CHAPTER 865. ADMINISTRATION - Texas Statutes

GOVERNMENT CODE

TITLE 8. PUBLIC RETIREMENT SYSTEMS

SUBTITLE H. TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM

CHAPTER 865. ADMINISTRATION

Sec. 865.001. COMPOSITION OF STATE BOARD. (a) The state board

of the pension system is composed of nine members appointed by

the governor for staggered terms of six years, with the terms of

three trustees expiring on September 1 of each odd-numbered year.

(b) Six trustees must be active members of the pension system,

one of whom must represent emergency medical services personnel.

(c) Repealed by Acts 2009, 81st Leg., R.S., Ch. 697, Sec. 9,

eff. September 1, 2009.

(d) Three trustees must be persons who have experience in the

fields of finance, securities investment, or pension

administration.

(e) Appointments to the state board shall be made without regard

to the race, color, disability, sex, religion, age, or national

origin of the appointee.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

697, Sec. 9, eff. September 1, 2009.

Sec. 865.002. INELIGIBILITY OF CERTAIN EMPLOYEES FOR STATE

BOARD. (a) A person is not eligible for appointment to the

state board if the person or the person's spouse is employed by

or participates in the management of a business entity or other

organization regulated by or receiving funds from the state board

or the fund.

(b) A person may not serve as a trustee of the state board or

act as the general counsel to the state board if the person is

required to register as a lobbyist under Chapter 305 because of

the person's activities for compensation on behalf of a business

or an association related to the operation of the state board.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.003. COMPENSATION; EXPENSES. Trustees of the state

board serve without compensation but may be reimbursed for actual

and necessary expenses incurred in performing state board

functions.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.004. VOTING. (a) Each trustee of the state board is

entitled to one vote. Except as provided by Subsection (b), at

any meeting of the state board, a vote by a majority of the

trustees present is necessary for a decision by the trustees.

(b) The concurrence of a majority of the members of the state

board is required for a vote regarding:

(1) eligibility for service retirement described by Section

864.001;

(2) the computation of a service retirement annuity described by

Section 864.002;

(3) a cost-of-living increase described by Section 864.013; or

(4) a lump-sum payment adopted under Section 864.014.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.005. GROUNDS FOR REMOVAL OF TRUSTEES. (a) It is a

ground for removal from the state board that a trustee:

(1) does not have at the time of appointment the qualifications

required by Section 865.001;

(2) does not maintain during service on the state board the

qualifications required by Section 865.001;

(3) violates a prohibition established by Section 865.002;

(4) cannot discharge the person's duties for a substantial part

of the term for which the person is appointed because of illness

or disability; or

(5) is absent from more than half of the regularly scheduled

state board meetings that the trustee is eligible to attend

during a calendar year unless the absence is excused by a

majority vote of the state board.

(b) The validity of an action of the state board is not affected

by the fact that it is taken when a ground for removal of a

trustee exists.

(c) If the commissioner has knowledge that a potential ground

for removal exists, the commissioner shall notify the presiding

officer of the state board of the ground. The presiding officer

shall then notify the governor that a potential ground for

removal exists.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.006. GENERAL DUTIES OF STATE BOARD. (a) The state

board shall employ a certified public accountant, an actuary, and

an investment consultant for the fund and may acquire computer,

custodial, or investment management services for the fund. The

costs of accounting, actuarial, investment consulting, computer,

custodial, or investment management services and other

administrative expenses may be paid from income earned by

investment of the fund. No portion of the corpus or income of

the fund may be used for purposes other than the benefit of

members, retired emergency services personnel, and their

beneficiaries.

(b) The state board shall adopt rules necessary for the

administration of the fund. The state board shall adopt rules to

provide a proration of the requirements for qualified service for

a member who performs service for only a portion of a calendar

year and may provide by rule for the manner in which member

attendance or training hours are to be computed.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.007. ADMINISTERING SYSTEM ASSETS. (a) The state board

shall administer all assets of the pension system. The state

board is the trustee of the pension system's assets.

(b) The state board may acquire, hold, manage, purchase, sell,

assign, trade, transfer, and dispose of any security, evidence of

debt, or other investment in which the pension system's assets

may be invested.

(c) The state board or the commissioner may accept on behalf of

the pension system gifts of money or other property from any

public or private source.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.008. INVESTMENT OF ASSETS. (a) If a surplus exists in

the fund over the amount necessary to pay benefits due for a

reasonable period of time, the state board shall invest the

surplus.

(b) The assets of the pension system shall be invested and

reinvested in accordance with Section 67, Article XVI, Texas

Constitution. A determination of whether the state board has

exercised prudence with respect to an investment decision must be

made, taking into consideration the investment of all assets of

the trust over which the state board has management and control

rather than considering the prudence of a single investment.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.009. TRUST FUND. The Texas emergency services

retirement fund is a trust fund established with the comptroller.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.010. COMMISSIONER'S DUTIES. (a) The commissioner

shall oversee the distribution of all benefits.

(b) The commissioner shall collect the revenues for the fund

from the governing bodies of participating departments.

(c) The commissioner may request and administer state funds

appropriated by the legislature in addition to those required by

this subtitle.

(d) The commissioner is responsible for recovering any

fraudulently acquired benefits. If it appears that fraud has

occurred, the commissioner shall notify the appropriate local

board and the claimant and hold a hearing. If after the hearing

the commissioner determines that benefits have been or are being

fraudulently acquired, the commissioner shall seek action in a

court.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

321, Sec. 9, eff. September 1, 2007.

Sec. 865.011. RECORDS AND REPORTS. (a) The commissioner may at

any reasonable time examine the records and accounts of local

boards.

(b) The commissioner shall require in a timely manner periodic

reports from the local boards and shall prepare necessary forms

for use by local boards.

(c) The commissioner shall prepare an annual report on the

activity and status of the fund and submit the report to the

governor, the lieutenant governor, and the speaker of the house

of representatives.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.012. LOCAL BOARD. (a) A local board is composed of:

(1) one trustee selected by the governing body of the political

subdivision of which a participating department is a part;

(2) three trustees who are active members representing a

participating department chosen by a majority of the emergency

services personnel in the department who are eligible to

participate in the pension system; and

(3) two trustees who are representatives of the political

subdivision who are chosen by the other members of the local

board.

(b) Trustees of a local board serve staggered two-year terms.

At the first meeting of a local board, the trustees shall draw

lots to determine the length of the term to be served, with the

terms of two trustees to be two years and the terms of two

trustees to be one year. The first appointments of trustees

appointed by other members of the local board are to be one

trustee for a two-year term and one trustee for a one-year term.

(c) A local board shall hold not fewer than four meetings a year

under Chapter 551.

(d) A vacancy on a local board is filled for the remainder of

the unexpired term by the procedure by which the position was

originally filled.

(e) A local board shall elect a presiding officer from the

trustees at its first meeting.

(f) At any meeting of a local board, a vote by a majority of the

trustees present is necessary for a decision by the trustees.

(g) A trustee of a local board may not receive compensation for

service as a trustee but may be reimbursed by the governing body

of a participating department for actual and necessary expenses

incurred in performing local board functions.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.013. MONITORING OF CONTRIBUTION SUBMISSION. A local

board shall monitor the timely submission of required

contributions to the commissioner.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.014. LOCAL CONTRIBUTIONS. (a) Each governing body of

a political subdivision of which a participating department is a

part shall contribute for each member for each month of service

beginning on the date that the member enters the pension system

at a rate determined in accordance with Subsection (b) and may

make additional contributions as determined by the political

subdivision. If the participating department is located in more

than one political subdivision, the governing bodies of the

political subdivisions shall contribute equally for each member

for each month of service.

(b) The state board by rule shall determine the minimum, and may

determine a maximum, contribution for each member of a

participating department for each month of qualified service at a

rate the state board determines necessary, after consultation

with the actuary, to make the pension system actuarially sound.

(c) Contributions required as provided by this section shall be

paid at the times and in the manner that the state board

prescribes by rule. Contributions required by this section shall

be submitted by electronic funds transfer unless the commissioner

grants an exception based on the difficulty of a participating

department's use of that payment method. Contributions that are

not paid within the time required by the state board accrue

interest at the most recent assumed actuarial rate of return on

investments of the fund.

(d) The state board may by rule require a monthly contribution

from political subdivisions that do not participate in the

pension system but whose employees or former employees are

members or retirees of the pension system in an amount necessary

to pay the expenses of administering benefits for those persons.

(e) The attorney general may file suit to collect unpaid accrued

interest. Interest recovered shall be deposited in the fund.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.015. STATE CONTRIBUTIONS. The state shall contribute

the amount necessary to make the pension system actuarially sound

each year, except that the state's contribution may not exceed

one-third of the total of all contributions by governing bodies

in a particular year.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.016. ADMINISTRATIVE PENALTY. (a) The state board may

impose an administrative penalty on a local board that fails to

file a required report in a timely manner.

(b) The amount of the penalty may not exceed $5,000. The amount

shall be based on:

(1) the seriousness of the violation, including the nature,

circumstances, extent, and gravity of the violation;

(2) the history of previous violations;

(3) the amount necessary to deter a future violation;

(4) efforts to correct the violation; and

(5) any other matter that justice may require.

(c) The state board may adopt rules for determining the amount

of a penalty.

(d) The enforcement of the penalty may be stayed during the time

the order is under judicial review if the person pays the penalty

to the clerk of the court or files a supersedeas bond with the

court in the amount of the penalty. A person who cannot afford

to pay the penalty or file the bond may stay the enforcement by

filing an affidavit in the manner required by the Texas Rules of

Civil Procedure for a party who cannot afford to file security

for costs, subject to the right of the state board to contest the

affidavit as provided by those rules.

(e) The attorney general may file suit to collect the penalty.

Penalties recovered will be deposited in the fund.

(f) A proceeding to impose the penalty is considered to be a

contested case under Chapter 2001.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.017. INTERRUPTION OF PAYMENTS. (a) The pension system

shall withhold payment of a monthly retirement annuity if a

participating department attempts to provide information to the

commissioner relating to continued eligibility to receive the

payments and the recipient fails to cooperate or provide the

requested information. The state board may adopt rules to

enforce this subsection.

(b) The pension system may not begin service or disability

retirement annuity or death benefit payments based on the service

of a person whose local board is not current in its filing of a

required periodic report.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.018. CERTIFICATION OF FUND. (a) In this section,

"qualified actuary" means a fellow of the Society of Actuaries or

a member of the American Academy of Actuaries who has at least

five years of experience with public retirement systems.

(b) The commissioner and the state board shall certify the

actuarial and financial soundness of the fund every two years

with the assistance of a qualified actuary.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.019. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS,

ANNUITANTS, AND BENEFICIARIES. (a) Information contained in

records that are in the custody of the pension system concerning

an individual member, annuitant, or beneficiary is confidential

under Section 552.101 and may not be disclosed in a form

identifiable with a specific individual unless:

(1) the information is disclosed to:

(A) the individual or the individual's attorney, guardian,

executor, administrator, conservator, or other person who the

commissioner determines is acting in the interest of the

individual or the individual's estate;

(B) a spouse or former spouse of the individual after the

commissioner determines that the information is relevant to the

spouse's or former spouse's interest in member accounts,

benefits, or other amounts payable by the pension system;

(C) a governmental official or employee after the commissioner

determines that disclosure of the information requested is

reasonably necessary to the performance of the duties of the

official or employee; or

(D) a person authorized by the individual in writing to receive

the information; or

(2) the information is disclosed under a subpoena and the

commissioner determines that the individual will have a

reasonable opportunity to contest the subpoena.

(b) This section does not prevent the disclosure of the status

or identity of an individual as a member, former member, retiree,

deceased member or retiree, or beneficiary of the pension system.

(c) The commissioner may designate other employees of the

pension system to make the necessary determinations under

Subsection (a).

(d) A determination and disclosure under Subsection (a) may be

made without notice to the individual member, annuitant, or

beneficiary.

Added by Acts 2005, 79th Leg., Ch.

803, Sec. 1, eff. September 1, 2005.

Sec. 865.020. MEDICAL BOARD. (a) The state board shall

designate a medical board composed of three physicians.

(b) To be eligible to serve as a member of the medical board, a

physician must be licensed to practice medicine in the state and

be of good standing in the medical profession. A physician who

is eligible to participate in the pension system may not be a

member of the medical board.

(c) The medical board shall:

(1) investigate essential statements and certificates made by or

on behalf of a member of the pension system in connection with an

application for disability retirement or, as requested by the

commissioner, with an application for an on-duty death benefit;

and

(2) report in writing to the commissioner its conclusions and

recommendations on all matters referred to it.

(d) The medical board is not subject to subpoena regarding

findings it makes in assisting the commissioner under this

section, and its members may not be held liable for any opinions,

conclusions, or recommendations made under this section.

Added by Acts 2009, 81st Leg., R.S., Ch.

697, Sec. 8, eff. September 1, 2009.