By: Huffman	S.B. No. 1663

	A BILL TO BE ENTITLED
	AN ACT
	relating to contributions to, benefits from, late fees imposed by,
	and the administration of systems and programs administered by the
	Teacher Retirement System of Texas.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 822.002, Government Code, is amended to
	read as follows:
	Sec. 822.002.  EXCEPTIONS TO MEMBERSHIP REQUIREMENT.
	(a)  An employee of the public school system is not permitted to be
	a member of the retirement system if the employee:
	(1)  is eligible and elects to participate in the
	optional retirement program under Chapter 830; or
	(2)  [is solely employed by a public institution of
	higher education that as a condition of employment requires the
	employee to be enrolled as a student in the institution; or
	[(3)]  has retired under the retirement system and has
	not been reinstated to membership pursuant to Section 824.005 or
	824.307.
	(b)  An employee of a public institution of higher education
	who is required to be enrolled as a student in the institution as a
	condition of employment is not permitted to be a member of the
	retirement system based on that student employment, and
	compensation paid to the employee for work performed as a student
	employee is not compensation subject to report and deduction for
	member contributions or to credit in benefit computations under
	Section 822.201.
	SECTION 2.  Section 824.1012, Government Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  As an exception to Section 824.101(c), a retiree who
	selected an optional service retirement annuity under Section
	824.204(c)(1), (c)(2), or (c)(5) or an optional disability
	retirement annuity under Section 824.308(c)(1), (c)(2), or (c)(5)
	and who has received at least one payment under the plan selected
	may change the optional annuity selection made by the retiree to a
	standard service or disability retirement annuity as provided for
	in this section.  If the beneficiary of the optional annuity was
	[is] the spouse [or former spouse] of the retiree when the retiree
	designated the spouse as beneficiary of the optional annuity, to
	change from the optional annuity to a standard retirement annuity
	under this subsection, the spouse or former spouse, as applicable,
	who was designated[,] the beneficiary of the optional annuity must
	sign a notarized consent to the change[,] or a court with
	jurisdiction over the marriage of [in a divorce proceeding
	involving] the retiree and beneficiary must approve or order the
	change [in the divorce decree or acceptance of a property
	settlement].  The change in plan selection takes effect when the
	retirement system receives the request to change the plan, provided
	the signed consent form or court order, as applicable, is
	subsequently received by the retirement system [it].
	(a-1)  The executive director or the executive director's
	designee has exclusive authority to determine whether the language
	in a court order described by Subsection (a) is sufficient to
	indicate that the court has approved or ordered the change in plan
	selection. A determination by the executive director or the
	executive director's designee under this subsection may be appealed
	only to the board of trustees, except that the board by rule may
	waive the requirement that an appeal be to the board. An appeal to
	the board is a contested case under Chapter 2001. The standard of
	review of an appeal brought under this subsection is by substantial
	evidence.
	SECTION 3.  Section 824.1013, Government Code, is amended by
	amending Subsections (b) and (c-1) and adding Subsection (c-2) to
	read as follows:
	(b)  If the beneficiary designated at the time of the
	retiree's retirement is the spouse of the retiree at the time of the
	designation:
	(1)  the spouse must give written, notarized consent to
	the change;
	(2)  if the parties divorce after the designation, the
	former spouse who was designated beneficiary must give written,
	notarized consent to the change; or
	(3)  a court with jurisdiction over the marriage must
	approve or order [have ordered] the change.
	(c-1)  Notwithstanding Subsection (c), a beneficiary
	designated under this section is entitled on the retiree's death to
	receive monthly payments of the survivor's portion of the retiree's
	optional retirement annuity for the remainder of the beneficiary's
	life if the beneficiary designated at the time of the retiree's
	retirement is a trust and the beneficiary designated under this
	section is:
	(1)  the sole beneficiary of that trust; or
	(2)  an individual who at the time of the retiree's
	death is the sole beneficiary of that trust.
	(c-2)  The executive director or the executive director's
	designee has exclusive authority to determine whether the language
	in a court order described by Subsection (b) is sufficient to
	indicate that the court has approved or ordered the change in the
	designated beneficiary. A determination by the executive director
	or the executive director's designee under this subsection may be
	appealed only to the board of trustees, except that the board by
	rule may waive the requirement that an appeal be to the board. An
	appeal to the board is a contested case under Chapter 2001. The
	standard of review of an appeal brought under this subsection is by
	substantial evidence.
	SECTION 4.  Section 824.402, Government Code, is amended by
	adding Subsection (a-1) to read as follows:
	(a-1)  In determining under Subsection (a)(4) whether to
	reduce the optional retirement annuity amount because of early
	retirement and in determining the amount of that reduction, if
	applicable, the retirement system shall make the determination as
	if the member had retired with an additional five years of service
	credit on the last day of the month preceding the month in which the
	member dies. The additional five years of service credit used in
	making a determination under this subsection may not be used to
	determine the amount of the benefit under Section 824.203 or
	whether the benefit under this subsection is authorized under
	Section 824.401.
	SECTION 5.  Section 824.503(f), Government Code, is amended
	to read as follows:
	(f)  The designated beneficiary of a disability retiree is
	eligible to receive the benefits described by this section if the
	retiree:
	(1)  retires on or after September 1, 1992; and
	(2)  dies while receiving disability retirement
	benefits under Section 824.304 [824.304(b)].
	SECTION 6.  Section 824.601, Government Code, is amended by
	amending Subsection (b) and adding Subsection (b-2) to read as
	follows:
	(b)  Except as provided by Subsection (b-1) or Section
	824.602 and subject to Subsection (b-2), a retiree is not entitled
	to service or disability retirement benefit payments, as
	applicable, for any month in which the retiree is employed in any
	position by a Texas public educational institution.
	(b-2)  A retiree is considered to be employed by a Texas
	public educational institution for purposes of Subsection (b) if
	the retiree performs duties or provides services for or on behalf of
	the institution that an employee of the institution would otherwise
	perform or provide and:
	(1)  the retiree waives, defers, or forgoes
	compensation from the institution for the performance of the duties
	or provision of the services at any time during the 12 consecutive
	calendar months after the retiree's effective date of retirement,
	notwithstanding any other law, including Sections 824.602(a)(1),
	(a)(2), and (a)(4);
	(2)  the retiree performs the duties or provides the
	services for or on behalf of the institution as an independent
	contractor at any time during the 12 consecutive calendar months
	after the retiree's effective date of retirement; or
	(3)  the retiree, as a volunteer without compensation,
	performs the same duties or provides the same services for an
	institution that the retiree performed or provided immediately
	before retiring and the retiree has an agreement to perform those
	duties or provide those services after the 12 consecutive calendar
	months after the retiree's effective date of retirement.
	SECTION 7.  Section 825.208(b), Government Code, is amended
	to read as follows:
	(b)  The retirement system is exempt from Section 651.002,
	Chapter 660, and Subchapter K, Chapter 659, to the extent the board
	of trustees determines an exemption is necessary for the
	performance of fiduciary duties.
	SECTION 8.  Section 825.212, Government Code, is amended by
	adding Subsection (d) to read as follows:
	(d)  Notwithstanding any other law, all personal financial
	disclosures made by employees of the retirement system under this
	section, including a rule or policy adopted under this section, are
	confidential and excepted from the requirements of Section 552.021.
	SECTION 9.  Section 825.3011(b), Government Code, is amended
	to read as follows:
	(b)  Chapter 551 does not require the board of trustees to
	confer with one or more employees, consultants, or legal counsel of
	the retirement system or with a third party, including
	representatives of an issuer of restricted securities or a private
	investment fund, in an open meeting if the only purpose of the
	conference is to receive information from or question the
	employees, consultants, or legal counsel of the retirement system
	or the third party relating to:
	(1)  [an] investment transactions or [a] potential
	investment transactions if, before conducting the closed meeting, a
	majority of [by] the board of trustees in an open meeting vote that
	deliberating or conferring in an open meeting would have a
	detrimental effect on the position of the retirement system in
	negotiations with third parties or put the retirement system at a
	competitive disadvantage in the market [in a private investment
	fund]; or
	(2)  the purchase, holding, or disposal of restricted
	securities or a private investment fund's investment in restricted
	securities if, under Section 552.143, the information discussed
	would be confidential and excepted from the requirements of Section
	552.021 if the information was included in the records of a
	governmental body.
	SECTION 10.  Section 825.306, Government Code, is amended to
	read as follows:
	Sec. 825.306.  CREDITING SYSTEM ASSETS. (a)  The assets of
	the retirement system shall be maintained and reported in a manner
	that reflects the source of the assets or the purpose for which the
	assets are held, using appropriate ledgers and subledgers, in
	accordance with generally accepted accounting principles
	prescribed by the Governmental Accounting Standards Board or its
	successor. In addition, the maintenance and reporting of the
	assets must be in compliance with applicable tax law and consistent
	with any fiduciary duty owed with respect to the trust.  In the
	alternative, the assets may be credited, according to the purpose
	for which they are held, to one of the following accounts:
	(1)  member savings account;
	(2)  state contribution account;
	(3)  retired reserve account;
	(4)  interest account;
	(5)  expense account; or
	(6)  deferred retirement option account.
	(b)  Notwithstanding any other law, a requirement to deposit
	in or transfer assets from one of the accounts described under
	Subsection (a) is satisfied by maintaining and reporting the assets
	in accordance with that subsection.
	SECTION 11.  Section 825.408, Government Code, is amended by
	amending Subsection (a) and adding Subsections (a-1) and (a-2) to
	read as follows:
	(a)  Except as provided by Subsection (a-1), an [An] employer
	that fails to remit, before the seventh day after the last day of a
	month, all member and employer deposits and documentation of the
	deposits required by this subchapter to be remitted by the employer
	for the month shall pay to the retirement system, in addition to the
	deposits, interest on the unpaid [or undocumented] amounts at an
	annual rate compounded monthly and a late fee in an amount
	determined by the retirement system that is based on the size of the
	employer and may not exceed $1,000 for each business day after the
	deadline imposed by this subsection that the employer fails to
	submit the documentation of the deposits.  The cumulative amount of
	late fees assessed against an employer under this subsection may
	not exceed $25,000 per reporting period.  The rate of interest is
	the rate established under Section 825.313(b)(1), plus two percent.
	Interest and late fees required under this section are [is]
	creditable to the interest account.  On request, the retirement
	system may grant a waiver of the deadline imposed by this subsection
	based on an employer's financial or technological resources.  The
	retirement system may establish a process for filing an appeal to
	reduce or waive a late fee imposed under this subsection.
	(a-1)  This subsection applies only to an employer who
	reports the employment of a retiree to the retirement system.
	Subject to Subsection (a-2), an employer that fails to remit,
	before the 11th day after the last day of a calendar month in which a
	retiree is employed, the employer deposits required by Section
	825.4092(b), documentation of those deposits as required by this
	section, and the certified statement of employment required by
	Section 824.6022 shall pay to the retirement system, in addition to
	the deposits, interest on the unpaid amounts at the annual rate
	established under Subsection (a), compounded monthly, and a late
	fee in an amount determined by the retirement system for each
	business day after the deadline imposed by this subsection that the
	employer fails to file the documentation of the deposits and the
	certified statement of employment.
	(a-2)  If a retiree described by Subsection (a-1) performs
	work in the month of August, the employer must remit the employer
	deposits, documentation of those deposits, and the certified
	statement of employment before the seventh day of September.
	SECTION 12.  Section 825.410(a), Government Code, is amended
	to read as follows:
	(a)  Payments to establish special service credit as
	authorized under this subtitle, other than service credit that may
	only be determined and paid for at the time of retirement such as
	unused leave as authorized by Section 823.403, may be made in a lump
	sum by a monthly payroll deduction in an amount not less than
	one-twelfth of the contribution required to establish at least one
	year of service credit, or in equal monthly installments over a
	period not to exceed the lesser of the number of years of credit to
	be purchased or 60 months.  Installment and payroll deduction
	payments are due on the first day of each calendar month in the
	payment period.  If an installment or payroll deduction payment is
	not made in full within 60 days after the due date, the retirement
	system may refund all installment or payroll deduction payments
	less fees paid on the lump sum due when installment or payroll
	deduction payments began.  Partial payment of an installment or
	payroll deduction payment may be treated as nonpayment.  A check
	returned for insufficient funds or a closed account shall be
	treated as nonpayment.  When two or more consecutive monthly
	payments have a returned check, a refund may be made.  [If the
	retirement system refunds payments pursuant to this subsection, the
	member is not permitted to use the installment method of payment or
	the payroll deduction method, as applicable, for the same service
	for three years after the date of the refund.   A member who requests
	and receives a refund of installment or payroll deduction payments
	also is not permitted to use the same method of payment for the same
	service for three years after the date of the refund.]
	SECTION 13.  Section 825.519, Government Code, is amended to
	read as follows:
	Sec. 825.519.  ELECTRONIC INFORMATION. (a)  The retirement
	system may provide confidential information electronically to
	members or other participants or employers and receive information
	electronically from those persons, including by use of an
	electronic signature or certification in a form acceptable to the
	retirement system.  An unintentional disclosure to, or unauthorized
	access by, a third party related to the transmission or receipt of
	information under this section is not a violation by the retirement
	system of any law, including a rule relating to the protection of
	confidential information.
	(b)  The retirement system may provide to a member or retiree
	any information that is required to be provided, distributed, or
	furnished under Section 802.106(a), (b), (d), or (e) by:
	(1)  sending the information to an e-mail address of
	the member or retiree furnished to the retirement system by an
	employer covered by the retirement system; or
	(2)  directing the member or retiree through a written
	notice or e-mail to an Internet website address to access the
	information.
	(c)  The retirement system may provide to an active member of
	the retirement system the information that is required to be
	provided under Section 802.106(c) by sending the information to an
	e-mail address specified by the member for the purpose of receiving
	confidential information.
	SECTION 14.  Section 1575.402(a), Insurance Code, is amended
	to read as follows:
	(a)  The Retirees Advisory Committee is composed of the
	following seven [nine] members appointed by the trustee:
	(1)  one member who is an active school administrator;
	(2)  one member who is a retired school administrator;
	(3)  two members who are active teachers; and
	(4)  three members who are retired teachers[;
	[(5)     one member who is an active member of the
	auxiliary personnel of a school district; and
	[(6)     one member who is a retired member of the
	auxiliary personnel of a school district].
	SECTION 15.  Section 1575.403(b), Insurance Code, is amended
	to read as follows:
	(b)  The [Five members' terms, including the] terms of the
	active school administrator, one active teacher, and two retired
	teachers[, and the retired member of the auxiliary personnel,]
	expire February 1, 2002, and every fourth year after that date.
	SECTION 16.  Section 824.402, Government Code, as amended by
	this Act, applies only to a member of the Teacher Retirement System
	of Texas who dies on or after the effective date of this Act.
	SECTION 17.  Section 824.601, Government Code, as amended by
	this Act, applies to a retiree of the Teacher Retirement System of
	Texas regardless of whether the person retired from employment
	before, on, or after the effective date of this Act.
	SECTION 18.  The changes in law made by this Act to Sections
	1575.402 and 1575.403, Insurance Code, regarding the composition
	and terms of the Retirees Advisory Committee, do not affect the
	entitlement of a member serving on the committee immediately before
	the effective date of this Act to continue to serve as a member of
	the committee for the remainder of the member's term. As the terms
	of committee members expire or as vacancies occur on the committee,
	the Teacher Retirement System of Texas shall appoint members to the
	committee as necessary to comply with Sections 1575.402 and
	1575.403, Insurance Code, as amended by this Act.
	SECTION 19.  This Act takes effect September 1, 2017, except
	that Section 825.212, Government Code, as amended by this Act,
	takes effect immediately if this Act receives a vote of two-thirds
	of all the members elected to each house, as provided by Section 39,
	Article III, Texas Constitution. If this Act does not receive the
	vote necessary for immediate effect, Section 825.212, Government
	Code, as amended by this Act, takes effect September 1, 2017.