiree's retirement.
206	206	SECTION 9. Section 4.022, Chapter 1332 (S.B. 1568), Acts of
207	207	the 75th Legislature, Regular Session, 1997 (Article 6243q,
208	208	Vernon's Texas Civil Statutes), is amended by adding Subsection (d)
209	209	to read as follows:
210	210	(d) The increases in maximum deductibles and maximum
211	211	out-of-pocket payments required under Subsection (a)(2) of this
212	212	section are in addition to the increases required under Section
213	213	5.01 of this Act.
214	214	SECTION 10. Sections 4.023(a), (b), (c), (d), and (f),
215	215	Chapter 1332 (S.B. 1568), Acts of the 75th Legislature, Regular
216	216	Session, 1997 (Article 6243q, Vernon's Texas Civil Statutes), are
217	217	amended to read as follows:
218	218	(a) A member of the fund who enters any uniformed service of
219	219	the United States may not:
220	220	(1) be required to make the contributions [monthly
221	221	payments into the fund as] required by Section 4.02(a) of this Act
222	222	while the member is engaged in active service with the uniformed
223	223	service; or
224	224	(2) lose any seniority rights or retirement benefits
225	225	provided by this Act because of that service.
226	226	(b) A [Not later than the 90th day after the date of the
227	227	member's reinstatement to an active status in a fire or police
228	228	department, the] member may establish credit for service not
229	229	established during the period the member was in active service with
230	230	the uniformed service by paying [shall file with the secretary of
231	231	the board a written statement of intent to pay] into the fund an
232	232	amount equal to the amount the member would have paid during that
233	233	period if the member had remained on active status in the fire or
234	234	police department [during the period of the member's absence while
235	235	in the uniformed service].
236	236	(c) The member shall make the payment described by
237	237	Subsection (b) of this section in full within a period after the
238	238	member's return to active status in the fire or police department
239	239	that is equal to three times the amount of time the member was
240	240	engaged in active service with the uniformed service [absent],
241	241	except that the maximum period for payment may not exceed five
242	242	years.
243	243	(d) If the member does not comply with Subsections (b) and
244	244	(c) of this section, the member loses all credit toward the member's
245	245	months [years] of service for the length of time the member was
246	246	engaged in active service in any uniformed service.
247	247	(f) If the member complies with this section and makes all
248	248	required payments, a municipality to which this Act applies shall
249	249	make payment to the fund in an amount equal to the amount the
250	250	municipality would have paid if the member had remained on active
251	251	status in the fire or police department during the member's absence
252	252	while in the uniformed service.
253	253	SECTION 11. Article 4, Chapter 1332 (S.B. 1568), Acts of the
254	254	75th Legislature, Regular Session, 1997 (Article 6243q, Vernon's
255	255	Texas Civil Statutes), is amended by adding Sections 4.024 and
256	256	4.025 to read as follows:
257	257	Sec. 4.024. FAMILY AND MEDICAL LEAVE. (a) If a member
258	258	takes unpaid leave as provided by the Family and Medical Leave Act
259	259	of 1993 (29 U.S.C. Section 2601 et seq.), that member may elect to
260	260	establish credit for the leave by making voluntary member
261	261	contributions to the fund for the entire period the member is on
262	262	leave in an amount equal to the amount the member would have paid
263	263	had the member not taken the leave. The contributions must be paid
264	264	to the fund not later than the 30th day after the date the member
265	265	returns from that leave.
266	266	(b) If a member elects to make voluntary member
267	267	contributions under Subsection (a) of this section, the fund shall
268	268	notify the municipality and the municipality shall make payment to
269	269	the fund in an amount equal to the total municipal contribution
270	270	amount the municipality would have paid if the member had not taken
271	271	the leave, and that payment must be made not later than the 60th day
272	272	after the date the member returns from leave.
273	273	(c) If a member does not make the member contributions
274	274	required within the time prescribed under Subsection (a) of this
275	275	section, the member may not receive credit toward the member's
276	276	months of service for the period the member was on unpaid leave.
277	277	Sec. 4.025. MEMBERS WHO ARE MARRIED: CONDITIONAL WAIVER OF
278	278	ELIGIBILITY. (a) If spouses are formally married to each other
279	279	under Chapter 2, Family Code, and are both members of the fund, on
280	280	the retirement under the pension act of the first of the couple to
281	281	retire, that retiree may, not later than the 30th day after the
282	282	retiree's retirement date, elect to conditionally waive
283	283	eligibility for health and medical benefits under this Act by
284	284	submitting to the fund written confirmation of that election in the
285	285	form and manner prescribed by the board.
286	286	(b) Subject to Subsection (c) of this section, a retiree who
287	287	conditionally waives eligibility under Subsection (a) of this
288	288	section is not required to make contributions to the fund under
289	289	Section 4.02(c) of this Act following the date the election under
290	290	Subsection (a) of this section is submitted to and accepted by the
291	291	fund.
292	292	(c) Subject to Subsection (d) of this section, if the
293	293	marriage of a retiree who has conditionally waived eligibility for
294	294	benefits under Subsection (a) of this section is dissolved, the
295	295	retiree may, not later than the 30th day after the date of the
296	296	dissolution of the marriage, elect to reinstate eligibility for
297	297	health and medical benefits under this Act by submitting to the fund
298	298	written confirmation of the election in the form and manner
299	299	prescribed by the board.
300	300	(d) A retiree who makes an election to reinstate eligibility
301	301	for health and medical benefits under Subsection (c) of this
302	302	section is only eligible for those benefits if the retiree makes the
303	303	monthly contributions required under Section 4.02(c) of this Act in
304	304	the amount applicable under Section 4.02(d) of this Act in the
305	305	fiscal year in which the contribution is made. The initial
306	306	contribution is due on the last day of the month immediately
307	307	following the month in which the election is submitted to and
308	308	accepted by the fund.
309	309	SECTION 12. Section 5.01, Chapter 1332 (S.B. 1568), Acts of
310	310	the 75th Legislature, Regular Session, 1997 (Article 6243q,
311	311	Vernon's Texas Civil Statutes), is amended by amending Subsections
312	312	(d) and (e) and adding Subsections (d-1), (i), (j), (k), and (l) to
313	313	read as follows:
314	314	(d) Except as provided by Subsection (d-1) of this section,
315	315	the [The] board as it considers appropriate may modify the retiree
316	316	health plan if the modifications adopted at any regular or special
317	317	meeting of the board do not, in the aggregate, increase the fund's
318	318	total actuarial unfunded liability, as determined by the actuary.
319	319	The board has exclusive authority to modify the retiree health
320	320	plan.
321	321	(d-1) The board may modify the retiree health plan to allow
322	322	a surviving spouse of a deceased retiree to continue to be eligible
323	323	for coverage under the retiree health plan after the spouse's
324	324	remarriage regardless of whether that modification increases the
325	325	fund's total actuarial unfunded liability.
326	326	(e) The board may discontinue benefits under this section
327	327	for any person who does not make the monthly contributions required
328	328	by Section 4.02(c) or (e) [Section 4.02] of this Act, as applicable,
329	329	within the time prescribed by Section 4.02(d-1) of this Act.
330	330	(i) Increases in maximum deductibles and maximum
331	331	out-of-pocket payments required under this section are in addition
332	332	to the increases required under Section 4.022(a)(2) of this Act.
333	333	(j) The board may require the payment of a premium for
334	334	coverage of dependent children under the retiree health plan.
335	335	(k) Any person entitled to receive health and medical
336	336	benefits under this Act may unconditionally waive their rights to
337	337	receive those benefits by executing and delivering to the fund a
338	338	waiver of their rights in the form and manner prescribed by the
339	339	board. A person who waives their rights to receive benefits under
340	340	this subsection is no longer under any circumstances entitled to
341	341	receive benefits under this Act.
342	342	(l) Health and medical benefits provided by the fund under
343	343	this Act or which may be provided by the fund under this Act do not
344	344	constitute divisible marital property.
345	345	SECTION 13. Section 6.04(c), Chapter 1332 (S.B. 1568), Acts
346	346	of the 75th Legislature, Regular Session, 1997 (Article 6243q,
347	347	Vernon's Texas Civil Statutes), is amended to read as follows:
348	348	(c) The board may directly manage investments of the reserve
349	349	funds or may choose to contract for professional management
350	350	services. If the fund owns or anticipates owning [funds own] real
351	351	estate, the board may, at its discretion, establish an organization
352	352	described by Section 501(c)(2) or 501(c)(25), Internal Revenue Code
353	353	of 1986, as amended, to hold title to the real estate.
354	354	SECTION 14. Section 6.05(a), Chapter 1332 (S.B. 1568), Acts
355	355	of the 75th Legislature, Regular Session, 1997 (Article 6243q,
356	356	Vernon's Texas Civil Statutes), is amended to read as follows:
357	357	(a) The board may authorize and direct one or more board
358	358	members or officers of the fund to enter into contracts on behalf of
359	359	the fund for the provision of professional services, including
360	360	contracts with [contract for] professional investment managers
361	361	[management services], financial consultants, independent
362	362	auditors, third-party administrators, preferred providers, health
363	363	maintenance organizations, attorneys, and actuaries. The [Only
364	364	the] board has the exclusive power to authorize the execution of the
365	365	[may enter into those] contracts and[. The board] may establish a
366	366	reasonable fee for compensation under the [those] contracts.
367	367	SECTION 15. Section 7.01(b), Chapter 1332 (S.B. 1568), Acts
368	368	of the 75th Legislature, Regular Session, 1997 (Article 6243q,
369	369	Vernon's Texas Civil Statutes), is amended to read as follows:
370	370	(b) To implement Subsection (a) of this section and to
371	371	strengthen the faith and confidence of the members and
372	372	beneficiaries of the fund, the board shall develop standards of
373	373	conduct and financial disclosure requirements to be observed by
374	374	each member of the board [trustee] and by the executive director in
375	375	the performance of the board members' [board's] and executive
376	376	director's official duties.
377	377	SECTION 16. Sections 1.02(4), (6-a), and (10) and 5.01(c),
378	378	Chapter 1332 (S.B. 1568), Acts of the 75th Legislature, Regular
379	379	Session, 1997 (Article 6243q, Vernon's Texas Civil Statutes), are
380	380	repealed.
381	381	SECTION 17. Section 4.02(d-2), Chapter 1332 (S.B. 1568),
382	382	Acts of the 75th Legislature, Regular Session, 1997 (Article 6243q,
383	383	Vernon's Texas Civil Statutes), as added by this Act, applies only
384	384	to or with respect to a member who retires on or after October 1,
385	385	2025.
386	386	SECTION 18. Section 5.01(d-1), Chapter 1332 (S.B. 1568),
387	387	Acts of the 75th Legislature, Regular Session, 1997 (Article 6243q,
388	388	Vernon's Texas Civil Statutes), as added by this Act, applies only
389	389	to a surviving spouse whose remarriage occurs on or after October 1,
390	390	2025.
391	391	SECTION 19. This Act takes effect October 1, 2025.