83R8981 KFF-F
	By: Murphy	H.B. No. 2432

	A BILL TO BE ENTITLED
	AN ACT
	relating to benefits from and administration of certain public
	retirement systems; providing civil penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 552.0038(c), (h), and (i), Government
	Code, are amended to read as follows:
	(c)  Records of individual members, annuitants, retirees,
	beneficiaries, alternate payees, program participants, or persons
	eligible for benefits from a retirement system under a retirement
	plan or program administered by the retirement system that are in
	the custody of the system or in the custody of an administering
	firm, a carrier, or another governmental agency, including the
	comptroller, acting in cooperation with or on behalf of the
	retirement system are confidential and not subject to public
	disclosure.  [The retirement system, administering firm, carrier,
	or governmental agency is not required to accept or comply with a
	request for a record or information about a record or to seek an
	opinion from the attorney general because the records are exempt
	from the provisions of this chapter, except as otherwise provided
	by this section.]
	(h)  [The retirement system has sole discretion in
	determining whether a record is subject to this section.]  For
	purposes of this section, a record includes any identifying
	information about a person, living or deceased, who is or was a
	member, annuitant, retiree, beneficiary, alternate payee, program
	participant, or person eligible for benefits from the retirement
	system under any retirement plan or program administered by the
	retirement system.
	(i)  To the extent of a conflict between this section and any
	other law with respect to the confidential information held by a
	public retirement system or other entity described by Subsection
	(c) concerning an individual member, annuitant, retiree,
	beneficiary, alternate payee, program participant, or person
	eligible for benefits from the retirement system:
	(1)  [,] the prevailing provision is the provision that
	provides the greater substantive [and procedural] protection for
	the privacy of information concerning that individual member,
	annuitant, retiree, beneficiary, alternate payee, program
	participant, or person eligible for benefits; and
	(2)  a procedural provision of this chapter prevails.
	SECTION 2.  Subchapter A, Chapter 802, Government Code, is
	amended by adding Sections 802.004 through 802.007 to read as
	follows:
	Sec. 802.004.  DISCLOSURE OF CERTAIN POTENTIAL CONFLICTS OF
	INTEREST REQUIRED; ANNUAL FILING. (a)  This section applies to:
	(1)  a member of the governing body of a public
	retirement system;
	(2)  an investment manager for a public retirement
	system appointed by contract under Section 802.204; and
	(3)  any other person, including an investment
	consultant or advisor, providing services under contract to a
	public retirement system relating to the management and investment
	of the system's assets.
	(b)  Not later than the 30th day after the date the person
	learns of the relationship, a person to whom this section applies
	shall disclose in writing to the public retirement system that the
	person or an immediate family member of the person, including the
	person's spouse, has a business, commercial, or other relationship
	that a reasonable person would find likely to diminish the person's
	independence of judgment in the performance of the person's
	responsibilities with respect to the management or investment of
	the system's assets, including a relationship in which the person
	or the person's immediate family member:
	(1)  is employed by or participates in the management
	of a business entity or other organization receiving funds from the
	retirement system; or
	(2)  owns or controls, directly or indirectly, an
	interest in a business entity or other organization receiving funds
	from the retirement system.
	(c)  If a person described by Subsection (a)(1) fails to
	disclose a relationship under Subsection (b), it is a ground for
	removal from the governing body of the public retirement system on
	which the person serves.  If the board determines that a person
	described by Subsection (a)(1) should be removed under this
	subsection, the board shall:
	(1)  notify the appropriate appointing officer that a
	ground for removal exists; or
	(2)  if the person was elected to the governing body,
	notify the presiding officer or the assistant presiding officer of
	the governing body of the ground for removal.
	(d)  An appointing officer or, in the case of an elected
	trustee, the governing body, on receipt of notice under Subsection
	(c) or on making the officer's or body's own determination, may
	remove the person from the governing body if the appointing officer
	or governing body determines a violation of Subsection (b) has
	occurred.
	(e)  If a person described by Subsection (a)(2) or (3) fails
	to disclose a relationship under Subsection (b):
	(1)  the contract is voidable by the public retirement
	system; and
	(2)  the governing body of the retirement system may
	enter an order declaring the person ineligible to contract for
	business relating to the management or investment of the system's
	assets.
	(f)  At least annually on a date specified by the public
	retirement system, a person to whom this section applies shall file
	a statement with the system stating that the person is aware that
	the person is required to disclose material conflicts of interest
	under this section and that the person is in compliance with this
	section.
	(g)  The board by rule shall adopt guidelines relating to the
	types of relationships that must be disclosed under Subsection (b).
	Sec. 802.005.  PROHIBITION AGAINST ACCEPTANCE OF CERTAIN
	BENEFITS.  (a)  In this section, "benefit" has the meaning assigned
	by Section 1.07, Penal Code.
	(b)  Except as provided by Subsection (c), a person to whom
	Section 802.004 applies or a member of the immediate family of the
	person may not accept any benefit with an aggregate value in any
	calendar year of more than $1,000 from any individual who enters
	into or seeks to enter into a contract with a public retirement
	system.
	(c)  Food, lodging, and transportation related to attending
	a conference in this state that is attended or expected to be
	attended by at least 50 individuals representing more than one
	public retirement system are exempt from this section.
	Sec. 802.006.  PROHIBITED EMPLOYMENT AND CONTRACTS.  A
	public retirement system may not knowingly employ or contract with,
	either directly or indirectly, a former member of the governing
	body of the system before the first anniversary of the date the
	individual ceased to be a member of the system's governing body.
	Sec. 802.007.  CIVIL PENALTY.  (a)  In this section, "theft"
	means the conduct prohibited by Section 31.03, Penal Code.
	(b)  A person who commits theft in relation to a service
	provided by the person to a public retirement system is liable to
	the system for a civil penalty in an amount not to exceed $250,000
	for each violation.  An action may be brought under this subsection
	regardless of whether a criminal conviction under Section 31.03,
	Penal Code, has been sought or obtained against the person.
	(c)  A person who commits a breach of the person's fiduciary
	duty in relation to a service provided by the person to a public
	retirement system is liable to the system for a civil penalty in an
	amount not to exceed:
	(1)  $500 for each violation; or
	(2)  $10,000 in the aggregate for all violations of a
	similar nature.
	(d)  The amount of a civil penalty imposed under this section
	must be in an amount that is reasonably related to the harm to the
	public retirement system.
	(e)  The attorney general may bring an action to impose and
	recover a civil penalty for a violation of this section made in
	relation to:
	(1)  the Employees Retirement System of Texas,
	including a retirement system administered by that system;
	(2)  the Teacher Retirement System of Texas;
	(3)  the Texas Municipal Retirement System;
	(4)  the Texas County and District Retirement System;
	and
	(5)  the Texas Emergency Services Retirement System.
	(f)  A local prosecuting attorney may bring an action to
	impose or recover a civil penalty for a violation of this section
	made in relation to a public retirement system other than a system
	described by Subsection (e).
	(g)  A penalty under this section is in addition to any other
	remedy provided by law.
	SECTION 3.  Section 802.103, Government Code, is amended by
	adding Subsection (d) to read as follows:
	(d)  The governing body of a public retirement system shall
	require that all records, including documents used to prepare or
	explain the annual financial report required under this section,
	be:
	(1)  retained in compliance with the records retention
	schedule adopted by the Texas State Library and Archives Commission
	applicable to all local governments; and
	(2)  made available to the board on request.
	SECTION 4.  Subchapter C, Chapter 802, Government Code, is
	amended by adding Sections 802.2041 and 802.2042 to read as
	follows:
	Sec. 802.2041.  PROCUREMENT OF INVESTMENT MANAGERS AND
	CERTAIN OTHERS. (a)  The board shall by rule adopt guidelines for
	the procurement of investment managers and other persons, including
	an investment consultant or advisor, who provide a public
	retirement system with services relating to the management and
	investment of the system's assets.
	(b)  The board may require a public retirement system to
	provide the board with a statement, not later than the 30th day
	after the date of the procurement, detailing the system's method of
	selecting any person described by Subsection (a).
	Sec. 802.2042.  CONTRACTS WITH INVESTMENT MANAGERS AND
	CERTAIN OTHERS. A contract with an investment manager or other
	person to provide services to a public retirement system relating
	to the management and investment of the system's assets is subject,
	at the board's request, to review by the board regarding the fees
	charged and paid by the system and the services rendered to the
	system in consideration for the fees.
	SECTION 5.  Chapter 810, Government Code, is amended by
	adding Section 810.002 to read as follows:
	Sec. 810.002.  DETERMINATION OF CERTAIN PUBLIC RETIREMENT
	SYSTEM BENEFITS. (a) In this section "public retirement system"
	has the meaning assigned by Section 802.001.
	(b)  Notwithstanding any other law, if benefits provided
	under a public retirement system's defined benefit plan are
	calculated based in part on a member's final average salary, the
	determination of that salary may not include overtime pay or any
	other amounts received by the member as payment for time worked in
	excess of the member's normal work schedule.
	SECTION 6.  (a)  Not later than January 1, 2014, the State
	Pension Review Board shall adopt rules as required by Sections
	802.004 and 802.2041, Government Code, as added by this Act.
	(b)  Notwithstanding Section 802.004, Government Code, as
	added by this Act, a person is not required to comply with that
	section before the 30th day after the date the State Pension Review
	Board adopts initial rules under that section.
	SECTION 7.  (a) Section 810.002, Government Code, as added
	by this Act, applies only to a member of a public retirement system
	who:
	(1)  is hired on or after the effective date of this
	Act; and
	(2)  was not a member of the system on the date the
	member was hired.
	(b)  A member of a public retirement system who was hired
	before the effective date of this Act or who was a member of a public
	retirement system on the date the member was hired is subject to the
	law in effect on the date the member was hired, and that law is
	continued in effect for that purpose.
	SECTION 8.  This Act takes effect September 1, 2013.