2005 Texas Government Code CHAPTER 865. ADMINISTRATION

GOVERNMENT CODE

CHAPTER 865. ADMINISTRATION


	§ 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)  In appointing the six trustees under Subsection (b), the 
governor shall select from a list of three to five nominees 
submitted by the State Firemen's and Fire Marshals' Association of 
Texas for each vacancy.  The governor may reject a list submitted 
under this subsection and request a new list containing different 
nominees.
	(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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, in an 
emergency, state funds in addition to those required by this 
subtitle and appropriated by the legislature.
	(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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.           


	§ 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, § 1, eff. Sept. 1, 2005.