H.B. No. 2427
 
 
 
 
AN ACT
  relating to the continuation and functions of the Teacher
  Retirement System of Texas; providing penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 824.302, Government Code, is amended to
  read as follows:
         Sec. 824.302.  ELIGIBILITY FOR DISABILITY RETIREMENT.  
  Subject to Section 824.310, a [A] member is eligible to retire and
  receive a disability retirement annuity if the member:
               (1)  is mentally or physically disabled from the
  further performance of duty; and
               (2)  has a [the] disability that is probably permanent.
         SECTION 2.  Sections 824.304(a), (b), and (d), Government
  Code, are amended to read as follows:
         (a)  Subject to Section 824.310, if [If] a member has a total
  of less than 10 years of service credit in the retirement system on
  the date of disability retirement, the retirement system shall pay
  the person a disability retirement annuity of $150 a month for the
  shortest of the following periods:
               (1)  the duration of the disability;
               (2)  the number of months of creditable service the
  person has at retirement; or
               (3)  the duration of the person's life.
         (b)  Subject to Section 824.310, if [If] a member has a total
  of at least 10 years of service credit in the retirement system on
  the date of disability retirement, the retirement system shall pay
  the person for the duration of the disability a disability
  retirement annuity in an amount equal to the greater of:
               (1)  a standard service retirement annuity computed
  under Section 824.203; or
               (2)  $150 a month.
         (d)  The minimum benefits provided by this section are
  subject to reduction under rules adopted under Section 824.310 and
  are also subject to reduction in the same manner as other benefits
  because of the selection of an optional retirement annuity.
         SECTION 3.  Section 824.308(b), Government Code, is amended
  to read as follows:
         (b)  An optional disability retirement annuity is an annuity
  payable throughout the disability of the disability retiree and is
  actuarially reduced from the annuity otherwise payable under
  Section 824.304(b), after any reduction under rules adopted under
  Section 824.310, to its actuarial equivalent under the option
  selected under Subsection (c).
         SECTION 4.  Subchapter D, Chapter 824, Government Code, is
  amended by adding Section 824.310 to read as follows:
         Sec. 824.310.  PURPOSE OF DISABILITY BENEFIT; LIMIT ON
  SUPPLEMENTAL INCOME.  (a)  The purpose of a disability retirement
  annuity paid under this subchapter is to lessen the financial
  hardships faced by a member with a disability.
         (b)  The board of trustees shall adopt rules under which the
  disability retirement annuity paid to a disability retiree under
  this subchapter is reduced on a sliding-scale basis or is suspended
  for a period in which the compensation earned by the retiree for
  work performed in a 12-month period during the disability
  retirement, as determined under the rules of the board of trustees,
  exceeds the compensation earned by the retiree during the 12-month
  period in which the retiree earned the highest compensation for
  actual service as a member of the retirement system. 
         (c)  The rules adopted under Subsection (b) must provide for
  the partial or full reinstatement of a disability retirement
  annuity that is reduced or suspended if the compensation earned by
  the retiree for work performed during the disability retirement is
  reduced or suspended.
         (d)  The board of trustees by rule shall require a disability
  retiree to report to the board the amount of compensation earned by
  the disability retiree that exceeds the amount established by the
  board by rule for work performed during the disability.
         SECTION 5.  Sections 825.0032(c) and (e), Government Code,
  are amended to read as follows:
         (c)  A person [paid officer, employee, or consultant of a
  Texas trade association in the field of investment or insurance]
  may not be a trustee or an employee of the retirement system
  employed in a "bona fide executive, administrative, or professional
  capacity," as that phrase is used for purposes of establishing an
  exemption to the overtime provisions of the federal Fair Labor
  Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if:
               (1)  the person is a paid officer, employee, or
  consultant of a Texas trade association in the field of investment
  or insurance; or
               (2)  the person's spouse is a paid officer, employee, or
  consultant of a Texas trade association in the field of investment
  or insurance [who is exempt from the state's position
  classification plan or is compensated at or above the amount
  prescribed by the General Appropriations Act for step 1, salary
  group 17, of the position classification salary schedule].
         (e)  In [For the purposes of] this section, a Texas trade
  association means [is] a [nonprofit,] cooperative[,] and
  voluntarily joined association of business or professional
  competitors in this state designed to assist its members and its
  industry or profession in dealing with mutual business or
  professional problems and in promoting their common interest.
         SECTION 6.  Section 825.0041, Government Code, is amended to
  read as follows:
         Sec. 825.0041.  BOARD MEMBER TRAINING.  (a)  A person who is
  appointed to and qualifies for office as a member of the board of
  trustees may not vote, deliberate, or be counted as a member in
  attendance at a meeting of the board until the person completes a
  training program that complies with [Before a member of the board
  may assume the member's duties and, if applicable, before the
  member may be confirmed by the senate the member must complete at
  least one course of the training program established under] this
  section.
         (b)  A training program must [established under this section
  shall] provide the person with information [to the member]
  regarding:
               (1)  the [enabling] legislation that created the
  retirement system and the system's programs, functions, rules, and
  budget [and its policy-making body to which the member is appointed
  to serve];
               (2)  [the programs operated by the system;
               [(3)  the role and functions of the system;
               [(4)     the rules of the system with an emphasis on the
  rules that relate to disciplinary and investigatory authority;
               [(5)  the current budget for the system;
               [(6)]  the results of the most recent formal audit of
  the system;
               (3) [(7)]  the requirements of laws relating to [the:
                     [(A)]  open meetings, public information, [law,
  Chapter 551;
                     [(B)  open records law, Chapter 552; and
                     [(C)]  administrative procedure, and conflicts of
  interest [law, Chapter 2001];
               [(8)     the requirements of the conflict of interest laws
  and other laws relating to public officials;] and
               (4) [(9)]  any applicable ethics policies adopted by
  the system or the Texas Ethics Commission.
         (c)  A person appointed to the board of trustees is entitled
  to reimbursement under Section 825.007 for the travel expenses
  incurred in attending the training program regardless of whether
  the attendance at the program occurs before or after the person
  qualifies for office.
         SECTION 7.  Section 825.006, Government Code, is amended to
  read as follows:
         Sec. 825.006.  SUNSET PROVISION.  The board of trustees of
  the Teacher Retirement System of Texas is subject to review under
  Chapter 325 (Texas Sunset Act), but is not abolished under that
  chapter. The board shall be reviewed during the period in which
  state agencies abolished in 2019, and every 12th year after that
  year, [2007] are reviewed [or, if the retirement system's operating
  expenses are not subject to the appropriations process on September
  1, 1995, the board shall be reviewed during the period in which
  state agencies abolished in 1997 are reviewed.   This section
  expires September 1, 2007].
         SECTION 8.  Subchapter A, Chapter 825, Government Code, is
  amended by adding Section 825.0061 to read as follows:
         Sec. 825.0061.  COMPLIANCE WITH SUNSET RECOMMENDATIONS. (a)
  The board of trustees shall:
               (1)  comply with and implement the management action
  recommendations regarding the board of trustees adopted by the
  Sunset Advisory Commission on January 10, 2007, as a result of the
  commission's review of the retirement system; and
               (2)  report to the Sunset Advisory Commission not later
  than November 1, 2008, the information the Sunset Advisory
  Commission requires regarding the board of trustees'
  implementation of the recommendations under Subdivision (1).
         (b)  This section expires June 1, 2009.
         SECTION 9.  Section 825.010(a), Government Code, is amended
  to read as follows:
         (a)  It is a ground for removal from the board that [if] a
  trustee:
               (1)  does not have at the time of taking office
  [appointment] the qualifications required for the trustee's
  position;
               (2)  does not maintain during service on the board the
  qualifications required for the trustee's position;
               (3)  violates a prohibition established by Section
  825.002(b) or 825.0032;
               (4)  cannot because of illness or disability discharge
  the trustee's duties for a substantial part of the term for which
  the trustee is appointed; or
               (5)  is absent from more than half [one-third] of the
  regularly scheduled board meetings that the person is eligible to
  attend during a calendar year without an excuse approved [unless
  the absence is excused] by a majority vote of the board.
         SECTION 10.  Subchapter B, Chapter 825, Government Code, is
  amended by adding Section 825.1025 to read as follows:
         Sec. 825.1025.  NEGOTIATED RULEMAKING; ALTERNATIVE DISPUTE
  RESOLUTION.  (a)  The board of trustees shall develop and implement
  a policy to encourage the use of:
               (1)  negotiated rulemaking procedures under Chapter
  2008 for the adoption of the retirement system's rules; and
               (2)  appropriate alternative dispute resolution
  procedures under Chapter 2009 to assist in the resolution of
  internal and external disputes under the retirement system's
  jurisdiction.
         (b)  Subject to Subsection (d), the retirement system's
  procedures relating to alternative dispute resolution must
  conform, to the extent possible, to any model guidelines issued by
  the State Office of Administrative Hearings for the use of
  alternative dispute resolution by state agencies.
         (c)  The board of trustees shall designate a trained person
  to:
               (1)  coordinate the implementation of the policy
  adopted under Subsection (a);
               (2)  serve as a resource for any training needed to
  implement the procedures for negotiated rulemaking or alternative
  dispute resolution; and
               (3)  collect data concerning the effectiveness of those
  procedures, as implemented by the retirement system.
         (d)  The board of trustees shall ensure that the
  implementation of this section and the negotiated rulemaking
  procedures and alternative dispute resolution procedures adopted
  under this section are consistent with the fiduciary responsibility
  imposed on the board by law.
         SECTION 11.  Section 825.113, Government Code, is amended by
  adding Subsection (g) to read as follows:
         (g)  The board of trustees shall implement a policy requiring
  the retirement system to use appropriate technological solutions to
  improve the retirement system's ability to perform its functions.
  The policy must ensure that the public is able to interact with the
  retirement system on the Internet.
         SECTION 12.  Section 825.511, Government Code, is amended to
  read as follows:
         Sec. 825.511.  COMPLAINT FILES.  (a) The retirement system
  shall maintain a system to promptly and efficiently act on
  complaints [keep an information file about each complaint] filed
  with the system that the system has authority to resolve. The
  system shall maintain information about parties to the complaint,
  the subject matter of the complaint, a summary of the results of the
  review or investigation of the complaint, and its disposition
  [provide to the person filing the complaint and the persons or
  entities complained about the system's policies and procedures
  pertaining to complaint investigation and resolution. The system,
  at least quarterly and until final disposition of the complaint,
  shall notify the person filing the complaint and the persons or
  entities complained about of the status of the complaint unless the
  notice would jeopardize an undercover investigation].
         (b)  The retirement system shall make information available
  describing its procedures for complaint investigation and
  resolution [keep information about each complaint filed with the
  system. The information shall include:
               [(1)  the date the complaint is received;
               [(2)  the name of the complainant;
               [(3)  the subject matter of the complaint;
               [(4)     a record of all persons contacted in relation to
  the complaint;
               [(5)     a summary of the results of the review or
  investigation of the complaint; and
               [(6)     for complaints for which the system took no
  action, an explanation of the reason the complaint was closed
  without action].
         (c)  The retirement system shall periodically notify the
  complaint parties of the status of the complaint until final
  disposition.
         SECTION 13.  Chapter 825, Government Code, is amended by
  adding Subchapter G to read as follows:
  SUBCHAPTER G.  MEMBER SERVICES
         Sec. 825.601.  POLICIES GOVERNING RETIREMENT BENEFITS
  COUNSELING.  The board of trustees shall adopt policies governing
  retirement benefits counseling provided to members by the system.
  The policies must:
               (1)  address the manner in which the retirement system
  makes group and individual member retirement benefits counseling
  available throughout the state;
               (2)  identify the geographic regions of the state most
  in need of retirement benefits counseling services and the manner
  in which that need will be met; and
               (3)  clarify that the retirement system does not
  provide financial or legal advice.
         Sec. 825.602.  RETIREMENT BENEFITS COUNSELING FOR
  INDIVIDUALS.  (a)  To the extent feasible, the retirement system
  shall make retirement benefits counseling for individual members
  available in conjunction with informational or educational
  programs concerning retirement planning that the system provides
  for groups.
         (b)  The retirement system shall provide retirement benefits
  counseling for individual members in geographic regions of this
  state outside of Austin.
         SECTION 14.  Sections 22.004(d) and (e), Education Code, are
  amended to read as follows:
         (d)  Each district shall report the district's compliance
  with this section to the executive director of the Teacher
  Retirement System of Texas not later than March 1 of each
  even-numbered year in the manner required by the board of trustees
  of the Teacher Retirement System of Texas.  For a district that does
  not participate in the program described by Subsection (a), the
  report must be available for review, together with the policy or
  contract for the group health coverage plan, at the central
  administrative office of each campus in the district and be posted
  on the district's Internet website if the district maintains a
  website, must be based on the district group health coverage plan in
  effect during the current plan year, and must include:
               (1)  appropriate documentation of:
                     (A)  the district's contract for group health
  coverage with a provider licensed to do business in this state by
  the Texas Department of Insurance or a risk pool authorized under
  Chapter 172, Local Government Code; or
                     (B)  a resolution of the board of trustees of the
  district authorizing a self-insurance plan for district employees
  and of the district's review of district ability to cover the
  liability assumed;
               (2)  the schedule of benefits;
               (3)  the premium rate sheet, including the amount paid
  by the district and employee;
               (4)  the number of employees covered by the health
  coverage plan offered by the district; [and]
               (5)  information concerning the ease of completing the
  report, as required by the executive director of the Teacher
  Retirement System of Texas; and
               (6)  any other information considered appropriate by
  the executive director of the Teacher Retirement System of Texas.
         (e)  The [Based on the criteria prescribed by Subsection (b),
  the] executive director of the Teacher Retirement System of Texas
  [shall, for each district that does not participate in the program
  described by Subsection (a), certify whether a district's coverage
  is comparable to the basic health coverage provided under Chapter
  1551, Insurance Code. If the executive director of the Teacher
  Retirement System of Texas determines that the group health
  coverage offered by a district is not comparable, the executive
  director shall report that information to the district and to the
  Legislative Budget Board. The executive director] shall submit a
  report to the legislature not later than September 1 of each
  even-numbered year describing the status of each district's group
  health coverage program based on the information contained in the
  report required by Subsection (d) [and the certification required
  by this subsection].  The retirement system shall post the report on
  the Internet website maintained by the system.
         SECTION 15.  Section 1575.004(a), Insurance Code, is amended
  to read as follows:
         (a)  In this chapter, "retiree" means:
               (1)  an individual not eligible for coverage under a
  plan provided under Chapter 1551 or 1601 who:
                     (A)  has taken a service retirement under the
  Teacher Retirement System of Texas after September 1, 2005, with at
  least 10 years of service credit in the system, which may include up
  to five years of military service credit, but which may not include
  any other service credit purchased for equivalent or special
  service credit, and either:
                           (i)  the sum of the retiree's age and years
  of service credit in the retirement system equals or exceeds 80 at
  the time of retirement, regardless of whether the retiree had a
  reduction in the retirement annuity for early age; or
                           (ii)  the retiree has 30 or more years of
  service credit in the retirement system at the time of retirement;
                     (B)  has taken a service retirement under the
  Teacher Retirement System of Texas after September 1, 2004, but on
  or before August 31, 2005, and on September 1, 2005, either:
                           (i)  meets the requirements for eligibility
  for the group program for coverage as a retiree as those
  requirements existed on August 31, 2004;
                           (ii)  meets the requirements of Paragraph
  (A); or
                           (iii)  is enrolled in the group program and
  was enrolled in the group program on August 31, 2005; or
                     (C)  has taken a service retirement under the
  Teacher Retirement System of Texas on or before August 31, 2004, and
  who is enrolled in the group program on August 31, 2005; [or]
               (2)  an individual who:
                     (A)  has taken a disability retirement under the
  Teacher Retirement System of Texas; and
                     (B)  is entitled to receive monthly benefits from
  the Teacher Retirement System of Texas; or
               (3)  an individual who:
                     (A)  has taken a disability retirement under the
  Teacher Retirement System of Texas;
                     (B)  has at least 10 years of service credit in the
  Teacher Retirement System of Texas on the date of disability
  retirement, as determined under Section 824.304, Government Code;
  and
                     (C)  is not entitled to receive monthly benefits
  from the Teacher Retirement System of Texas because those benefits
  have been suspended in accordance with Section 824.310, Government
  Code.
         SECTION 16.  Subchapter E, Chapter 1575, Insurance Code, is
  amended by adding Section 1575.213 to read as follows:
         Sec. 1575.213.  CERTAIN DISABILITY RETIREES.  An individual
  who is eligible as a retiree under Section 1575.004(a)(3) shall pay
  an additional premium in an amount determined by the trustee. The
  amount of the premium may not exceed the total cost, as determined
  by the trustee, attributable to the participation of that retiree
  and the dependents of that retiree during the period the individual
  is eligible as a retiree under Section 1575.004(a)(3).
         SECTION 17.  Section 4, Chapter 22, Acts of the 57th
  Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         Sec. 4.  In this section and in Sections 5, 6, 7, 8, 8A, 9,
  10, [and] 11, 12, and 13 of this Act:
               (1)  "Board of trustees" means the board of trustees of
  the Teacher Retirement System of Texas.
               (2)  "Educational institution" means a school district
  or an open-enrollment charter school.
               (3)  "Eligible qualified investment" means a qualified
  investment product offered by a company that:
                     (A)  is certified to the board of trustees under
  Section 5 of this Act; or
                     (B)  is eligible to certify to the board of
  trustees under Section 8 of this Act.
               (4)  "Employee" means an employee of an educational
  institution.
               (5)  "Qualified investment product" means an annuity or
  investment that:
                     (A)  meets the requirements of Section 403(b),
  Internal Revenue Code of 1986, and its subsequent amendments;
                     (B)  complies with applicable federal insurance
  and securities laws and regulations; and
                     (C)  complies with applicable state insurance and
  securities laws and rules.
               (6)  "Retirement system" means the Teacher Retirement
  System of Texas.
               (7)  "Salary reduction agreement" means an agreement
  between an educational institution and an employee to reduce the
  employee's salary for the purpose of making direct contributions to
  or purchases of a qualified investment product.
         SECTION 18.  Section 5(a), Chapter 22, Acts of the 57th
  Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         (a)  An educational institution may enter into a salary
  reduction agreement with an employee of the institution only if the
  qualified investment product:
               (1)  is an eligible qualified investment; and
               (2)  is registered with the retirement system under
  Section 8A of this Act.
         SECTION 19.  Sections 6(c), (e), and (h), Chapter 22, Acts of
  the 57th Legislature, 3rd Called Session, 1962 (Article 6228a-5,
  Vernon's Texas Civil Statutes), are amended to read as follows:
         (c)  After consultation with the Texas Department of
  Insurance and the State Securities Board, the retirement system may
  adopt rules only to administer this section and Sections 5, 7, 8,
  8A, [and] 11, 12, and 13 of this Act.
         (e)  The Texas Department of Insurance and the State
  Securities Board shall cooperate with the retirement system in the
  administration of this Act and shall notify the retirement system
  of any action or determination regarding a product or a company that
  violates Section 5 or 8A of this Act.
         (h)  A certification or recertification remains in effect
  for five years unless denied, suspended, [rejected] or revoked.
         SECTION 20.  Section 7(a), Chapter 22, Acts of the 57th
  Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         (a)  The retirement system may collect a fee, not to exceed
  the administrative cost to the retirement system, from a company
  that certifies or recertifies under Section 6 or 8 of this Act or
  that registers a qualified investment product under Section 8A.
  The fee for certification or recertification may not exceed $5,000.  
  The fee for registration of a qualified investment product must be
  set by the retirement system in the reasonable amount necessary to
  recover the cost to the system of administering Section 8A of this
  Act.
         SECTION 21.  Chapter 22, Acts of the 57th Legislature, 3rd
  Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
  Statutes), is amended by adding Section 8A to read as follows:
         Sec. 8A.  (a)  A qualified investment product offered to an
  employee under Section 5 of this Act must be an eligible qualified
  investment registered with the retirement system under this
  section.  To register a product, the company offering the product
  must submit an application to the retirement system in accordance
  with this section and pay the registration fee established under
  Section 7 of this Act.
         (b)  The retirement system shall adopt the form and content
  of the registration application.
         (c)  The retirement system shall designate not more than two
  registration periods each year during which a company may apply to
  register a qualified investment product and add the product to the
  list of qualified investment products maintained under Subsection
  (f) of this section. To register a qualified investment product, a
  company must submit an application for a designated registration
  period in the manner required by the retirement system.
         (d)  A company that registers a qualified investment product
  under this section shall notify the retirement system if, at any
  time, the product is not an eligible qualified investment.
         (e)  A registration under this section remains in effect for
  five years unless denied, suspended, or revoked.
         (f)  The retirement system shall establish and maintain a
  list of qualified investment products that are registered under
  this section. The list must include information concerning all the
  fees charged in connection with each registered qualified
  investment product and the sale and administration of the product.
  The list must include other information concerning each product as
  determined by the retirement system. In implementing the list, the
  retirement system shall take action to avoid increasing the amount
  of work required of educational institutions, which may include
  assigning a unique identifying number to each product. The list
  must be available on the retirement system's Internet website.
         SECTION 22.  Section 9, Chapter 22, Acts of the 57th
  Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         Sec. 9.  An educational institution may not:
               (1)  refuse to enter into a salary reduction agreement
  with an employee if the qualified investment product that is the
  subject of the salary reduction is an eligible qualified investment
  and is registered with the system under Section 8A;
               (2)  require or coerce an employee's attendance at any
  meeting at which qualified investment products are marketed;
               (3)  limit the ability of an employee to initiate,
  change, or terminate a qualified investment product at any time the
  employee chooses;
               (4)  grant exclusive access to an employee by
  discriminating against or imposing barriers to any agent, broker,
  or company that provides qualified investment products under this
  Act;
               (5)  grant exclusive access to information about an
  employee's financial information, including information about an
  employee's qualified investment products, to a company or agent
  offering qualified investment products unless the employee
  consents in writing to the access;
               (6)  accept any benefit from a company or from an agent
  or affiliate of a company that offers qualified investment
  products; or
               (7)  use public funds to recommend a qualified
  investment product offered by a company or an agent of a company
  that offers a qualified investment product.
         SECTION 23.  Section 10(a), Chapter 22, Acts of the 57th
  Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         (a)  A person commits an offense if the person:
               (1)  sells or offers for sale a qualified investment
  product that is not an eligible qualified investment or that is not
  registered under Section 8A of this Act and that the person knows
  will be the subject of a salary reduction agreement;
               (2)  violates the licensing requirements of Title 13
  [Subchapter A, Chapter 21], Insurance Code, with regard to a
  qualified investment product that the person knows will be the
  subject of a salary reduction agreement; or
               (3)  engages in activity described by Subchapter B,
  Chapter 541 [Section 4, Article 21.21], Insurance Code, with regard
  to a qualified investment product that the person knows will be the
  subject of a salary reduction agreement.
         SECTION 24.  Section 11(c), Chapter 22, Acts of the 57th
  Legislature, 3rd Called Session, 1962 (Article 6228a-5, Vernon's
  Texas Civil Statutes), is amended to read as follows:
         (c)  The notice required under this section must be uniform
  and:
               (1)  be in at least 14-point type;
               (2)  contain spaces for:
                     (A)  the name, address, and telephone number of
  the agent and company offering the annuity contract for sale;
                     (B)  the name, address, and telephone number of
  the company underwriting the annuity;
                     (C)  the license number of the person offering to
  sell the product;
                     (D)  the name of the state agency that issued the
  person's license;
                     (E)  the name of the company account
  representative who has the authority to respond to inquiries or
  complaints; and
                     (F)  with respect to fixed annuity products:
                           (i)  the current interest rate or the
  formula used to calculate the current rate of interest;
                           (ii)  the guaranteed rate of interest and
  the percentage of the premium to which the interest rate applies;
                           (iii)  how interest is compounded;
                           (iv)  the amount of any up-front, surrender,
  withdrawal, deferred sales, and market value adjustment charges or
  any other contract restriction that exceeds 10 years;
                           (v)  the time, if any, the annuity is
  required to be in force before the purchaser is entitled to the full
  bonus accumulation value;
                           (vi)  the manner in which the amount of the
  guaranteed benefit under the annuity is computed;
                           (vii)  whether loans are guaranteed to be
  available under the annuity;
                           (viii)  what restrictions, if any, apply to
  the availability of money attributable to the value of the annuity
  once the purchaser is retired or separated from the employment of
  the employer;
                           (ix)  the amount of any other fees, costs, or
  penalties;
                           (x)  whether the annuity guarantees the
  participant the right to surrender a percentage of the surrender
  value each year, and the percentage, if any; and
                           (xi)  whether the annuity guarantees the
  interest rate associated with any settlement option; and
               (3)  state, in plain language:
                     (A)  that the company offering the annuity must
  comply with Section 5 of this Act and that the annuity must be a
  qualified investment product registered under Section 8A of this
  Act;
                     (B)  that the potential purchaser may contact the
  retirement system or access its Internet website to determine which
  companies are in compliance with Section 5 of this Act and which
  qualified investment products are registered under Section 8A of
  this Act;
                     (C)  the civil remedies available to the employee;
                     (D)  that the employee may purchase any eligible
  qualified investment through a salary reduction agreement;
                     (E)  the name and telephone number of the Texas
  Department of Insurance division that specializes in consumer
  protection; and
                     (F)  the name and telephone number of the attorney
  general's division that specializes in consumer protection.
         SECTION 25.  Chapter 22, Acts of the 57th Legislature, 3rd
  Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
  Statutes), is amended by adding Section 13 to read as follows:
         Sec. 13.  (a)  The board of trustees may deny, suspend, or
  revoke the certification or recertification of a company if the
  company violates Section 5, 6, 7, 8, 8A, 10, 11, or 12 of this Act or
  a rule adopted under those sections.
         (b)  The board of trustees may deny, suspend, or revoke the
  registration of an investment product under this section if:
               (1)  the product is not an eligible qualified
  investment;
               (2)  the offer of the product violates Section 5, 6, 7,
  8, 8A, 10, 11, or 12 of this Act or a rule adopted under those
  sections; or
               (3)  the company that offers the product violates
  Section 5, 6, 7, 8, 8A, 10, 11, or 12 of this Act or a rule adopted
  under those sections.
         (c)  A proceeding to suspend or revoke a certification,
  recertification, or registration under this section is a contested
  case under Chapter 2001, Government Code.
         SECTION 26.  Section 17.46(b), Business & Commerce Code, is
  amended to read as follows:
         (b)  Except as provided in Subsection (d) of this section,
  the term "false, misleading, or deceptive acts or practices"
  includes, but is not limited to, the following acts:
               (1)  passing off goods or services as those of another;
               (2)  causing confusion or misunderstanding as to the
  source, sponsorship, approval, or certification of goods or
  services;
               (3)  causing confusion or misunderstanding as to
  affiliation, connection, or association with, or certification by,
  another;
               (4)  using deceptive representations or designations
  of geographic origin in connection with goods or services;
               (5)  representing that goods or services have
  sponsorship, approval, characteristics, ingredients, uses,
  benefits, or quantities which they do not have or that a person has
  a sponsorship, approval, status, affiliation, or connection which
  he does not;
               (6)  representing that goods are original or new if
  they are deteriorated, reconditioned, reclaimed, used, or
  secondhand;
               (7)  representing that goods or services are of a
  particular standard, quality, or grade, or that goods are of a
  particular style or model, if they are of another;
               (8)  disparaging the goods, services, or business of
  another by false or misleading representation of facts;
               (9)  advertising goods or services with intent not to
  sell them as advertised;
               (10)  advertising goods or services with intent not to
  supply a reasonable expectable public demand, unless the
  advertisements disclosed a limitation of quantity;
               (11)  making false or misleading statements of fact
  concerning the reasons for, existence of, or amount of price
  reductions;
               (12)  representing that an agreement confers or
  involves rights, remedies, or obligations which it does not have or
  involve, or which are prohibited by law;
               (13)  knowingly making false or misleading statements
  of fact concerning the need for parts, replacement, or repair
  service;
               (14)  misrepresenting the authority of a salesman,
  representative or agent to negotiate the final terms of a consumer
  transaction;
               (15)  basing a charge for the repair of any item in
  whole or in part on a guaranty or warranty instead of on the value of
  the actual repairs made or work to be performed on the item without
  stating separately the charges for the work and the charge for the
  warranty or guaranty, if any;
               (16)  disconnecting, turning back, or resetting the
  odometer of any motor vehicle so as to reduce the number of miles
  indicated on the odometer gauge;
               (17)  advertising of any sale by fraudulently
  representing that a person is going out of business;
               (18)  advertising, selling, or distributing a card
  which purports to be a prescription drug identification card issued
  under Section 4151.152, Insurance Code, in accordance with rules
  adopted by the commissioner of insurance, which offers a discount
  on the purchase of health care goods or services from a third party
  provider, and which is not evidence of insurance coverage, unless:
                     (A)  the discount is authorized under an agreement
  between the seller of the card and the provider of those goods and
  services or the discount or card is offered to members of the
  seller;
                     (B)  the seller does not represent that the card
  provides insurance coverage of any kind; and
                     (C)  the discount is not false, misleading, or
  deceptive;
               (19)  using or employing a chain referral sales plan in
  connection with the sale or offer to sell of goods, merchandise, or
  anything of value, which uses the sales technique, plan,
  arrangement, or agreement in which the buyer or prospective buyer
  is offered the opportunity to purchase merchandise or goods and in
  connection with the purchase receives the seller's promise or
  representation that the buyer shall have the right to receive
  compensation or consideration in any form for furnishing to the
  seller the names of other prospective buyers if receipt of the
  compensation or consideration is contingent upon the occurrence of
  an event subsequent to the time the buyer purchases the merchandise
  or goods;
               (20)  representing that a guarantee or warranty confers
  or involves rights or remedies which it does not have or involve,
  provided, however, that nothing in this subchapter shall be
  construed to expand the implied warranty of merchantability as
  defined in Sections 2.314 through 2.318 and Sections 2A.212 through
  2A.216 to involve obligations in excess of those which are
  appropriate to the goods;
               (21)  promoting a pyramid promotional scheme, as
  defined by Section 17.461;
               (22)  representing that work or services have been
  performed on, or parts replaced in, goods when the work or services
  were not performed or the parts replaced;
               (23)  filing suit founded upon a written contractual
  obligation of and signed by the defendant to pay money arising out
  of or based on a consumer transaction for goods, services, loans, or
  extensions of credit intended primarily for personal, family,
  household, or agricultural use in any county other than in the
  county in which the defendant resides at the time of the
  commencement of the action or in the county in which the defendant
  in fact signed the contract; provided, however, that a violation of
  this subsection shall not occur where it is shown by the person
  filing such suit he neither knew or had reason to know that the
  county in which such suit was filed was neither the county in which
  the defendant resides at the commencement of the suit nor the county
  in which the defendant in fact signed the contract;
               (24)  failing to disclose information concerning goods
  or services which was known at the time of the transaction if such
  failure to disclose such information was intended to induce the
  consumer into a transaction into which the consumer would not have
  entered had the information been disclosed;
               (25)  using the term "corporation," "incorporated," or
  an abbreviation of either of those terms in the name of a business
  entity that is not incorporated under the laws of this state or
  another jurisdiction;
               (26)  selling, offering to sell, or illegally promoting
  an annuity contract under Chapter 22, Acts of the 57th Legislature,
  3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
  Statutes), with the intent that the annuity contract will be the
  subject of a salary reduction agreement, as defined by that Act, if
  the annuity contract is not an eligible qualified investment under
  that Act or is not registered with the Teacher Retirement System of
  Texas as required by Section 8A of that Act; or
               (27)  taking advantage of a disaster declared by the
  governor under Chapter 418, Government Code, by:
                     (A)  selling or leasing fuel, food, medicine, or
  another necessity at an exorbitant or excessive price; or
                     (B)  demanding an exorbitant or excessive price in
  connection with the sale or lease of fuel, food, medicine, or
  another necessity.
         SECTION 27.  Section 825.0032(d), Government Code, is
  repealed.
         SECTION 28.  The changes in law made by Sections 824.302,
  824.304, and 824.308, Government Code, and Section 1575.004,
  Insurance Code, as amended by this Act, and by Section 824.310,
  Government Code, and Section 1575.213, Insurance Code, as added by
  this Act, apply only to the disability retirement annuity of a
  person who applies for the annuity on or after the effective date of
  this Act.  The disability retirement annuity of a person who applies
  for the annuity before the effective date of this Act is governed by
  the law as it existed immediately before the effective date of this
  Act, and that law is continued in effect for that purpose.
         SECTION 29.  The changes in law made by this Act by the
  amendment of Sections 825.0032, 825.0041, and 825.010, Government
  Code, regarding the prohibitions on, qualifications of, and
  training for members of the board of trustees of the Teacher
  Retirement System of Texas do not affect the entitlement of a member
  serving on the board immediately before September 1, 2007, to
  continue to serve and function as a member of the board for the
  remainder of the member's term. The changes in law described by
  this section apply only to a member appointed on or after September
  1, 2007.
         SECTION 30.  The change in law made by this Act to Chapter
  22, Acts of the 57th Legislature, 3rd Called Session, 1962 (Article
  6228a-5, Vernon's Texas Civil Statutes), applies only to the offer
  of a qualified investment product in accordance with that Act on or
  after January 1, 2008.  The offer of a qualified investment product
  before January 1, 2008, is governed by the law as it existed
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 31.  The change in law made by this Act to Section
  10(a), Chapter 22, Acts of the 57th Legislature, 3rd Called
  Session, 1962 (Article 6228a-5, Vernon's Texas Civil Statutes),
  applies only to an offense committed on or after January 1, 2008.  
  For purposes of this section, an offense is committed before
  January 1, 2008, if any element of the offense occurs before that
  date.  An offense committed before January 1, 2008, is covered by
  the law in effect when the offense was committed, and the former law
  is continued in effect for that purpose.
         SECTION 32.  Section 17.46(b), Business & Commerce Code, as
  amended by this Act, applies only to a cause of action that accrues
  on or after January 1, 2008. A cause of action that accrues before
  January 1, 2008, is governed by the law as it existed immediately
  before the effective date of this Act, and that law is continued in
  effect for that purpose.
         SECTION 33.  This Act takes effect September 1, 2007.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2427 was passed by the House on April
  23, 2007, by the following vote:  Yeas 135, Nays 0, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2427 was passed by the Senate on May
  23, 2007, by the following vote:  Yeas 30, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor