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  85R9163 TSR-F
 
  By: Huffman S.B. No. 1663
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to contributions to, benefits from, late fees imposed by,
  and the administration of systems and programs administered by the
  Teacher Retirement System of Texas.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 822.002, Government Code, is amended to
  read as follows:
         Sec. 822.002.  EXCEPTIONS TO MEMBERSHIP REQUIREMENT. (a)  
  An employee of the public school system is not permitted to be a
  member of the retirement system if the employee:
               (1)  is eligible and elects to participate in the
  optional retirement program under Chapter 830; or
               (2)  [is solely employed by a public institution of
  higher education that as a condition of employment requires the
  employee to be enrolled as a student in the institution; or
               [(3)]  has retired under the retirement system and has
  not been reinstated to membership pursuant to Section 824.005 or
  824.307.
         (b)  An employee of a public institution of higher education
  who is required to be enrolled as a student in the institution as a
  condition of employment is not permitted to be a member of the
  retirement system based on that student employment, and
  compensation paid to the employee for work performed as a student
  employee is not compensation subject to report and deduction for
  member contributions or to credit in benefit computations under
  Section 822.201.
         SECTION 2.  Section 824.1012, Government Code, is amended by
  amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  As an exception to Section 824.101(c), a retiree who
  selected an optional service retirement annuity under Section
  824.204(c)(1), (c)(2), or (c)(5) or an optional disability
  retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
  and who has received at least one payment under the plan selected
  may change the optional annuity selection made by the retiree to a
  standard service or disability retirement annuity as provided for
  in this section.  If the beneficiary of the optional annuity was
  [is] the spouse [or former spouse] of the retiree when the retiree
  designated the spouse as beneficiary of the optional annuity, to
  change from the optional annuity to a standard retirement annuity
  under this subsection, the spouse or former spouse, as applicable,
  who was designated [,] the beneficiary of the optional annuity must
  sign a notarized consent to the change[,] or a court with
  jurisdiction over the marriage of [in a divorce proceeding
  involving] the retiree and beneficiary must approve or order the
  change [in the divorce decree or acceptance of a property
  settlement].  The change in plan selection takes effect when the
  retirement system receives the request to change the plan, provided
  the signed consent form or court order, as applicable, is
  subsequently received by the retirement system [it].
         (a-1)  The executive director or the executive director's
  designee has exclusive authority to determine whether the language
  in a court order described by Subsection (a) is sufficient to
  indicate that the court has approved or ordered the change in plan
  selection. A determination by the executive director or the
  executive director's designee under this subsection may be appealed
  only to the board of trustees, except that the board by rule may
  waive the requirement that an appeal be to the board. An appeal to
  the board is a contested case under Chapter 2001. The standard of
  review of an appeal brought under this subsection is by substantial
  evidence.
         SECTION 3.  Section 824.1013, Government Code, is amended by
  amending Subsections (b) and (c-1) and adding Subsection (c-2) to
  read as follows:
         (b)  If the beneficiary designated at the time of the
  retiree's retirement is the spouse of the retiree at the time of the
  designation:
               (1)  the spouse must give written, notarized consent to
  the change;
               (2)  if the parties divorce after the designation, the
  former spouse who was designated beneficiary must give written,
  notarized consent to the change; or
               (3)  a court with jurisdiction over the marriage must
  approve or order [have ordered] the change.
         (c-1)  Notwithstanding Subsection (c), a beneficiary
  designated under this section is entitled on the retiree's death to
  receive monthly payments of the survivor's portion of the retiree's
  optional retirement annuity for the remainder of the beneficiary's
  life if the beneficiary designated at the time of the retiree's
  retirement is a trust and the beneficiary designated under this
  section is:
               (1)  the sole beneficiary of that trust; or
               (2)  an individual who at the time of the retiree's
  death is the sole beneficiary of that trust.
         (c-2)  The executive director or the executive director's
  designee has exclusive authority to determine whether the language
  in a court order described by Subsection (b) is sufficient to
  indicate that the court has approved or ordered the change in the
  designated beneficiary. A determination by the executive director
  or the executive director's designee under this subsection may be
  appealed only to the board of trustees, except that the board by
  rule may waive the requirement that an appeal be to the board. An
  appeal to the board is a contested case under Chapter 2001. The
  standard of review of an appeal brought under this subsection is by
  substantial evidence.
         SECTION 4.  Section 824.402, Government Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  In determining under Subsection (a)(4) whether to
  reduce the optional retirement annuity amount because of early
  retirement and in determining the amount of that reduction, if
  applicable, the retirement system shall make the determination as
  if the member had retired with an additional five years of service
  credit on the last day of the month preceding the month in which the
  member dies. The additional five years of service credit used in
  making a determination under this subsection may not be used to
  determine the amount of the benefit under Section 824.203 or
  whether the benefit under this subsection is authorized under
  Section 824.401.
         SECTION 5.  Section 824.503(f), Government Code, is amended
  to read as follows:
         (f)  The designated beneficiary of a disability retiree is
  eligible to receive the benefits described by this section if the
  retiree:
               (1)  retires on or after September 1, 1992; and
               (2)  dies while receiving disability retirement
  benefits under Section 824.304 [824.304(b)].
         SECTION 6.  Section 824.601, Government Code, is amended by
  amending Subsection (b) and adding Subsection (b-2) to read as
  follows:
         (b)  Except as provided by Subsection (b-1) or Section
  824.602 and subject to Subsection (b-2), a retiree is not entitled
  to service or disability retirement benefit payments, as
  applicable, for any month in which the retiree is employed in any
  position by a Texas public educational institution.
         (b-2)  A retiree is considered to be employed by a Texas
  public educational institution for purposes of Subsection (b) if
  the retiree performs duties or provides services for or on behalf of
  the institution that an employee of the institution would otherwise
  perform or provide and:
               (1)  the retiree waives, defers, or forgoes
  compensation from the institution for the performance of the duties
  or provision of the services at any time during the 12 consecutive
  calendar months after the retiree's effective date of retirement,
  notwithstanding any other law, including Sections 824.602(a)(1),
  (a)(2), and (a)(4);
               (2)  the retiree performs the duties or provides the
  services for or on behalf of the institution as an independent
  contractor at any time during the 12 consecutive calendar months
  after the retiree's effective date of retirement; or
               (3)  the retiree, as a volunteer without compensation,
  performs the same duties or provides the same services for an
  institution that the retiree performed or provided immediately
  before retiring and the retiree has an agreement to perform those
  duties or provide those services after the 12 consecutive calendar
  months after the retiree's effective date of retirement.
         SECTION 7.  Section 825.208(b), Government Code, is amended
  to read as follows:
         (b)  The retirement system is exempt from Section 651.002,
  Chapter 660, and Subchapter K, Chapter 659, to the extent the board
  of trustees determines an exemption is necessary for the
  performance of fiduciary duties.
         SECTION 8.  Section 825.212, Government Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  Notwithstanding any other law, all personal financial
  disclosures made by employees of the retirement system under this
  section, including a rule or policy adopted under this section, are
  confidential and excepted from the requirements of Section 552.021.
         SECTION 9.  Section 825.3011(b), Government Code, is amended
  to read as follows:
         (b)  Chapter 551 does not require the board of trustees to
  confer with one or more employees, consultants, or legal counsel of
  the retirement system or with a third party, including
  representatives of an issuer of restricted securities or a private
  investment fund, in an open meeting if the only purpose of the
  conference is to receive information from or question the
  employees, consultants, or legal counsel of the retirement system
  or the third party relating to:
               (1)  [an] investment transactions or [a] potential
  investment transactions if, before conducting the closed meeting, a
  majority of [by] the board of trustees in an open meeting vote that
  deliberating or conferring in an open meeting would have a
  detrimental effect on the position of the retirement system in
  negotiations with third parties or put the retirement system at a
  competitive disadvantage in the market [in a private investment
  fund]; or
               (2)  the purchase, holding, or disposal of restricted
  securities or a private investment fund's investment in restricted
  securities if, under Section 552.143, the information discussed
  would be confidential and excepted from the requirements of Section
  552.021 if the information was included in the records of a
  governmental body.
         SECTION 10.  Section 825.306, Government Code, is amended to
  read as follows:
         Sec. 825.306.  CREDITING SYSTEM ASSETS. (a) The assets of
  the retirement system shall be maintained and reported in a manner
  that reflects the source of the assets or the purpose for which the
  assets are held, using appropriate ledgers and subledgers, in
  accordance with generally accepted accounting principles
  prescribed by the Governmental Accounting Standards Board or its
  successor. In addition, the maintenance and reporting of the
  assets must be in compliance with applicable tax law and consistent
  with any fiduciary duty owed with respect to the trust.  In the
  alternative, the assets may be credited, according to the purpose
  for which they are held, to one of the following accounts:
               (1)  member savings account;
               (2)  state contribution account;
               (3)  retired reserve account;
               (4)  interest account;
               (5)  expense account; or
               (6)  deferred retirement option account.
         (b)  Notwithstanding any other law, a requirement to deposit
  in or transfer assets from one of the accounts described under
  Subsection (a) is satisfied by maintaining and reporting the assets
  in accordance with that subsection.
         SECTION 11.  Section 825.408, Government Code, is amended by
  amending Subsection (a) and adding Subsections (a-1) and (a-2) to
  read as follows:
         (a)  Except as provided by Subsection (a-1), an [An] employer
  that fails to remit, before the seventh day after the last day of a
  month, all member and employer deposits and documentation of the
  deposits required by this subchapter to be remitted by the employer
  for the month shall pay to the retirement system, in addition to the
  deposits, interest on the unpaid [or undocumented] amounts at an
  annual rate compounded monthly and a late fee in an amount
  determined by the retirement system for each day after the deadline
  imposed by this subsection that the employer fails to submit the
  documentation of the deposits.  The rate of interest is the rate
  established under Section 825.313(b)(1), plus two percent.  
  Interest and late fees required under this section are [is]
  creditable to the interest account.  On request, the retirement
  system may grant a waiver of the deadline imposed by this subsection
  based on an employer's financial or technological resources.
         (a-1)  This subsection applies only to an employer who
  reports the employment of a retiree to the retirement system.  
  Subject to Subsection (a-2), an employer that fails to remit,
  before the 11th day after the last day of a calendar month in which a
  retiree is employed, the employer deposits required by Section
  825.4092(b), documentation of those deposits as required by this
  section, and the certified statement of employment required by
  Section 824.6022 shall pay to the retirement system, in addition to
  the deposits, interest on the unpaid amounts at the annual rate
  established under Subsection (a), compounded monthly, and a late
  fee for each day after the deadline imposed by this subsection that
  the employer fails to file the documentation of the deposits and the
  certified statement of employment.
         (a-2)  If a retiree described by Subsection (a-1) performs
  work in the month of August, the employer must remit the employer
  deposits, documentation of those deposits, and the certified
  statement of employment not later than the seventh day of
  September.
         SECTION 12.  Section 825.410(a), Government Code, is amended
  to read as follows:
         (a)  Payments to establish special service credit as
  authorized under this subtitle, other than service credit that may
  only be determined and paid for at the time of retirement such as
  unused leave as authorized by Section 823.403, may be made in a lump
  sum by a monthly payroll deduction in an amount not less than
  one-twelfth of the contribution required to establish at least one
  year of service credit, or in equal monthly installments over a
  period not to exceed the lesser of the number of years of credit to
  be purchased or 60 months.  Installment and payroll deduction
  payments are due on the first day of each calendar month in the
  payment period.  If an installment or payroll deduction payment is
  not made in full within 60 days after the due date, the retirement
  system may refund all installment or payroll deduction payments
  less fees paid on the lump sum due when installment or payroll
  deduction payments began.  Partial payment of an installment or
  payroll deduction payment may be treated as nonpayment.  A check
  returned for insufficient funds or a closed account shall be
  treated as nonpayment.  When two or more consecutive monthly
  payments have a returned check, a refund may be made.  [If the
  retirement system refunds payments pursuant to this subsection, the
  member is not permitted to use the installment method of payment or
  the payroll deduction method, as applicable, for the same service
  for three years after the date of the refund.     A member who requests
  and receives a refund of installment or payroll deduction payments
  also is not permitted to use the same method of payment for the same
  service for three years after the date of the refund.]
         SECTION 13.  Section 825.519, Government Code, is amended to
  read as follows:
         Sec. 825.519.  ELECTRONIC INFORMATION. (a)  The retirement
  system may provide confidential information electronically to
  members or other participants or employers and receive information
  electronically from those persons, including by use of an
  electronic signature or certification in a form acceptable to the
  retirement system.  An unintentional disclosure to, or unauthorized
  access by, a third party related to the transmission or receipt of
  information under this section is not a violation by the retirement
  system of any law, including a rule relating to the protection of
  confidential information.
         (b)  The retirement system may provide to a member or retiree
  any information that is required to be provided, distributed, or
  furnished under Section 802.106(a), (b), (d), or (e) by:
               (1)  sending the information to an e-mail address the
  member or retiree furnished to an employer covered by the
  retirement system; or
               (2)  directing the member or retiree through a written
  notice or e-mail to an Internet website address to access the
  information.
         (c)  The retirement system may provide to an active member of
  the retirement system the information that is required to be
  provided under Section 802.106(c) by sending the information to an
  e-mail address specified by the member for the purpose of receiving
  confidential information.
         SECTION 14.  Section 1575.402(a), Insurance Code, is amended
  to read as follows:
         (a)  The Retirees Advisory Committee is composed of the
  following seven [nine] members appointed by the trustee:
               (1)  one member who is an active school administrator;
               (2)  one member who is a retired school administrator;
               (3)  two members who are active teachers; and
               (4)  three members who are retired teachers[;
               [(5)     one member who is an active member of the
  auxiliary personnel of a school district; and
               [(6)     one member who is a retired member of the
  auxiliary personnel of a school district].
         SECTION 15.  Section 1575.403(b), Insurance Code, is amended
  to read as follows:
         (b)  The [Five members' terms, including the] terms of the
  active school administrator, one active teacher, and two retired
  teachers[, and the retired member of the auxiliary personnel,]
  expire February 1, 2002, and every fourth year after that date.
         SECTION 16.  Section 824.402, Government Code, as amended by
  this Act, applies only to a member of the Teacher Retirement System
  of Texas who retires on or after the effective date of this Act.
         SECTION 17.  Section 824.601, Government Code, as amended by
  this Act, applies to a retiree of the Teacher Retirement System of
  Texas regardless of whether the person retired from employment
  before, on, or after the effective date of this Act.
         SECTION 18.  The changes in law made by this Act to Sections
  1575.402 and 1575.403, Insurance Code, regarding the composition
  and terms of the Retirees Advisory Committee, do not affect the
  entitlement of a member serving on the committee immediately before
  the effective date of this Act to continue to serve as a member of
  the committee for the remainder of the member's term. As the terms
  of committee members expire or as vacancies occur on the board, the
  Teacher Retirement System of Texas shall appoint members to the
  committee as necessary to comply with Sections 1575.402 and
  1575.403, Insurance Code, as amended by this Act.
         SECTION 19.  This Act takes effect September 1, 2017, except
  that Section 825.212, Government Code, as amended by this Act,
  takes effect immediately if this Act receives a vote of two-thirds
  of all the members elected to each house, as provided by Section 39,
  Article III, Texas Constitution. If this Act does not receive the
  vote necessary for immediate effect, Section 825.212, Government
  Code, as amended by this Act, takes effect September 1, 2017.