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A BILL TO BE ENTITLED
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AN ACT
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relating to contributions to, benefits from, membership in, and the |
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administration of systems and programs administered by the Teacher |
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Retirement System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 22.004(b) and (d), Education Code, are |
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amended to read as follows: |
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(b) A district that does not participate in the program |
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described by Subsection (a) shall make available to its employees |
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group health coverage provided by a risk pool established by one or |
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more school districts under Chapter 172, Local Government Code, or |
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under a policy of insurance or group contract issued by an insurer, |
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a company subject to Chapter 842, Insurance Code, or a health |
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maintenance organization under Chapter 843, Insurance Code. The |
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coverage must meet the substantive coverage requirements of Chapter |
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1251, Subchapter A, Chapter 1364, and Subchapter A, Chapter 1366, |
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Insurance Code, and any other law applicable to group health |
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insurance policies or contracts issued in this state. The coverage |
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must include major medical treatment but may exclude experimental |
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procedures. In this subsection, "major medical treatment" means a |
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medical, surgical, or diagnostic procedure for illness or |
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injury. The coverage may include managed care or preventive care |
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and must be comparable to the basic health coverage provided under |
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Chapter 1551, Insurance Code. The [board of trustees of the Teacher
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Retirement System of Texas shall adopt rules to determine whether a
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school district's group health coverage is comparable to the basic
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health coverage specified by this subsection. The rules must
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provide for consideration of the] following factors shall be |
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considered [concerning the district's coverage] in determining |
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whether the district's coverage is comparable to the basic health |
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coverage specified by this subsection: |
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(1) the deductible amount for service provided inside |
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and outside of the network; |
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(2) the coinsurance percentages for service provided |
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inside and outside of the network; |
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(3) the maximum amount of coinsurance payments a |
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covered person is required to pay; |
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(4) the amount of the copayment for an office visit; |
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(5) the schedule of benefits and the scope of |
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coverage; |
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(6) the lifetime maximum benefit amount; and |
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(7) verification that the coverage is issued by a |
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provider licensed to do business in this state by the Texas |
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Department of Insurance or is provided by a risk pool authorized |
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under Chapter 172, Local Government Code, or that a district is |
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capable of covering the assumed liabilities in the case of coverage |
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provided through district self-insurance. |
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(d) Each district [shall report the district's compliance
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with this section to the executive director of the Teacher
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Retirement System of Texas not later than March 1 of each
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even-numbered year in the manner required by the board of trustees
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of the Teacher Retirement System of Texas.
For a district] that |
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does not participate in the program described by Subsection (a) |
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shall prepare a report addressing the district's compliance with |
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this section. The[, the] report must be available for review, |
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together with the policy or contract for the group health coverage |
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plan, at the central administrative office of each campus in the |
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district and be posted on the district's Internet website if the |
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district maintains a website, must be based on the district group |
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health coverage plan in effect during the current plan year, and |
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must include: |
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(1) appropriate documentation of: |
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(A) the district's contract for group health |
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coverage with a provider licensed to do business in this state by |
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the Texas Department of Insurance or a risk pool authorized under |
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Chapter 172, Local Government Code; or |
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(B) a resolution of the board of trustees of the |
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district authorizing a self-insurance plan for district employees |
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and of the district's review of district ability to cover the |
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liability assumed; |
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(2) the schedule of benefits; |
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(3) the premium rate sheet, including the amount paid |
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by the district and employee; |
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(4) the number of employees covered by the health |
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coverage plan offered by the district; and |
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(5) information concerning the ease of completing the |
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report[, as required by the executive director of the Teacher
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Retirement System of Texas; and
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[(6)
any other information considered appropriate by
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the executive director of the Teacher Retirement System of Texas]. |
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SECTION 2. Subchapter A, Chapter 821, Government Code, is |
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amended by adding Section 821.0011 to read as follows: |
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Sec. 821.0011. DETERMINATION OF EMPLOYEE OR INDEPENDENT |
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CONTRACTOR STATUS. In determining whether an individual is an |
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employee or independent contractor of an employer, the retirement |
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system shall use the test applied under common law and any guidance |
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issued by the Internal Revenue Service regarding factors to |
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consider when determining an individual's employment status. |
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SECTION 3. Section 822.201(b), Government Code, is amended |
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to read as follows: |
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(b) "Salary and wages" as used in Subsection (a) means: |
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(1) normal periodic payments of money for service the |
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right to which accrues on a regular basis in proportion to the |
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service performed; |
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(2) amounts by which the member's salary is reduced |
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under a salary reduction agreement authorized by Chapter 610; |
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(3) amounts that would otherwise qualify as salary and |
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wages under Subdivision (1) but are not received directly by the |
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member pursuant to a good faith, voluntary written salary reduction |
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agreement in order to finance payments to a deferred compensation |
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or tax sheltered annuity program specifically authorized by state |
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law or to finance benefit options under a cafeteria plan qualifying |
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under Section 125 of the Internal Revenue Code of 1986, if: |
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(A) the program or benefit options are made |
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available to all employees of the employer; and |
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(B) the benefit options in the cafeteria plan are |
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limited to one or more options that provide deferred compensation, |
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group health and disability insurance, group term life insurance, |
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dependent care assistance programs, or group legal services plans; |
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(4) performance pay awarded to an employee by a school |
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district as part of a total compensation plan approved by the board |
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of trustees of the district and meeting the requirements of |
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Subsection (e); |
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(5) the benefit replacement pay a person earns under |
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Subchapter H, Chapter 659, except as provided by Subsection (c); |
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(6) stipends paid to teachers in accordance with |
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Section 21.410, 21.411, 21.412, or 21.413, Education Code; |
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(7) amounts by which the member's salary is reduced or |
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that are deducted from the member's salary as authorized by |
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Subchapter J, Chapter 659; |
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(8) a merit salary increase made under Section 51.962, |
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Education Code; |
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(9) amounts received under the relevant parts of the |
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educator excellence awards program under Subchapter O, Chapter 21, |
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Education Code, or a mentoring program under Section 21.458, |
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Education Code, that authorize compensation for service; |
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(10) salary amounts designated as health care |
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supplementation by an employee under Subchapter D, Chapter 22, |
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Education Code; and |
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(11) to the extent required by Sections 3401(h) and |
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414(u)(12) [414(u)(2)], Internal Revenue Code of 1986, |
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differential wage payments received by an individual from an |
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employer on or after January 1, 2009, while the individual is |
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performing qualified military service as defined by Section 414(u), |
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Internal Revenue Code of 1986. |
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SECTION 4. Section 823.004(a), Government Code, is amended |
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to read as follows: |
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(a) All credit for military service, out-of-state service, |
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developmental leave, work experience in a career or technological |
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field, and service transferred to the retirement system under |
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Chapter 805 shall be computed on a September 1 through August 31 |
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school year. Payments for service described by this section must be |
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completed: |
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(1) not later than two calendar months after the later |
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of the member's retirement date or the last day of the month in |
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which the member submits a retirement application; and |
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(2) before the later of the due date for the member's |
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first monthly annuity payment or the date on which the retirement |
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system issues the first monthly annuity payment to the member. |
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SECTION 5. Section 823.403, Government Code, is amended by |
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amending Subsections (c) and (d) and adding Subsection (d-1) to |
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read as follows: |
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(c) On receipt of a certification under Subsection (b) and |
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payment under Subsection (d) of this section, the retirement system |
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shall grant any credit to which a retiree who is a subject of the |
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certification is entitled. An annuity payment may not be increased |
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until the retirement system is paid the full cost of the service |
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credit. [The increase in the annuity payment begins with the first
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payment that becomes due after certification and payment.] |
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(d) In order to receive credit, the member shall pay to the |
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retirement system at the time service credit is granted under this |
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section the actuarial present value of the additional standard |
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retirement annuity benefits under the option selected by the member |
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that would be attributable to the conversion of the unused state |
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personal or sick leave into the service credit based on rates and |
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tables recommended by the actuary and adopted by the board of |
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trustees. Except as provided by this subsection, the retirement |
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system must receive the payment for service credit under this |
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section not later than the 90th day after the date the retirement |
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system issues a cost statement for the purchase of service credit |
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under this section. The retirement system may grant a member a |
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one-time extension of not more than 30 days to complete the purchase |
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of the service credit if the purchase is made by: |
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(1) a direct rollover distribution from another |
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eligible retirement plan; or |
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(2) a direct trustee-to-trustee transfer from: |
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(A) an eligible deferred compensation plan |
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described by Section 457(b), Internal Revenue Code of 1986; or |
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(B) an individual account plan consisting of an |
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annuity contract described by Section 403(b), Internal Revenue Code |
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of 1986. |
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(d-1) A member who fails to make the payment described by |
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Subsection (d) within the time prescribed by that subsection may: |
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(1) decline to purchase service credit under this |
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section and maintain the member's effective date of retirement; or |
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(2) revoke the member's retirement as provided by |
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Section 824.005(a) and select a later retirement date that provides |
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the member with sufficient time to complete the purchase of the |
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service credit under this section. |
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SECTION 6. Sections 824.002(e) and (f), Government Code, |
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are amended to read as follows: |
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(e) Except as provided by Section 823.403(d), if |
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applicable, not [Not] later than two months after the later of a |
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member's retirement date or the last day of the month in which the |
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member's application for retirement is submitted, and before the |
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later of the due date for the first monthly annuity payment or the |
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date on which the retirement system issues the first monthly |
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annuity payment, a member applying for service retirement may, |
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after providing notice to the retirement system, reinstate |
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withdrawn contributions, make deposits for military service and |
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equivalent membership service, and receive service credit as |
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provided by this subtitle. |
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(f) An effective retirement date may not be changed after it |
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is established except by revocation of retirement under Section |
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824.005 [and retirement at a later date]. |
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SECTION 7. Section 825.307(a), Government Code, is amended |
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to read as follows: |
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(a) The retirement system shall deposit in a member's |
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individual account in the member savings account: |
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(1) the amount of contributions to the retirement |
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system that is deducted from the member's compensation; |
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(2) the portion of a deposit made on or after |
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resumption of membership that represents the amount of retirement |
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benefits received; |
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(3) the portion of a deposit to reinstate service |
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credit previously canceled that represents the amount withdrawn or |
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refunded; |
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(4) the portion of a deposit to establish military |
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service credit required by Section 823.302(c); |
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(5) the portion of a deposit to establish USERRA |
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credit required by Section 823.304(c); |
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(6) the portion of a deposit to establish: |
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(A) equivalent membership service credit |
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required by Section 823.401(d), 823.402(e) [823.402(e)(1) or
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(e)(2)], 823.403(d), [or] 823.404(c), or 823.406(b) or former |
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Section 823.405; or |
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(B) unreported service credit or compensation |
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required by Section 825.403(h); and |
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(7) [(6)] interest earned on money in the account as |
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provided by Subsections (b) and (c) and Section 825.313(c). |
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SECTION 8. Section 825.509(b-1), Government Code, is |
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amended to read as follows: |
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(b-1) Notwithstanding Subsection (b)(3), with respect to a |
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distribution made on or after January 1, 2002, an otherwise |
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eligible portion of a rollover distribution that consists of |
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after-tax employee contributions not includable in gross income is |
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an eligible rollover distribution for purposes of this section. The |
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eligible portion may be transferred only: |
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(1) to an individual retirement account or annuity |
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described by Section 408(a) or (b), Internal Revenue Code of 1986; |
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(2) to a qualified plan described by Section 403(a), |
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Internal Revenue Code of 1986; |
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(3) for distributions occurring on or after January 1, |
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2007, to a qualified plan described by Section 401(a), Internal |
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Revenue Code of 1986, if the plan separately accounts for: |
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(A) the amounts transferred and the earnings on |
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the amounts transferred; and |
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(B) the portion of the distribution that is |
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includable in gross income and the portion of the distribution that |
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is not includable in gross income; or |
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(4) to an annuity contract described by Section |
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403(b), Internal Revenue Code of 1986, that agrees to separately |
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account for amounts transferred and earnings on amounts |
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transferred, including for the portion of the distribution that is |
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includable in gross income and the portion of the distribution that |
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is not includable in gross income. |
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SECTION 9. Section 830.201(h), Government Code, is amended |
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to read as follows: |
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(h) Before November 2 of each even-numbered year, the Texas |
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Higher Education Coordinating Board [board of trustees], in |
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coordination with the Legislative Budget Board, shall certify to |
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the comptroller for review and adoption an estimate of the amount |
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necessary to pay the state's contributions to the retirement system |
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for the following biennium. For qualifying employees under |
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Subsection (g)(1), the Texas Higher Education Coordinating Board |
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[board of trustees] shall include only the amount payable by the |
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state under Subsection (g)(1) in determining the amount to be |
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certified. |
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SECTION 10. This Act takes effect September 1, 2017. |