HBA-SEB C.S.S.B. 1130 76(R)BILL ANALYSIS
Office of House Bill AnalysisC.S.S.B. 1130
By: Armbrister
Pensions and Investments
5/21/1999
Committee Report (Substituted)
BACKGROUND AND PURPOSE
Currently, the Employees Retirement System of Texas (ERS) provides a
service retirement program in addition to disability, death, and survivor
benefits to state employees, state judges and elected state officials. ERS
also administers the Uniform Group Insurance Program which provides health
coverage and optional dental, disability, life, and accident insurance to
employees, retirees, and dependents of state agencies and institutions of
higher education. Additionally, ERS provides a deferred compensation plan
and cafeteria plan. During the interim following the 75th Texas
Legislature, Regular Session, the Senate State Affairs Committee reviewed
the policies and procedures of ERS and made recommendations that serve as
the basis for this bill.
C.S.S.B. 1130 expedites the refund of member accounts, modifies retirement
eligibility for certain peace officers, allows service credit for annual
leave for the purpose of determining retirement eligibility, provides a
partial lump sum distribution option, modifies the composition and
investment authority of the system's insurance contingency reserve fund,
provides an annuity increase for ERS retirees and survivor annuitants,
allows annuitants to obtain accelerated benefits from life insurance
policies, and authorizes a continued state contribution toward survivor
insurance coverage, and makes other administrative and technical changes.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the board of trustees of the Employees
Retirement System of Texas in SECTION 17 (Section 814.1082, Government
Code), SECTION 29 (Section 815.511, Government Code), and SECTION 36
(Section 4B, Article 3.50-2, V.T.C.S.) of this bill. It is also the
opinion of the Office of House Bill Analysis that rulemaking authority
previously delegated to the board of trustees of the Employees Retirement
System of Texas is modified in SECTION 43 (Section 11A, Article 3.50-2,
V.T.C.S.) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 803.402, Government Code, to provide that
records of members and beneficiaries of a retirement system to which this
chapter (Proportionate Retirement Program) applies that are in the custody
of any such retirement system are confidential and not subject to
disclosure and are exempt from the public access provisions of Chapter 522
(Public Information), except as provided by Section 825.507
(Confidentiality of Information about Members, Retirees, Annuitants,
Beneficiaries, or Alternate Payees). Makes conforming changes.
SECTION 2. Amends Section 805.008, Government Code, by amending Subsection
(c) and adding Subsection (h), as follows:
(c) Establishes that Subsection (h) is an exception to this subsection,
which authorizes the Employees Retirement System of Texas (ERS) and the
Teacher Retirement System of Texas, by rule, to require the retirement
system from which credit is transferred to pay monthly a specific amount.
(h) Requires a transfer of an amount equal to the portion of the actual
value of a lump sum payment that represents the percentage of the amount of
service credit transferred to be made at the time the lump sum is made if
a person elects to receive a partial lump-sum payment under the law
governing the retirement system from which the person is retiring.
SECTION 3. Amends Section 811.001, Government Code, by amending
Subdivision (8) and adding Subdivision (18) to redefine "custodial officer"
and to define "parole officer."
SECTION 4. Amends Section 812.101(a), Government Code, to provide that one
condition of a member of ERS being authorized to withdraw all of the
member's accumulated contributions for service credited in the employee
class is if the member does not assume or resume a position included in
that class during the 30 days after the date on which the member terminates
employment, rather than during the calendar month following the month of
termination.
SECTION 5. Amends Section 812.104, Government Code, by amending Subsection
(a) and adding Subsection (c), as follows
(a) Provides that Subsection (c) is an exception to this subsection, which
provides that deposits representing interest or membership fees that are
required of a member to establish service credit are not refundable.
(c) Requires ERS to refund any contributions, interest, or membership fees
used to establish service credit that is not used in computing the amount
of an annuity at the time a service retirement, disability retirement, or
death benefit annuity becomes payable.
SECTION 6. Amends Section 813.102(b), Government Code, to delete a
provision that establishes that in order for a member to reestablish credit
with ERS, the member needs to deposit all membership fees due.
SECTION 7. Amends Section 813.104(b), Government Code, to make
nonsubstantive changes.
SECTION 8. Amends Section 813.201(b), Government Code, to prohibit a
member from accruing or establishing service credit in the employee class
of membership when the total amount of service credit, multiplied by the
percentage in effect for computing annuities, would exceed the number 100.
Makes this prohibition effective after August 31, 1997, rather than August
31, 1991. Makes conforming changes.
SECTION 9. Amends Section 813.202(b), Government Code, to make a
conforming change.
SECTION 10. Amends Section 813.402(b), Government Code, to make a
conforming change.
SECTION 11. Amends Sections 813.506(b) and (c), Government Code, as
follows:
(b) Provides that service must be performed as a parole officer or
caseworker or must meet certain requirements by specified persons in order
for the service to be creditable as custodial officer service.
(c) Adds the Board of Pardons and Paroles to the list of entities which
are required, as applicable, to determine a person's eligibility to receive
credit as a custodial officer. Makes conforming changes.
SECTION 12. Amends Subchapter F, Chapter 813, Government Code, by adding
Section 813.511, as follows:
Sec. 813.511. CREDIT FOR ACCUMULATED ANNUAL LEAVE. (a) Entitles a member
to service credit in ERS for the member's annual leave that has accumulated
and is unused on the last day of employment if the member holds a position
in the employee class of membership during the month of the member's
effective date of retirement and if the member retires based on service or
a disability. Sets forth the rate used to establish credit in ERS for
annual leave.
(b) Authorizes a member in the employee class to use annual leave
creditable under this section to satisfy service requirements for
retirement under Section 814.104 (Eligibility of Member for Service
Retirement) or 814.107 (Service Retirement Benefits for Certain Peace
Officers) if the annual leave attributed to the eligibility requirements
remains otherwise unused on the last day of employment.
(c) Requires the disbursing officer of each department or agency to
certify to ERS the name of each person whose retirement from the department
or agency, and from state service, became effective during the preceding
month and the amount of the person's accumulated annual leave on the last
day of employment. Requires this certification to take place before the
11th day after the effective date of retirement and except as provided by
Subsection (d).
(d) Requires the disbursing officer of a department or agency to certify
to ERS the amount a member's accumulated and unused annual leave if the
department or agency employs a member who applies for retirement under
Subsection (b). Requires this certification to take place between 30 and
90 days before the effective date of the member's retirement. Requires the
officer to immediately notify ERS if the member uses annual leave after the
date of certification.
(e) Requires ERS to grant any credit to which a retiring member or retiree
who is a subject of a certification is entitled on receipt of a
certification under Subsection (c) or (d). Provides that an increase in the
computation of an annuity because of credit for accumulated annual leave
after a certification under Subsection (d) begins with the first payment
that becomes due after the certification.
(f) Requires ERS to cancel the retirement of a person who used creditable
annual leave to qualify for service retirement if the annual leave is
otherwise used by the person before the effective date of retirement.
SECTION 13. Amends Section 814.104, Government Code, by amending
Subsection (a) and adding Subsection (c), as follows:
(a) Provides that a member who has service credit in ERS is eligible to
retire and receive a service retirement annuity if the member has at least
five years of service credit in the employee class and the member is either
60 years old or the sum of the member's years of service and age equals or
exceeds the number 80. Makes conforming changes.
(c) Requires ERS, for the sole purpose of determining eligibility to
receive a service retirement annuity, to consider service performed as a
participant in the optional retirement program under Chapter 830 (Optional
Retirement Program) as if it were service for which credit is established
in ERS.
SECTION 14. Amends Section 814.1041, Government Code, to provide that this
section (Temporary Service Retirement Option for Members Affected by
Privatization or Other Reduction in Workforce) applies only to members of
the employee class who are not otherwise eligible to retire and whose
positions with specific state agencies are eliminated as a result of
privatization or other reductions in workforce. Includes the Texas
Department of Health along with the Texas Workforce Commission, Texas
Department of Human Services, and Texas Department of Mental Health and
Mental Retardation as the agencies whose employees are eligible for the
temporary service retirement option. Establishes that such a member is
eligible to retire and receive a service retirement annuity if the member's
age and service credit, each equally increased only as needed to meet the
minimum age and service requirements, but not by more than three years,
would meet those requirements at the time of separation from service.
Redesignates Subsection (f) to (d). Makes conforming changes.
SECTION 15. Amends Subchapter B, Chapter 814, Government Code, by adding
Section 814.1042, as follows:
Sec. 814.1042. SERVICE FOR CERTAIN GOVERNMENTAL EMPLOYERS. Requires ERS
to consider not more than 60 months or portions of months of service
performed for a Texas governmental employer that does not participate in
the proportionate retirement program by a member who has at least five
years of service credit, excluding military service, in the employee class
as if it were service for which credit is established in ERS. Provides
that this consideration is for the sole purpose of determining eligibility
to receive a service retirement annuity according to the sum of the
member's years of service and age. Provides that a member who seeks the
application of this section must provide documentation satisfactory to ERS
of the amount of service performed for the governmental employer. Prohibits
service described by this section from being used in determining
eligibility in the Texas Employees Uniform Group Insurance Act.
SECTION 16. Amends Sections 814.107(c), (d), and (e), Government Code, as
follows:
(c) Provides that the standard combined service retirement annuity that is
payable to certain peace officers under this section is based on
retirement on or after the attainment of the normal retirement age, which
is the age of 50 or the age at which the sum of the member's age and years
of service credit in the employee class equals the number 80, whichever is
earlier. Entitles a law enforcement officer or custodial officer to an
annuity that is actuarially reduced if the officer retires before reaching
the normal retirement age. Makes conforming changes.
(d) Makes a conforming change.
(e) Makes a conforming change.
SECTION 17. Amends Subchapter B, Chapter 814, Government Code, by adding
Section 814.1082, as follows:
Sec. 814.1082. PARTIAL LUMP SUM OPTION. (a) Authorizes a member to
select a standard service retirement annuity or an optional retirement
annuity described by Section 814.108 (Optional Service Retirement Benefits)
together with a partial lump sum distribution.
(b) Prohibits the amount of the lump sum payment from exceeding the sum of
36 months of a standard service retirement annuity computed without regard
to this section.
(c) Requires the service retirement annuity selected by the member to be
actuarially reduced to reflect the lump sum option elected by the member
and to be actuarially equivalent to a standard or optional service
retirement annuity, as applicable, without the partial lump sum
distribution. Requires the annuity and lump sum to be computed to result
in no actuarial loss to ERS.
(d) Provides that unless otherwise specified in rules adopted by the board
of trustees of ERS (board), the lump sum distribution will be made as a
single payment payable at the time that the first monthly annuity payment
is paid to the retiree.
(e) Establishes that the amount of the lump sum distribution will be
deducted from any amount otherwise payable under Section 814.505 (Return of
Excess Contributions in Other Circumstances).
(f) Authorizes the partial lump sum option to be elected only once by a
member and prohibits it from being elected by a retiree. Provides that a
member retiring under the proportionate retirement program is not eligible
for the partial lump sum distribution.
(g) Requires ERS to provide a written notice to a member of the amount by
which the member's annuity will be reduced because of a selection of a
partial lump-sum distribution. Requires the member to be asked to sign a
copy of or receipt for the notice. Requires ERS to maintain the signed copy
or receipt.
(h) Authorizes the board to adopt rules for the implementation of this
section and to authorize the option to be used for a death benefit annuity.
Establishes that this section does not apply to a disability retirement
annuity.
SECTION 18. Amends Section 814.202, Government Code, by adding Subsection
(d), to require ERS, for the sole purpose of determining eligibility to
receive a disability retirement annuity under Subsection (a)(3) (regarding
a member's eligibility for a nonoccupational disability with 10 years of
service credit), to consider service performed in the optional retirement
program as if it were service for which credit is established in ERS.
SECTION 19. Amends Section 814.302(b), Government Code, to authorize a
person's surviving spouse to select a plan in the same manner that the
decedent could have made the selection if the decedent had retired on the
last day of the month of death if the decedent was a contributing member of
the employee class, had at least three years of service credit in that
class, and would have been eligible to retire under the proportionate
retirement program.
SECTION 20. Amends Section 815.103, Government Code, by adding Subsection
(d), to authorize the board to accept gifts of money or other property on
behalf of ERS from any public or private source.
SECTION 21. Amends Section 815.110(e), Government Code, to require that
the board's selection of an independent auditor be in accordance with the
requirements of Chapter 2254 (Professional and Consulting Services) for
obtaining the services of a certified public accountant. Makes conforming
and nonsubstantive changes.
SECTION 22. Amends Section 815.202(f), Government Code, to authorize the
executive director of the board (executive director) to delegate to an
employee of ERS any right, power, or duty assigned to the executive
director if the board does not specifically delegate them to another
employee of ERS.
SECTION 23. Amends Section 815.208, Government Code, by adding Subsections
(d) and (e), as follows:
(d) Authorizes the board to compensate employees of ERS at the rate equal
to the employees' regular rate of pay for work performed on a legal holiday
or for other compensatory time accrued when taking compensatory time off
would be disruptive to the system's normal business functions, whether
subject to or exempt from the overtime provisions of the Fair Labor
Standards Act of 1938.
(e) Exempts ERS from Subchapter K, Chapter 659 (Compensation) and Chapter
660 (Travel Expenses), to the extent the board determines an exemption is
necessary for the performance of fiduciary duties.
SECTION 24. Amends Section 815.301, Government Code, by adding Subsection
(f) to define "securities."
SECTION 25. Amends Section 815.322, Government Code, to require the
executive director, rather than the board, to make a transfer to make the
amount in the retirement annuity reserve account equal to the actuarial
present value of the annuities for which a transfer of assets has been made
under Section 815.319 (Transfer of Assets on Retirement and Restoration to
Active Service), after making other specific transfers.
SECTION 26. Amends Section 815.502(a), Government Code, to authorize,
rather than require, ERS to mail a notice to the member if a valid
application for payment is not filed with ERS before the expiration of five
years after the last month for which credit was established.
SECTION 27. Amends Section 815.503, Government Code, as follows:
Sec. 815.503. New title: RECORDS. (a) Establishes that records of
members and annuitants under retirement plans administered by ERS that are
in the custody of ERS or of an administrator, carrier, or other
governmental agency acting in cooperation with or on behalf of ERS are
confidential and not subject to public disclosure and are exempt from
public access, except as otherwise provided by this section. Makes
conforming changes.
(b) Authorizes records to be released to a member or annuitant or to an
authorized attorney, family member, or representative acting on behalf of
the member or annuitant. Authorizes ERS to release the records to an
administrator, carrier, or agency or attorney acting on behalf of ERS, to
another governmental entity having a legitimate need for the information to
perform the purposes of ERS, or to a party in response to a subpoena.
(c) Provides that the records of a member or annuitant remain confidential
after release to an authorized person. Authorizes the records to become
part of the public record of an administrative or judicial proceeding
related to certain contested cases, unless the records are closed to public
access by a protective order.
SECTION 28. Amends Section 815.505, Government Code, to require the Board
of Pardons and Paroles to certify to ERS the name of an employee and other
information relating to the employee's beginning or termination of
employment as a law enforcement officer or custodial officer.
SECTION 29. Amends Section 815.511, Government Code, as follows:
Sec. 815.511. New title: ADMINISTRATIVE DECISION; APPEAL AND NEGOTIATION.
(a) Authorizes the board to modify or delete a proposed finding of fact or
conclusion of law contained in a proposal for decision submitted by an
administrative law judge or other hearing examiner, or to make alternative
findings of fact and conclusions of law in a proceeding considered to be a
contested case under Chapter 2001 (Administrative Procedure). Requires the
board to state in writing the specific reason for its determination and
authorizes the board to adopt rules for the implementation of this
subsection.
(b) Provides that an appeal of a decision of ERS is considered to be an
appeal of a contested case under the administrative procedure law.
(c) Authorizes ERS and a person aggrieved by a decision of ERS to
informally negotiate an award of benefits. Prohibits negotiated benefits
from exceeding the maximum benefits otherwise available or required by law.
(d) Authorizes the executive director to refer an appeal to the State
Office of Administrative Hearings for a hearing or to employ or contract
for the services of an administrative law judge or hearing examiner not
affiliated with that office to conduct the hearing.
SECTION 30. Amends Section 840.102, Government Code, by amending
Subsection (a) and adding Subsection (g), as follows:
(a) Establishes that Subsection (g) is an exception to this subsection,
which requires a judicial officer who is a member of the Judicial
Retirement System of Texas Plan Two (JRS) to contribute six percent of the
officer's state compensation to JRS.
(g) Provides that a member who accrues 20 years of service credit in JRS
ceases making contributions but is considered a contributing member for all
other purposes.
SECTION 31. Amends Section 840.103(b), Government Code, to require ERS to
certify specific costs to the Legislative Budget Board and to the budget
division of the governor's office for review not later than December 31,
rather than before November 2, of each even-numbered year.
SECTION 32. Amends Section 840.301, Government Code, by adding Subsection
(c) to define "securities."
SECTION 33. Amends Section 840.402, Government Code, to provide that
records of members and annuitants of JRS are confidential within specific
terms. Makes conforming changes.
SECTION 34. Amends Section 3(a)(18), Article 3.50-2, V.T.C.S. (Texas
Employees Uniform Group Insurance Benefits Act), to delete existing text
stating that the term "institution of higher education" does not include
Texas Tech University and the University of Houston System unless either of
those entities elects to participate in the Texas Employees Uniform Group
Insurance Benefits Program.
SECTION 35. Amends Section 3A, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), as follows:
Sec. 3A. New title: PARTICIPATION BY CERTAIN ENTITIES. (a) Requires the
Texas Municipal Retirement System and the Texas County and District
Retirement System (TCDRS) to participate in the Texas Employees Uniform
Group Insurance Program administered by ERS under this Act. Provides that
participation is limited to the officers and employees of the systems, and
eligible dependents of those persons, and certain persons who have retired
from either system. Specifies that an officer or employee of either system
is an annuitant for purposes of this Act. Establishes that participation
does not include the governing bodies of either system, municipalities or
subdivisions participating in either system or the trustees, officers,
employees, or their dependents of the participating municipalities or
subdivisions. Prohibits a participant from receiving a state contribution
for premiums. Makes conforming changes.
(b) Authorizes a person to obtain coverage for the person's dependents as
any other participating annuitant if the person meets specific conditions.
An eligible person is one who began employment with or became an officer of
the Texas Turnpike Authority within the three-year period preceding August
31, 1997, was an officer or employee of the Texas Turnpike Authority on
that date, became an officer or employee of the North Texas Tollway
Authority on September 1, 1997, and retires or is eligible to retire with
at least 10 years of service credit under the proportionate retirement
program or under one of the public retirement systems to which Chapter 803
applies.
SECTION 36. Amends Section 4B, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), by adding Subsection (c-1), (c-2),
and (c-3), as follows:
(c-1) Authorizes the board to modify or delete a proposed finding of fact
or conclusion of law contained in a proposal for decision submitted by an
administrative law judge or to make alternative findings of fact and
conclusions of law in a proceeding considered to be a contested case.
Requires the board to state in writing the specific reason for the
determination and authorizes the board to adopt rules for the
implementation of this subsection.
(c-2) Authorizes a person and the board to informally negotiate an award
of benefits if the person has standing to pursue an administrative appeal.
Prohibits negotiated benefits from exceeding the maximum benefits otherwise
available or required by law.
(c-3) Authorizes the executive director to refer an appeal to the State
Office of Administrative Hearings for a hearing or to employ or contract
for the services of an administrative law judge or hearing examiner not
associated with that office to conduct the hearing.
SECTION 37. Amends Section 5, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), by amending Subsections (a), (d),
and (f) and adding Subsection (e), as follows:
(a) Requires the board to determine the coverages desired for state
employees and other eligible participants. Requires an actuary selected by
the board to advise the board as to the actuarial soundness of bids
received for a contract. Requires the board to submit the coverages
provided by the group plan for competitive bidding at least every six
years. Deletes existing text regarding the State Board of Insurance. Makes
conforming and nonsubstantive changes.
(d) Deletes an exception to the prohibition against a department
establishing, continuing, or authorizing payroll deductions or reductions
for any benefits or coverage without the express approval of the board.
(e) Requires the board, within a specific time frame, to estimate the
expenditures from the fund anticipated for self-funded plans for an average
60-day period during the biennium, considering claims and administrative
expenses that are projected to be incurred. Requires the board to place
the estimated amount in a contingency reserve fund to provide for adverse
fluctuations in claims or administrative expenses. Requires the board to
include in each request for legislative appropriations to the program the
amount the board determines to be necessary to maintain the contingency
reserve fund at the level required by this subsection. Authorizes the board
to invest and reinvest any portion of the contingency reserve fund under a
certain standard of care, considering the functional need to provide for
adverse fluctuations in claims or administrative expenses. Requires the
interest on, earnings of, and proceeds from the sale of investments to be
credited to the contingency fund.
(f) Deletes existing text regarding an unrestricted balance of the fund.
Makes a conforming change.
SECTION 38. Amends Section 6, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), as follows:
Sec. 6. New title: BENEFIT CERTIFICATES; IDENTIFICATION CARDS.
Authorizes the board to issue a single identification card to participants
in a health benefits plan and separately administered coverage that offers
pharmacy benefits. Authorizes the card to contain information regarding
both health and pharmacy benefits.
SECTION 39. Amends Section 7, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), to require the board to make a
written report not later than January 1 of each year to the governor,
lieutenant governor, speaker of the house of representatives, and
Legislative Budget Board concerning the coverages provided and the benefits
and services being received by all employees insured under the provisions
of this Act. Establishes that the report includes information about the
effectiveness and efficiency of managed care cost containment practices and
fraud detection and prevention procedures. Deletes existing text regarding
the State Board of Insurance. Makes conforming changes.
SECTION 40. Amends Section 8, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), to authorize the board, in its sole
discretion and under conditions it approves, to reinsure any coverage that
it has determined will be provided directly with the fund. Deletes existing
text regarding reinsurance.
SECTION 41. Amends Section 10, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), by adding Subsection (c), to provide
that the records of a participant in the Texas Employee Uniform Group
Insurance Program in the custody of the board, or of an administrator or
carrier acting on the board's behalf, are confidential and not subject to
disclosure and are exempt from public access, except as provided by this
subsection. Authorizes records to be released to a participant or to an
authorized attorney, family member, or representative acting on behalf of
the participant. Authorizes the board to release the records to an
administrator, carrier, or agent or attorney acting on behalf of the board,
to another governmental entity or to a medical provider of the participant
for the purpose of carrying out the purposes of this Act, or to a party in
response to a subpoena. Provides that the records of a participant remain
confidential after release to a person authorized under this subsection.
Authorizes a participant's records to become part of the public record of
an administrative or judicial proceeding, unless the records are closed to
public access by a protective order.
SECTION 42. Amends Section 11(e)(3), Article 3.50-2, V.T.C.S. (Texas
Employees Uniform Group Insurance Benefits Act), to provide that an
annuitant participating in optional term life insurance coverage is
eligible for accelerated life insurance benefits as provided by rules
adopted under the authority of Subsection (d) (regarding rules adopted by
the board for accelerated life insurance benefits for terminally ill,
terminally injured, or permanently disabled participants), as added by
Chapter 1048, Acts of the 75th Legislature, Regular Session, 1997. Makes
conforming and nonsubstantive changes.
SECTION 43. Amends Section 11A, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), to require the board to adopt rules
that include a provision authorizing an employee, annuitant, or dependent
to make, in conjunction with receipt of a viatical settlement, an
irrevocable designation of beneficiary for part or all of the group life
coverage benefits. Provides that a viatical settlement is not valid for
coverage under the Texas Employees Uniform Group Insurance Program unless
the employee, annuitant, or dependent has a terminal illness or terminal
injury, as defined by rules adopted by the board, at the time application
for benefits is made. Makes a conforming change.
SECTION 44. Amends Section 13, Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act), by adding Subsection (e), to provide
that a former member of a board or commission described by Section
3(a)(5)(A)(vi) (regarding the definition of "employee") or a former member
of the governing body of an institution of higher education remains
eligible for participation in a group health coverage plan offered under
this Act as long as no lapse in coverage occurs after the end of the former
member's term, except as provided by Section 13A (Expulsion from Group
Insurance Program). Prohibits a participant from receiving a state
contribution for premiums. Authorizes the governing body of an institution
of higher education to elect to pay from local funds part or all of the
contributions the state would pay for similar coverage of other
participants in the program. Sets forth a limit for the participant's
contribution for coverage under a group health coverage plan.
SECTION 45. Amends Section 13B(d), Article 3.50-2, V.T.C.S. (Texas
Employees Uniform Group Insurance Benefits Act), to delete an exception to
the requirement that each employee be enrolled in the premium conversion
benefit portion of the cafeteria plan.
SECTION 46. Amends Article 3.50-2, V.T.C.S. (Texas Employees Uniform Group
Insurance Benefits Act), by adding Section 16A, as follows:
Sec. 16A. MANAGEMENT OF ASSETS. Authorizes the board, for investment
purposes, to commingle the assets of any fund created under this Act with
any other fund created under this Act or any other trust fund administered
by the board, as long as proportionate ownership records are maintained and
credited.
SECTION 47. Amends Article 3.50-2, V.T.C.S. (Texas Employees Uniform Group
Insurance Benefits Act), by adding Section 16C, as follows:
Sec. 16C. EMPLOYEES' HEALTH CARE STABILIZATION TRUST FUND. Provides that
the employees' health care stabilization trust fund is a special fund in
the treasury outside the general revenue fund. Provides that the fund is
composed of money transferred to the fund at the direction of the
legislature, gifts and grants, and the returns received as interest.
Requires the board to administer the fund. Authorizes the board to manage
and invest the money in the fund under a specific standard of care, and
requires the board to make investments in a manner that preserves the
fund's purchasing power. Prohibits money in the fund from being spent for
any purpose, except that the interest and investment returns may be
appropriated only for the purpose of stabilizing the cost of the state and
participant contributions for health care coverage by minimizing increases
in those contributions. Exempts the fund from the application of Section
403.095, Government Code (Use of Dedicated Revenue).
SECTION 48. Amends Section 18(a), Article 3.50-2, V.T.C.S. (Texas
Employees Uniform Group Insurance Benefits Act), to require that one member
of the group benefits advisory committee be a state employee of a state
agency eligible for membership in the Texas Small State Agency Task Force,
rather than an agency other than one of the eight largest state agencies.
SECTION 49. Amends Section 19(b), Article 3.50-2, V.T.C.S. (Texas
Employees Uniform Group Insurance Benefits Act), to require the state, if
funds are specifically appropriated for the purpose, to pay the same
portion of the cost of the required contributions for a deceased retiree's
surviving spouse or other surviving dependent who elects to retain coverage
as it pays for similar dependent coverage for an employee or retiree
participating in the program.
SECTION 50. Amends Section 403.026(a), Government Code, to delete a
requirement that the comptroller determine the number of fraudulent claims
under the group health insurance programs administered through ERS for
active and retired state employees.
SECTION 51. Amends Section 609.007, Government Code, by adding Subsection
(d), to provide that a contract created for deferment of compensation need
not be in writing. Authorizes the contract to be communicated to the plan
administrator electronically or by any other means approved by the plan's
trustees.
SECTION 52. Amends Section 609.505, Government Code, by amending
Subsection (a) and adding Subsections (c) and (d), as follows:
(a) Makes a nonsubstantive change.
(c) Provides that a vendor or investment product having an ownership or
other financial interest in the contractor selected by the board to
administer a deferred compensation plan is not qualified to participate in
that plan.
(d) Requires the board to select vendors or investment products based on
the quality of investment performance, proven ability to manage
institutional assets, minimum net worth requirements, fee structure,
compliance with applicable federal and state laws, and other criteria
established by the board. Requires the board to determine the minimum and
maximum number of vendors and investment products that may be offered by a
plan at any particular time.
SECTION 53. Amends Section 609.510, Government Code, to delete a reference
to TexaSaver.
SECTION 54. Amends Section 615.001, Government Code, to decrease the age
of a minor child in the definition of that term from 21 to 18 years.
SECTION 55. Amends Subchapter C, Chapter 2155, Government Code, by adding
Section 2155.146, as follows:
Sec. 2155.146. CERTAIN PURCHASES BY EMPLOYEES RETIREMENT SYSTEM OF TEXAS.
Delegates to ERS all purchasing functions relating to the purchase of goods
or services from funds other than general revenue funds for a purpose ERS
determines relates to the fiduciary duties of ERS. Requires ERS to acquire
goods or services by any procurement method approved by the board that
provides the best value to ERS. Requires ERS to consider certain best
value standards. Requires the General Services Commission (GSC) to procure
goods or services for ERS at the request of ERS. Authorizes ERS to use the
services of GSC in procuring goods or services.
SECTION 56. Amends Section 2171.055(b), Government Code, to provide that
ERS is not required to participate in GSC's contracts for travel agency
services or other travel services purchased from funds other than general
revenue funds.
SECTION 57. Provides that monthly payments of a retirement or death
benefit annuity by ERS under Subtitle B, Title 8, Government Code
(Employees Retirement System of Texas), are increased beginning with the
first payment of the annuities that becomes due on or after the effective
date of this section. Establishes that the increase does not apply to
annuities payable under Section 814.103, Government Code. Sets forth the
computation of the amount of the monthly increase according to a specific
table.
SECTION 58. Requires ERS to make a supplemental payment under Section
814.603(d), Government Code (regarding a supplemental one-time payment), in
the fiscal year beginning with September 1, 2000, if the payment is in
compliance with Section 811.006, Government Code (Action Increasing
Amortization Period).
SECTION 59. Requires ERS to recompute each annuity being paid under JRS on
December 31, 1999, as if the retirement or death on which the annuity is
based occurs on that date. Provides that payments of a recomputed annuity
begin with the first payments that become due after December 31, 1999.
SECTION 60. Provides that the change in law made by this Act to Section
814.1041, Government Code, prevails over any other Act of the 76th
Legislature, Regular Session, 1999, regardless of the relative dates of
enactment, that purports to amend Section 814.1041 or create a similar
provision.
SECTION 61. Requires the Board of Pardons and Paroles and the Texas
Department of Criminal Justice, before October 1, 1999, to certify to ERS
the name of each person employed by that board on September 1, 1999, as a
custodial officer as defined by Section 811.001, Government Code, as
amended by this Act, and such other information that ERS determines is
necessary for the crediting of service and financing of benefits under ERS.
SECTION 62. Repealers: Section 813.405, Government Code, (Contributions
for Service Previously Canceled), and Sections 5(b) (requiring the board to
justify the selection of a carrier whose bid was not the lowest), (c)
(requiring the board to submit the group plan's coverages for competitive
bidding every six years), and (g) (requiring the board to submit specific
information regarding contributions to the State Board of Insurance for
examination and evaluation), Article 3.50-2, V.T.C.S. (Texas Employees
Uniform Group Insurance Benefits Act).
SECTION 63. (a) Provides that Section 814.302(b), Government Code, as
amended by this Act, applies only to deaths of contributing members of ERS
that occur on or after the effective date of this Act, except as provided
by Subsection (b).
(b) Authorizes the surviving spouse of a contributing member of ERS to
apply for and receive a death benefit annuity under Section 814.302(b), as
amended by this Act, if the contributing member died before the effective
date of this Act and if the member's account has not been refunded.
Establishes that the effective date of an annuity under this subsection is
the last day of the month in which the member died. Provides that the
amount of an annuity payable under this subsection will be determined under
the plan terms in effect in the month in which the member died. Requires
ERS to make a lump sum payment of all unpaid annuity payments under this
subsection at the time the first payment of the annuity becomes due on or
after the effective date of this Act. Provides that this subsection
expires December 31, 1999.
SECTION 64. Provides that a person who retires from TCDRS or the Texas
Municipal Retirement System on or after the effective date of this Act but
before September 1, 2002, is not required to meet the requirement of three
years of service for a department whose employees are authorized to
participate in the program provided by the Texas Employees Uniform Group
Insurance Benefits Act to continue participation authorized by Section 3A
of that Act, notwithstanding that section, as amended by this Act.
SECTION 65. Establishes that Section 814.1082, Government Code, as added
by this Act, applies only to retirements that occur on or after January 1,
2000.
SECTION 66. Effective date: September 1, 1999, except that Sections 42,
43, and 57 take effect January 1, 2000.
SECTION 67. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The substitute modifies the original by adding new SECTIONS 1, 3, 6, 9, 10,
11, 14, 24, 27, 28, 30, 32, 38, 39, 53, 55, 56, 58, 59, 60, and 61. For a
more complete analysis of those sections, please see the Section-by-Section
Analysis in this document.
The substitute modifies the original by redesignating the following
sections: SECTION 1 of the original to SECTION 2 of the substitute, 2 to
4, 3 to 5, 4 to 7, 5 to 8, 6 to 12, 7 to 13, 8 to 15, 9 to 16, 10 to 17, 11
to 18, 12 to 19, 13 to 20, 14 to 21, 15 to 22, 16 to 23, 17 to 25, 18 to
26, 19 to 29, 20 to 31, 21 to 34, 22 to 35, 23 to 36, 24 to 37, 25 to 40,
26 to 41, 27 to 42, 28 to 43, 29 to 44, 30 to 45, 31 to 46, 32 to 47, 33 to
48, 34 to 49, 35 to 50, 36 to 51, 37 to 52, 38 to 54, 39 to 57, 40 to 62,
41 to 63, 42 to 64, 43 to 65, 44 to 66, and 45 to 67.
The substitute modifies the original in SECTION 7, as redesignated from
SECTION 4 of the original, by removing an amendment to Section 813.104(b),
Government Code, which would have prohibited payments from being made under
a rule adopted under this section (Alternative Payments to Establish or
Reestablish Service Credit) to establish service credit under Section
813.511.
The substitute modifies the original in SECTION 17, as redesignated from
SECTION 10 of the original, to modify proposed Section 814.1082, Government
Code. The substitute adds a new Subsection (g), which requires ERS to
provide a written notice to a member of the amount by which the member's
annuity will be reduced because of a selection of a partial lump-sum
distribution. Subsection (g), as added, requires the member to be asked to
sign a copy of or receipt for the notice and requires ERS to maintain the
signed copy or receipt. The substitute redesignates Subsection (g) of the
original to Subsection (h) of the substitute.
The substitute modifies the original in SECTION 23, as redesignated from
SECTION 16 of the original, by adding Section 815.208(e), Government Code,
which exempts the Employees Retirement System of Texas (ERS) from
Subchapter K, Chapter 659 (Compensation) and Chapter 660 (Travel Expenses),
Government Code, to the extent the board determines an exemption is
necessary for the performance of fiduciary duties.
The substitute modifies the original in SECTION 29, as redesignated from
SECTION 19 of the original, to further amend Section 815.511, Government
Code, as follows:
Sec. 815.511. New title: ADMINISTRATIVE DECISION; APPEAL AND NEGOTIATION.
The substitute adds Subsection (c), which authorizes ERS and a person
aggrieved by a decision of ERS to informally negotiate an award of
benefits. Subsection (c) prohibits negotiated benefits from exceeding the
maximum benefits otherwise available or required by law. The substitute
adds Subsection (d), which authorizes the executive director to refer an
appeal to the State Office of Administrative Hearings for a hearing or to
employ or contract for the services of an administrative law judge or
hearing examiner not affiliated with that office to conduct the hearing.
The substitute modifies the original in SECTION 36, as redesignated from
SECTION 23 of the original, by further amending Section 4B, Article 3.50-2,
V.T.C.S. The substitute adds Subsections (c-2) and (c-3), which contain
the same authorizations and prohibitions as Sections 815.511(c) and (d),
Government Code.
The substitute modifies the original in SECTION 44, as redesignated from
SECTION 29 of the original, to modify proposed Section 13(e), Article
3.50-2, V.T.C.S. The substitute adds a provision that authorizes the
governing body of an institution of higher education to elect to pay from
local funds part or all of the contributions the state would pay for
similar coverage of other participants in the program.
The substitute modifies the original in SECTION 57, as redesignated from
SECTION 39 of the original, to set forth a different table for use in
computing the amount of an increase in the monthly payments of a retirement
or death benefit annuity by ERS.
The substitute modifies the original in SECTION 62, as redesignated from
SECTION 40 of the original, to also repeal Section 813.405, Government Code
(Contributions for Service Previously Canceled).
The substitute modifies the original in SECTION 66, as redesignated from
SECTION 44 of the original, to make conforming changes with respect to the
redesignation of SECTIONS 27, 28, and 39 of the original to SECTIONS 42,
43, and 57 of the substitute.