H.B. No. 3355

	AN ACT
	relating to the board of trustees, benefits, and contributions of
	certain fire and police pension funds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1.  CONTINGENT PROVISIONS EFFECTIVE SEPTEMBER 1, 2007
	SECTION 1.01.  Sections 1(a) and (b), Chapter 101, Acts of
	the 43rd Legislature, 1st Called Session, 1933 (Article 6243b,
	Vernon's Texas Civil Statutes), are amended to read as follows:
	(a)  In all incorporated cities and towns containing more
	than 550,000 inhabitants and less than 600,000 inhabitants, having
	a fully or partially paid fire department, three (3) citizens of
	said city or town to be designated by the mayor [or the mayor's
	authorized representative], two (2) citizens of said city or town
	to be designated by the city manager of said city or town [mayor,
	the chief of police or the chief's authorized representative, the
	chief of the fire department or the chief's authorized
	representative, and the successors of the mayor, chief of police,
	and chief of the fire department], three (3) policemen [other than
	the chief or assistant chief,] to be elected by members of the
	policemen's pension fund, and three (3) firemen [other than the
	chief or assistant chief,] to be elected by members of the firemen's
	pension fund, composing eleven (11) members, seven (7) of which
	shall be a quorum, shall constitute a board of trustees of the
	Firemen and Policemen Pension Fund, to provide for the disbursement
	of the same and to designate the beneficiaries thereof. [The three
	policemen and the three firemen named above shall be elected to a
	term of four (4) years. The term for a citizen designated by the
	mayor is four (4) years.] The board shall be known as the Board of
	Firemen and Policemen Pension Fund, __________, Texas. Said board
	shall organize by choosing one member as Chairman and by appointing
	a secretary. Such board shall have charge of and administer said
	fund and shall order payments therefrom in pursuance of the
	provisions of this law. It shall report annually to the governing
	body of such city or town the condition of the said fund and the
	receipts and disbursements on account of the same with a complete
	list of beneficiaries of said fund and the amounts paid them.
	(b)  The members of the board of trustees serve four-year
	terms. [Of the first two (2) citizens designated by the mayor to
	serve on the board of trustees after the effective date of this
	subsection, one shall serve a four-year term and the other a
	two-year term. Thereafter all terms shall be for four (4) years.
	Of the first six (6) firemen and policemen elected after the
	effective date of this subsection, three (3) of the firemen and
	policemen shall serve four-year terms and three (3) of the firemen
	and policemen shall serve two-year terms. The first four-year
	terms shall not be served by all three members elected from the
	firemen's fund nor by all three members elected from the policemen's
	fund. This determination shall be made by lot under the supervision
	of the board. Thereafter all elected terms shall be for four (4)
	years.]
	SECTION 1.02.  Section 2, Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), is amended to read as follows:
	Sec. 2.  PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each
	member fireman and policeman in the employment of such city or town
	must participate in said fund, except in times of national
	emergency those persons as are employed during that time shall not
	be required to participate in the fund, and said city or town shall
	be authorized to deduct a sum of not less than one per cent (1%) nor
	in excess of six per cent (6%) of his wages from each month to form a
	part of the fund known as the Firemen and Policemen Pension Fund,
	except that the city or town shall deduct a sum less than one per
	cent (1%) or more than six per cent (6%) of the member's wages each
	month to form a part of the fund if the board of trustees of that
	fund increases or decreases the percentage of wages to be
	contributed to the fund under the provisions of Section 10A or 14A
	of this Act. The amount to be deducted from the wages of those named
	above who must participate in the fund is to be determined by the
	board of trustees as provided for in Section 1 of this Act within
	the minimum and maximum deductions herein provided or as otherwise
	provided under the provisions of Section 10A or 14A of this Act.
	SECTION 1.03.  Section 3, Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), is amended to read as follows:
	Sec. 3.  PAYMENTS TO FUND.  There shall be deducted for such
	fund from the wages of each fireman and policeman a sum to be
	determined by the board of trustees under the provisions of
	Sections [Section] 2, [or] 10A, and 14A of this Act. Any donations
	made to such fund and rewards received by any member of either of
	said funds, and all funds received from any source for such fund
	shall be deposited in like manner to the credit of such fund.
	SECTION 1.04.  Section 10A, Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), is amended to read as follows:
	Sec. 10A.  MODIFICATION OF BENEFITS, MEMBERSHIP
	QUALIFICATIONS, ELIGIBILITY REQUIREMENTS AND CONTRIBUTIONS;
	CONDITIONS.  (a)  Notwithstanding anything to the contrary in other
	parts of this Act and subject to Subsections (b) and (c) of this
	section, the Board of Trustees may, by majority vote of the whole
	board, make from time to time one or more of the following changes,
	or modifications:
	(1)  modify or change prospectively or retroactively in
	any manner whatsoever any of the benefits provided by this Act,
	except that any retroactive change or modification shall only
	increase pensions or benefits;
	(2)  modify or change prospectively in any manner
	whatsoever any of the membership qualifications;
	(3)  modify or change prospectively or retroactively in
	any manner whatsoever any of the eligibility requirements for
	pensions or benefits;
	(4)  increase or decrease prospectively the percentage
	of wages less than the one per cent (1%) minimum or above the six per
	cent (6%) maximum provided in Section 2 of this Act to be
	contributed to the fund; or
	(5)  provide prospectively for refunds, in whole or in
	part, and with or without interest, of contributions made to the
	fund by employees who leave the city service before qualifying for a
	pension.
	(b)  None of the changes made under Subsection (a) of this
	section may be made unless all of the following conditions are
	sequentially complied with:
	(1)  the change must be approved by a qualified actuary
	selected by a four-fifths vote of the Board; the actuary's approval
	must be based on an actuarial finding that the change is supported
	by the existing funding status of the fund; the actuary, if an
	individual, must be a Fellow of the Society of Actuaries or a Fellow
	of the Conference of Actuaries in Public Practice or a Member of the
	American Academy of Actuaries; the actuary, if an actuarial
	consulting firm, must be established in the business of providing
	actuarial consulting services to pension plans and have experienced
	personnel able to provide the requested services; the findings upon
	which the properly selected and qualified actuary's approval are
	based are not subject to judicial review;
	(2)  the change must be approved by a majority of all
	persons then making contributions to the fund as employees of a
	department to which the change would directly apply, voting by
	secret ballot at an election held after ten (10) days' notice given
	by posting at a prominent place in every station or substation of a
	department to which the change would directly apply and in the city
	hall;
	(3)  the changes, except changes made under the
	provisions of Subdivision (1), Subsection (a), of this section,
	shall apply only to active member employees who are members of the
	affected departments at the time the change becomes effective and
	those who enter the departments thereafter; and
	(4)  the changes shall not deprive any person, without
	his written consent, of any right to receive a pension or benefits
	which have already become vested and matured.
	(c)  If the Board of Trustees proposes to change benefits
	under Subdivision (1), Subsection (a), of this section, the change
	is not effective until the change is finally approved in accordance
	with this subsection. The Board shall submit the change for
	approval by the city's or town's governing body. If disapproved by
	the governing body, or if the governing body fails to act within
	sixty (60) days of presentation to the governing body, the Board, by
	resolution passed by a majority of the whole Board, plus one, may
	require the city's or town's governing body to hold an election, as
	soon as practicable, for approval of the change by the qualified
	voters of the city or town. Any change proposed and subsequently
	approved by the voters under this subsection becomes effective as
	of the beginning of the city's or town's next fiscal year.
	SECTION 1.05.  Chapter 101, Acts of the 43rd Legislature,
	1st Called Session, 1933 (Article 6243b, Vernon's Texas Civil
	Statutes), is amended by adding Section 14A to read as follows:
	Sec. 14A.  CONTRIBUTION INCREASES.  (a)  If at any time a
	qualified actuary that meets the requirements of Subdivision (1),
	Subsection (b), Section 10A of this Act, determines that the total
	contribution rate, expressed as a percentage of wages, is
	insufficient to amortize the unfunded actuarial accrued liability,
	as defined under the Governmental Accounting Standards Board
	Statement No. 25, over a period not to exceed forty (40) years:
	(1)  the city's or town's governing body may increase
	the city or town contribution rate; and
	(2)  to the extent that the city or town contribution
	rate increases under Subdivision (1) of this subsection, the member
	contribution rate must increase by an amount equal to the member
	contribution rate before the increase multiplied by a fraction:
	(A)  the numerator of which is the increase in the
	amount of city or town contribution rate; and
	(B)  the denominator of which is the amount of the
	city or town contribution rate before the increase.
	(b)  The sum of the city or town contribution rate and the
	member contribution rate after an increase under this section may
	not exceed the total contribution rate determined by the qualified
	actuary to be necessary to amortize the unfunded actuarial accrued
	liability over a forty (40) year period.
	SECTION 1.06.  (a)  In this section:
	(1)  "Board of trustees" means a board of trustees
	constituted under Section 1(a), Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes).
	(2)  "City or town" means a city or town that operates a
	Firemen and Policemen Pension Fund under Chapter 101, Acts of the
	43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes).
	(b)  The two citizen members of the board of trustees who are
	designated by the mayor of the city or town and who are serving on
	the board of trustees on the effective date of this article shall
	continue to serve for the remainder of the members' four-year
	terms.
	(c)  The mayor of the city or town or the mayor's authorized
	representative who is serving on the board of trustees on the
	effective date of this article shall continue to serve until the
	mayor appoints a third citizen member under this subsection.  As
	soon as practicable after the effective date of this article, the
	mayor shall appoint a citizen member to serve a four-year term.
	(d)  The chief of police or the chief's authorized
	representative and the chief of the fire department or the chief's
	authorized representative who are serving on the board of trustees
	on the effective date of this article shall continue to serve until
	the city manager of the city or town appoints two citizen members to
	the board of trustees under this subsection. As soon as practicable
	after the effective date of this article, the city manager shall
	appoint the two citizen members. The city manager shall designate
	one citizen member appointed under this subsection to serve a
	four-year term and, notwithstanding Section 1(b), Chapter 101, Acts
	of the 43rd Legislature, 1st Called Session, 1933 (Article 6243b,
	Vernon's Texas Civil Statutes), as amended by this article, shall
	designate one citizen member to serve a two-year term. The
	successors of the individuals appointed under this subsection shall
	serve four-year terms in accordance with Section 1(b), Chapter 101,
	Acts of the 43rd Legislature, 1st Called Session, 1933 (Article
	6243b, Vernon's Texas Civil Statutes), as amended by this article.
	(e)  A member of the board of trustees elected by the members
	of a firemen's pension fund or the members of a policemen's pension
	fund and serving on the effective date of this article shall
	continue to serve on the board for the remainder of the member's
	term.
	SECTION 1.07.  (a) This article is contingent on the
	deposit, not later than July 31, 2007, of at least $100 million to a
	Firemen and Policemen Pension Fund by a city or town that operates
	such a fund under Chapter 101, Acts of the 43rd Legislature, 1st
	Called Session, 1933 (Article 6243b, Vernon's Texas Civil
	Statutes).
	(b)  If no city or town described by Subsection (a) of this
	section makes the deposit described by that subsection on or before
	July 31, 2007, this article has no effect.
	(c)  A city or town described by Subsection (a) of this
	section that makes the deposit described by that subsection shall
	publish notice of the deposit in the Texas Register as soon as
	practicable after the date of the deposit.
	SECTION 1.08.  Subject to Section 1.07 of this article, this
	article takes effect September 1, 2007.
	ARTICLE 2.  CONTINGENT PROVISIONS EFFECTIVE SEPTEMBER 1, 2009
	SECTION 2.01. Section 1(a), Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), is reenacted to read as follows:
	(a)  In all incorporated cities and towns containing more
	than 550,000 inhabitants and less than 600,000 inhabitants, having
	a fully or partially paid fire department, the mayor or the mayor's
	authorized representative, two (2) citizens of said city or town to
	be designated by the mayor, the chief of police or the chief's
	authorized representative, the chief of the fire department or the
	chief's authorized representative, and the successors of the mayor,
	chief of police, and chief of the fire department, three (3)
	policemen other than the chief or assistant chief, to be elected by
	members of the policemen's pension fund, three (3) firemen other
	than the chief or assistant chief, to be elected by members of the
	firemen's pension fund, composing eleven (11) members, seven (7) of
	which shall be a quorum, shall constitute a board of trustees of the
	Firemen and Policemen Pension Fund, to provide for the disbursement
	of the same and to designate the beneficiaries thereof. The three
	policemen and the three firemen named above shall be elected to a
	term of four (4) years. The term for a citizen designated by the
	mayor is four (4) years. The board shall be known as the Board of
	Firemen and Policemen Pension Fund, __________, Texas. Said board
	shall organize by choosing one member as Chairman and by appointing
	a secretary. Such board shall have charge of and administer said
	fund and shall order payments therefrom in pursuance of the
	provisions of this law. It shall report annually to the governing
	body of such city or town the condition of the said fund and the
	receipts and disbursements on account of the same with a complete
	list of beneficiaries of said fund and the amounts paid them.
	SECTION 2.02.  Section 2, Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), is reenacted to read as follows:
	Sec. 2.  PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each
	member fireman and policeman in the employment of such city or town
	must participate in said fund, except in times of national
	emergency those persons as are employed during that time shall not
	be required to participate in the fund, and said city or town shall
	be authorized to deduct a sum of not less than one per cent (1%) nor
	in excess of six per cent (6%) of his wages from each month to form a
	part of the fund known as the Firemen and Policemen Pension Fund,
	except that the city or town shall deduct a sum less than one per
	cent (1%) or more than six per cent (6%) of the member's wages each
	month to form a part of the fund if the board of trustees of that
	fund increases or decreases the percentage of wages to be
	contributed to the fund under the provisions of Section 10A of this
	Act. The amount to be deducted from the wages of those named above
	who must participate in the fund is to be determined by the board of
	trustees as provided for in Section 1 of this Act within the minimum
	and maximum deductions herein provided or as otherwise provided
	under the provisions of Section 10A of this Act.
	SECTION 2.03.  Section 3, Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), is reenacted to read as follows:
	Sec. 3.  PAYMENTS TO FUND. There shall be deducted for such
	fund from the wages of each fireman and policeman a sum to be
	determined by the board of trustees under the provisions of Section
	2 or 10A of this Act. Any donations made to such fund and rewards
	received by any member of either of said funds, and all funds
	received from any source for such fund shall be deposited in like
	manner to the credit of such fund.
	SECTION 2.04.  Sections 10A(a) and (b), Chapter 101, Acts of
	the 43rd Legislature, 1st Called Session, 1933 (Article 6243b,
	Vernon's Texas Civil Statutes), are reenacted to read as follows:
	(a)  Notwithstanding anything to the contrary in other parts
	of this Act, the Board of Trustees may, by majority vote of the
	whole board, make from time to time one or more of the following
	changes, or modifications:
	(1)  modify or change prospectively or retroactively in
	any manner whatsoever any of the benefits provided by this Act,
	except that any retroactive change or modification shall only
	increase pensions or benefits;
	(2)  modify or change prospectively in any manner
	whatsoever any of the membership qualifications;
	(3)  modify or change prospectively or retroactively in
	any manner whatsoever any of the eligibility requirements for
	pensions or benefits;
	(4)  increase or decrease prospectively the percentage
	of wages less than the one per cent (1%) minimum or above the six per
	cent (6%) maximum provided in Section 2 of this Act to be
	contributed to the fund; or
	(5)  provide prospectively for refunds, in whole or in
	part, and with or without interest, of contributions made to the
	fund by employees who leave the city service before qualifying for a
	pension.
	(b)  None of the changes made under Subsection (a) of this
	section may be made unless all of the following conditions are
	sequentially complied with:
	(1)  the change must be approved by a qualified actuary
	selected by a four-fifths vote of the Board; the actuary, if an
	individual, must be a Fellow of the Society of Actuaries or a Fellow
	of the Conference of Actuaries in Public Practice or a Member of the
	American Academy of Actuaries; the findings upon which the
	properly selected and qualified actuary's approval are based are
	not subject to judicial review;
	(2)  the change must be approved by a majority of all
	persons then making contributions to the fund as employees of a
	department to which the change would directly apply, voting by
	secret ballot at an election held after ten (10) days' notice given
	by posting at a prominent place in every station or substation of a
	department to which the change would directly apply and in the city
	hall;
	(3)  the changes, except changes made under the
	provisions of Subdivision (1), Subsection (a), of this section,
	shall apply only to active member employees who are members of the
	affected departments at the time the change becomes effective and
	those who enter the departments thereafter; and
	(4)  the changes shall not deprive any person, without
	his written consent, of any right to receive a pension or benefits
	which have already become vested and matured.
	SECTION 2.05.  The following laws are repealed:
	(1)  Section 1(b), Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), as amended by Article 1 of this Act;
	(2)  Section 10A(c), Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), as added by Article 1 of this Act; and
	(3)  Section 14A, Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes), as added by Article 1 of this Act.
	SECTION 2.06.  (a) In this section:
	(1)  "Board of trustees" means a board of trustees
	constituted under Section 1(a), Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes).
	(2)  "City or town" means a city or town that operates a
	Firemen and Policemen Pension Fund under Chapter 101, Acts of the
	43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes).
	(b)  On the effective date of this article, the term of the
	citizen member of the board of trustees appointed by the mayor of
	the city or town under Section 1.06(c) of this Act terminates and
	the mayor or a representative designated by the mayor shall serve as
	a member of the board of trustees. The two other citizen members of
	the board of trustees who are designated by the mayor of the city or
	town and who are serving on the board of trustees on the effective
	date of this article shall continue to serve for the remainder of
	the members' four-year terms.
	(c)  On the effective date of this article, the terms of the
	two citizen members of the board of trustees appointed by the city
	manager under Section 1.06(d) of this Act terminate and the chief
	of police or the chief's authorized representative and the chief of
	the fire department or the chief's authorized representative shall
	serve as members of the board of trustees.
	(d)  A member of the board of trustees elected by the members
	of a firemen's pension fund or the members of a policemen's pension
	fund and serving on the effective date of this article shall
	continue to serve on the board for the remainder of the member's
	term.
	SECTION 2.07.  (a)  This article takes effect only if Article
	1 of this Act takes effect in accordance with Section 1.07 of this
	Act.  If Article 1 of this Act does not take effect, this article has
	no effect.
	(b)  Subject to Subsection (a) of this section, this article
	takes effect September 1, 2009, and supersedes Article 1 of this Act
	unless, not later than July 31, 2009, at least $110 million is
	deposited to a Firemen and Policemen Pension Fund by a city or town
	that operates such a fund under Chapter 101, Acts of the 43rd
	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
	Texas Civil Statutes).
	(c)  If a city or town described by Subsection (b) of this
	section makes the deposit described by that subsection on or before
	July 31, 2009, this article has no effect.
	(d)  A city or town described by Subsection (b) of this
	section that makes the deposit described by that subsection shall
	publish notice of the deposit in the Texas Register as soon as
	practicable after the date of the deposit.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3355 was passed by the House on May 8,
	2007, by the following vote:  Yeas 146, Nays 0, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3355 was passed by the Senate on May
	23, 2007, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor