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  H.B. No. 3310
 
 
 
 
AN ACT
  relating to the funding policies, actuarial valuations, and
  reporting requirements of certain public retirement systems.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 801.209(a), Government Code, is amended
  to read as follows:
         (a)  For each public retirement system, the board shall post
  on the board's Internet website, or on a publicly available website
  that is linked to the board's website, the most recent data from
  reports received under Sections 802.101, 802.103, 802.104,
  802.105, [and] 802.108, 802.2015, and 802.2016.
         SECTION 2.  Section 802.002(a), Government Code, is amended
  to read as follows:
         (a)  Except as provided by Subsection (b), the Employees
  Retirement System of Texas, the Teacher Retirement System of Texas,
  the Texas County and District Retirement System, the Texas
  Municipal Retirement System, and the Judicial Retirement System of
  Texas Plan Two are exempt from Sections 802.101(a), 802.101(b),
  802.101(d), 802.102, 802.103(a), 802.103(b), 802.2015, 802.2016,
  802.202, 802.203, 802.204, 802.205, 802.206, and 802.207. The
  Judicial Retirement System of Texas Plan One is exempt from all of
  Subchapters B and C except Sections 802.104 and 802.105. The
  optional retirement program governed by Chapter 830 is exempt from
  all of Subchapters B and C except Section 802.106.
         SECTION 3.  Section 802.101(a), Government Code, is amended
  to read as follows:
         (a)  The governing body of a public retirement system shall
  employ an actuary, as a full-time or part-time employee or as a
  consultant, to make a valuation at least once every three years of
  the assets and liabilities of the system on the basis of assumptions
  and methods that are reasonable in the aggregate, considering the
  experience of the program and reasonable expectations, and that, in
  combination, offer the actuary's best estimate of anticipated
  experience under the program. The valuation must include a
  recommended contribution rate needed for the system to achieve and
  maintain an amortization period that does not exceed 30 years.
         SECTION 4.  Section 802.1014, Government Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  Except as provided by Subsection (c), a public
  retirement system that has assets of at least $100 million shall
  conduct once every five years an actuarial experience study and
  shall submit to the board a copy of the actuarial experience study
  before the 31st day after the date of the study's adoption.
         SECTION 5.  Subchapter C, Chapter 802, Government Code, is
  amended by adding Sections 802.2015 and 802.2016 to read as
  follows:
         Sec. 802.2015.  FUNDING SOUNDNESS RESTORATION PLAN. (a)  In
  this section, "governmental entity" has the meaning assigned by
  Section 802.1012.
         (b)  This section applies to a public retirement system and
  its associated governmental entity other than a public retirement
  system and its associated governmental entity subject to Section
  802.2016.
         (c)  A public retirement system shall notify the associated
  governmental entity in writing if the retirement system receives an
  actuarial valuation indicating that the system's actual
  contributions are not sufficient to amortize the unfunded actuarial
  accrued liability within 40 years.  If a public retirement system's
  actuarial valuation shows that the system's amortization period has
  exceeded 40 years for three consecutive annual actuarial
  valuations, or two consecutive actuarial valuations in the case of
  a system that conducts the valuations every two or three years, the
  governing body of the public retirement system and the associated
  governmental entity shall formulate a funding soundness
  restoration plan under Subsection (e) in accordance with the
  system's governing statute.
         (d)  The governing body of a public retirement system and the
  associated governmental entity that have formulated a funding
  soundness restoration plan under Subsection (e) shall formulate a
  revised funding soundness restoration plan under that subsection,
  in accordance with the system's governing statute, if the system
  conducts an actuarial valuation showing that:
               (1)  the system's amortization period exceeds 40 years;
  and 
               (2)  the previously formulated funding soundness
  restoration plan has not been adhered to.
         (e)  A funding soundness restoration plan formulated under
  this section must:
               (1)  be developed by the public retirement system and
  the associated governmental entity in accordance with the system's
  governing statute; and
               (2)  be designed to achieve a contribution rate that
  will be sufficient to amortize the unfunded actuarial accrued
  liability within 40 years not later than the 10th anniversary of the
  date on which the final version of a funding soundness restoration
  plan is agreed to.
         (f)  A public retirement system and the associated
  governmental entity that formulate a funding soundness restoration
  plan shall report any updates of progress made by the entities
  toward improved actuarial soundness to the board every two years.
         (g)  Each public retirement system that formulates a funding
  soundness restoration plan as provided by this section shall submit
  a copy of that plan to the board and any change to the plan not later
  than the 31st day after the date on which the plan or the change is
  agreed to.
         Sec. 802.2016.  FUNDING SOUNDNESS RESTORATION PLAN FOR
  CERTAIN PUBLIC RETIREMENT SYSTEMS. (a) In this section,
  "governmental entity" has the meaning assigned by Section 802.1012.
         (b)  This section applies only to a public retirement system
  that is governed by Article 6243i, Revised Statutes. 
         (c)  A public retirement system shall notify the associated
  governmental entity in writing if the retirement system receives an
  actuarial valuation indicating that the system's actual
  contributions are not sufficient to amortize the unfunded actuarial
  accrued liability within 40 years. If a public retirement system's
  actuarial valuation shows that the system's amortization period has
  exceeded 40 years for three consecutive annual actuarial
  valuations, or two consecutive actuarial valuations in the case of
  a system that conducts the valuations every two or three years, the
  associated governmental entity shall formulate a funding soundness
  restoration plan under Subsection (e) in accordance with the public
  retirement system's governing statute.
         (d)  An associated governmental entity that has formulated a
  funding soundness restoration plan under Subsection (e) shall
  formulate a revised funding soundness restoration plan under that
  subsection, in accordance with the public retirement system's
  governing statute, if the system conducts an actuarial valuation
  showing that:
               (1)  the system's amortization period exceeds 40 years;
  and 
               (2)  the previously formulated funding soundness
  restoration plan has not been adhered to.
         (e)  A funding soundness restoration plan formulated under
  this section must:
               (1)  be developed in accordance with the public
  retirement system's governing statute by the associated
  governmental entity; and
               (2)  be designed to achieve a contribution rate that
  will be sufficient to amortize the unfunded actuarial accrued
  liability within 40 years not later than the 10th anniversary of the
  date on which the final version of a funding soundness restoration
  plan is formulated.
         (f)  An associated governmental entity that formulates a
  funding soundness restoration plan shall report any updates of
  progress made by the public retirement system and associated
  governmental entity toward improved actuarial soundness to the
  board every two years.
         (g)  An associated governmental entity that formulates a
  funding soundness restoration plan as provided by this section
  shall submit a copy of that plan to the board and any change to the
  plan not later than the 31st day after the date on which the plan or
  the change is formulated.
         SECTION 6.  A public retirement system subject to Section
  802.2015, Government Code, as added by this Act, or a governmental
  entity subject to Section 802.2016, Government Code, as added by
  this Act, shall formulate a funding soundness restoration plan, if
  required to do so under the applicable section, based on the most
  recent actuarial valuation study conducted under Section 802.101,
  Government Code, as amended by this Act, not later than November 1,
  2016. The first actuarial valuation study that is conducted for or
  by a public retirement system on or after the effective date of this
  Act must include a recommended contribution rate.
         SECTION 7.  (a)  Except as provided by Subsection (b) of this
  section, a public retirement system subject to Section
  802.1014(b-1), Government Code, as added by this Act, shall conduct
  the first actuarial experience study required by Section
  802.1014(b-1), Government Code, as added by this Act, not later
  than September 1, 2016.
         (b)  A public retirement system subject to Section
  802.1014(b-1), Government Code, as added by this Act, that
  conducted an actuarial experience study after August 31, 2011, and
  on or before the effective date of this Act, shall conduct the first
  actuarial experience study required by Section 802.1014(b-1),
  Government Code, as added by this Act, not later than the fifth
  anniversary of the date of that preceding study.
         SECTION 8.  This Act takes effect immediately if it 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, this
  Act takes effect September 1, 2015.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3310 was passed by the House on May 7,
  2015, by the following vote:  Yeas 142, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 3310 on May 29, 2015, by the following vote:  Yeas 143, Nays 2,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 3310 was passed by the Senate, with
  amendments, on May 27, 2015, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor