SEB C.S.S.B. 1129 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1129 By: Armbrister Pensions and Investments 4/26/1999 Engrossed BACKGROUND AND PURPOSE The Texas County and District Retirement System (TCDRS) is a voluntary statewide retirement system that administers retirement, disability, and death benefits for officers and employees of counties and other political subdivisions, excluding cities and school districts. Each participating subdivision is separately funded, with both employers and employees making contributions to TCDRS. S.B. 1129 provides additional options for employer contribution rates and modifies some eligibility requirements to conform with their original legislative intent. This bill creates a single consolidated death benefits section to unify death benefit options. It also consolidates military service credit provisions to conform to changes in federal law. Other changes amend references to repealed law and standardize procedures for vesting and designating beneficiaries. 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 Texas County and District Retirement System in SECTION 19 (Section 843.601, Government Code) and in SECTION 49 (Section 845.116, Government Code) and to the Texas County and District Retirement System in SECTION 24 (Section 844.006, Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 841.001, Government Code, by amending Subdivision (5) and adding Subdivisions (16) and (17) to redefine "compensation" and to define "supplemental death benefit" and "vested member." SECTION 2. Amends Section 842.004, Government Code, by adding Subsection (e) to authorize a subdivision to terminate coverage under and participation in the supplemental death benefits fund if the subdivision gives written notice of its intention to the Texas County and District Retirement System (TCDRS) before November 1 of any year. SECTION 3. Amends Subchapter A, Chapter 842, Government Code, by adding Section 842.008, as follows: Sec. 842.008. NO PARTICIPATION FOR EMPLOYEES HIRED AFTER ELECTION. (a) Prohibits a subdivision from terminating participation in TCDRS as long as it has any liabilities resulting from the participation of current or former employees. Authorizes the subdivision to elect to discontinue enrolling nonmembers in TCDRS whose employment or reemployment begins after the effective date of an election to discontinue enrollment. Provides that a subdivision that has an annually determined contribution rate plan must elect to contribute at a specific rate in all future years in which the allocation described by Subsection (b) is necessary. Establishes that the effective date of the election to discontinue enrollment is January 1 of the year following the election. (b) Requires the assets in a participating subdivision's account to be allocated under the priorities provided by this section, with the details of the allocation to be determined by the actuary of TCDRS and approved by the board of trustees of TCDRS (board), if the subdivision elects to terminate participation in TCDRS. (c) Requires first priority to be given to current service credit of all members who leave their contributions in TCDRS. Provides that the credits will have to be proportionally reduced according to a specific, annually-adjustable cost ratio, if necessary. (d) Requires second priority to be given to prior service credit, multiple matching credit, and supplemental annuities without differentiation. Provides that the annuities and credits may all have to be reduced or increased according to a specific, annually-adjustable cost ratio. (e) Prohibits a subdivision from enrolling new members unless the subdivision applies for and receives approval from the board if the subdivision's assets in TCDRS have been allocated under Subsection (b). Prohibits the board from granting approval unless the subdivision adopts an order or resolution on the terms provided by Subchapter H, Chapter 844 (Annually Determined Contribution Rate Plan). (f) Prohibits annuities and credits under Subsections (c) and (d) from being increased to a level that exceeds the level in effect immediately before Subsection (b) became applicable or the level in effect on December 31, 1992, whichever is greater, if the participating subdivision is not enrolling new members in accordance with Subsection (e). (g) Provides that a subdivision's participation in TCDRS ceases when the subdivision or its successor has no employees who are members of TCDRS and has no present or potential liabilities resulting from the participation of former employees. Requires TCDRS to repay to the subdivision or its successor the amount in the subdivision accumulation fund that is credited to the subdivision. Requires the amount in the subdivision accumulation fund to be transferred to the general revenues account of the endowment fund. (h) Provides that the annuities and credits described by Subsections (c) and (d) made by members before the date a subdivision begins enrolling new members must be restored to the level in effect immediately before Subsection (b) became applicable, unless they already equal or exceed that level, if the subdivision's assets have been allocated under Subsection (b) and the subdivision is allowed to begin enrolling new members. Prohibits the annuities and credits from being increased above a specific level. (i) Authorizes a subdivision, before or after the initial allocation under Subsection (b) is determined, to elect to contribute a lump-sum deposit or to contribute at a specific integer in all future years that the allocation described by Subsection (b) is necessary, notwithstanding the provisions of Section 844.605 (Supplemental Contribution Rate for Certain Subdivisions) or 844.703 (Subdivision Contributions). SECTION 4. Amends Subchapter A, Chapter 842, Government Code, by adding Sections 842.009, as follows: Sec. 842.009. SIGNIFICANT REDUCTION IN NUMBER OF CONTRIBUTING MEMBERS. (a) Requires the assets in a subdivision's account in the subdivision accumulation fund to be allocated under the priorities provided by this section, with the details of the allocation to be determined by the actuary and approved by the board under specific circumstances. Provides that this subsection applies if the subdivision reduces the number of members in its employment by a specific amount within a specific time frame, if no other participating subdivision has assumed funding of the obligations, and if the actuary recommends to the board and the board agrees that this subsection shall apply. (b) Provides that if a subdivision has an annually determined contribution rate plan, the subdivision must elect to contribute at a specific rate in all future years in which the allocation under Subsection (a) is necessary. (c) Makes a conforming change with respect to first priority. (d) Makes a conforming change with respect to second priority. (e) Prohibits the annuities and credits given first and second priority from being increased to a level that exceeds the level in effect immediately before Subsection (a) became applicable if the actuary has not recommended and the board has not approved ending the allocation described by Subsection (a). (f) Provides that the annuities and credits under Subsections (c) and (d) attributable to contributions made by members before the date the allocation was ended must be restored to the level in effect immediately before Subsection (a) became applicable, unless they already equal that level, if the allocation under Subsection (a) has ended by action of the board on the recommendation of the actuary. Prohibits the annuities and credits from being increased above the level in effect immediately before Subsection (a) became applicable until four calendar years have passed after the allocation ended. (g) Authorizes a subdivision, before or after the initial allocation under Subsection (a) is determined, to elect to contribute a lump-sum deposit or to contribute at a specific integer in all future years that the allocation described by Subsection (a) is necessary, notwithstanding the provisions of Section 844.605 or 844.703. SECTION 5. Amends Subchapter A, Chapter 842, Government Code, by adding Section 842.010, as follows: Sec. 842.010. REDUCTION TO NO CONTRIBUTING MEMBERS. (a) Requires the assets in a subdivision's account in the subdivision accumulation fund to be allocated under the priorities provided by this section, with the details of the allocation to be determined by the actuary and approved by the board. Provides that this subsection applies if the subdivision is abolished or reduces the number of members in its employment to zero for at least 12 months so that it no longer contributes to TCDRS and if no other participating subdivision has assumed funding of the obligations. (b) Makes a conforming change with respect to first priority. (c) Makes a conforming change with respect to second priority. (d) Prohibits a subdivision whose assets in TCDRS have been allocated under Subsection (a) from enrolling new members unless the subdivision applies to the board and receives approval. Prohibits the board from granting approval unless the subdivision adopts an order or resolution on the terms provided by Subchapter H, Chapter 844. (e) Prohibits annuities and credits given first and second priority from being increased to a level that exceeds the level in effect immediately before Subsection (a) became applicable if the participating subdivision is not enrolling new members in accordance with Subsection (d). (f) Provides that a subdivision's participation in TCDRS ceases when the subdivision or its successor has no employees who are members of TCDRS and has no present or potential liabilities resulting from the participation of former employees. Requires TCDRS to repay to the subdivision or its successor the amount in the subdivision accumulation fund that is credited to the subdivision. Requires the amount in the subdivision accumulation fund to be transferred to the general revenues account of the endowment fund. (g) Provides that the annuities and credits described by Subsections (c) and (d) made by members before the date a subdivision begins enrolling new members must be restored to the level in effect immediately before Subsection (a) became applicable, unless they already equal or exceed that level, if the subdivision's assets have been allocated under Subsection (a) and the subdivision is allowed to begin enrolling new members. Prohibits the annuities and credits from being increased above a specific level. (h) Authorizes a subdivision to elect to contribute a lump-sum deposit before the initial allocation under Subsection (a) is determined. SECTION 6. Amends Section 842.105, Government Code, to provide that a person has the standing of an employee in a participating subdivision if the person is employed in a position that normally requires services from the person for at least 900 hours a year by a community supervision and corrections department, rather than a judicial district probation department, that has executed a contract with the subdivision. Makes a conforming change. SECTION 7. Amends Section 842.106(a), Government Code, to establish that an employee is not eligible for credit for service performed for a subdivision in another pension fund or retirement system that is at least partly supported at public expense, except as provided by this section (Multiple Retirement System Membership). Specifies that the subdivision bears the responsibility of enforcing this provision. Makes conforming changes. SECTION 8. Amends Section 842.108(a), Government Code, to authorize a person who is not an employee of any participating subdivision to withdraw from membership in TCDRS by written application. Provides that the person's account will be paid the accumulated contributions in the member's individual account plus interest computed for a specific time frame. Makes conforming changes. SECTION 9. Amends Section 842.109, Government Code, to provide that a member is not absent from service and continues to accumulate credited service if the person leaves employment with a participating subdivision to perform qualified military service in the uniformed services as that term is defined in the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) and that meets the requirements of USERRA. Establishes that the person must apply for reemployment within 90 days of being discharged from military service under honorable conditions. Deletes existing text regarding termination of a person's membership in TCDRS by absence from service. Redesignates Subsections (b)(1)(A)-(B) to Subsections (b)(1)-(2). Makes conforming changes. SECTION 10. Amends Section 842.110(f), Government Code, to authorize a person's spouse to elect a survivor annuity death benefit if the person with credited service dies before the payment is made and if there is no surviving beneficiary. Makes a conforming change. SECTION 11. Amends Section 842.111(c), Government Code, to make conforming changes. SECTION 12. Amends Section 842.112, Government Code, by amending Subsection (c) and adding Subsection (i), as follows: (c) Provides that Subsection (i) is an exception to this subsection, which prohibits a correction of a reporting error from being made unless the retirement receives specific items. Makes a nonsubstantive change. (i) Authorizes the correction of an error affecting not more than three consecutive monthly reports to be made on the basis of application alone if the application, supplemental report, and payment required by this section (Correction of Errors) are received by TCDRS within a specific time frame. SECTION 13. Amends Section 842.112, Government Code, by adding Subsections (j) and (k), as follows: (j) Requires TCDRS to grant retroactive service credit on written application of a person receiving judgment against a subdivision ordering that the person be reinstated as an employee of the subdivision retroactively to the date the person's employment was terminated and ordering that the person receive credit toward retirement for the reinstated service. Provides that this subsection applies if the judgment is final and no longer subject to appeal, a certified copy of the judgment accompanies the application, TCDRS receives payment from the person in an amount equal to contributions the person would have made during the period of the person's termination of employment, and TCDRS receives payment from the subdivision in an amount equal to additional contributions the subdivision would have made during that period. (k) Provides that a person is eligible to reestablish service credit under Section 843.003 (Credited Service Previously Forfeited) if the person has forfeited service credit as a result of withdrawal of contributions during the period of the person's termination of employment. Provides that forfeited credit based on service performed for more than one subdivision is considered to have been credit for service performed only for the subdivision that is subject to the judgment. Prohibits credit from being reinstated under this subsection for service performed after the date of the termination of employment that resulted in the judgment. SECTION 14. Amends Section 843.105(d), Government Code, to make a nonsubstantive change. SECTION 15. Amends Section 843.201(d), Government Code, to provide that allocated prior service credits are allowable for a subdivision only if the subdivision has adopted the provisions for an annually determined contribution rate plan or the actuary for TCDRS determines that the subdivision's unfunded actuarial accrued liability amortization period will be less than 25 years if the subdivision has not adopted the provisions of Subchapter H, Chapter 844. Makes conforming changes. SECTION 16. Amends Section 843.203(a), Government Code, to authorize the governing body of a subdivision that assumes the obligations of another subdivision to make a lump-sum deposit to the account of the other subdivision in an amount computed by the actuary on terms that are agreed to in writing by the affected subdivisions and approved by the board. Authorizes an agreement to be amended in writing by the affected subdivisions if the amendment is approved by the board. SECTION 17. Amends Section 843.403(d), Government Code, to make a conforming change. SECTION 18. Amends Section 843.501, Government Code, to delete existing text regarding the computation of an amount of a contribution made for a member establishing credit in TCDRS for legislative service. Prohibits credit for service in the legislature from being established in TCDRS if the service is credited by another retirement system or program established or governed by state law. Makes a conforming change. SECTION 19. Amends Section 843.601, Government Code, as follows: Sec. 843.601. New title: CURRENT SERVICE FOR QUALIFIED MILITARY SERVICE. (a) Defines "qualified military service." (b) Entitles all members to receive credit for qualified military service that is subject to USERRA. Establishes that contributions, benefits, and service credit for qualified military service will be provided in accordance with Section 414(u) of the Internal Revenue Code of 1986 (regarding USERRA), notwithstanding any provision of this subtitle (Texas District and County Retirement System) to the contrary. Authorizes the board to adopt rules that modify the terms of this subtitle for the purpose of compliance with USERRA. (c) Authorizes the governing body of a participating subdivision to authorize the establishment of credit for current service in TCDRS for qualified military service on the terms provided by Section 844.704 (Benefits). Provides that qualified military service includes military service before becoming an employee of the subdivision. Sets forth the eligibility requirements for establishing credit for qualified military service. Authorizes an eligible member to establish credit by filing an application for the credit with TCDRS. (d) Provides that a subdivision whose governing body authorized "current service for military duty" before December 31, 1999, has authorized credit for current service under Subsection (c). (e) Establishes that the maximum amount of credited service that a person may receive under this section is five years, except for service credit established with TCDRS before December 31, 1999. Requires service credit under Subsection (b) to be canceled to the extent necessary to reduce the total to five years of credit if a person would receive more that five years of service credit as a result of having received credit under Subsection (c) before receiving credit under Subsection (b). Deletes existing text regarding the establishment of military service credit. (f) Makes a nonsubstantive change. SECTION 20. Amends Section 843.701, Government Code, to prohibit the governing body of a participating subdivision from increasing the percentage of maximum prior service credits used in determining the allocated prior service credits except on the terms provided by Subchapter H, Chapter 844. Makes conforming changes. SECTION 21. Amends Section 843.703, Government Code, to prohibit the governing body of a participating subdivision from increasing the percentage used in determining multiple matching credits except on the terms provided by Subchapter H, Chapter 844. Deletes existing text regarding the computation of a percentage increase. Makes conforming changes. SECTION 22. Amends Section 844.002(c), Government Code, to provide that a supplemental annuity is an amount payable from the subdivision accumulation fund, subject to reduction under Section 842.008(d), 842.009(d), 842.010(c), or 845.307(c) (regarding the charging of a subdivision's account for the reinstatement of forfeited credit). SECTION 23. Amends Section 844.003, Government Code, by amending Subsections (b) and (c) and adding Subsection (e), as follows: (b) Provides that a member is considered to have retired on the last day of the month before the month in which the member dies if the member is eligible under Section 844.407 to select an optional retirement annuity and dies before retirement. (c) Provides that the effective date of a member's disability retirement must be the last day of a calendar month. (e) Prohibits the effective retirement date of a member from preceding the first anniversary of the effective date of the person's membership in TCDRS or the effective date of participation of the subdivision from which the member had most recently earned credited service, whichever is earlier, notwithstanding Subsections (a) (regarding the revocation of a designation of a beneficiary), (b), and (c). SECTION 24. Amends Section 844.006, Government Code, by amending Subsection (c) and adding Subsection (f), as follows: (c) Authorizes a retiree who selected an optional retirement annuity under specific subsections of 844.104 (Optional Service Retirement Annuity) or 844.305 (Optional Disability Retirement Annuity) to revoke the designation of the beneficiary if a court in a divorce proceeding involving the retiree and beneficiary awards to the retiree the entire retirement benefit earned by the retiree. Authorizes the order to be set forth in the divorce decree or in an order approving the terms of a property settlement agreement incident to the divorce of the retiree and beneficiary, but requires it to be dated on or after December 31, 1999. Provides that the revocation takes effect when TCDRS receives it and cancels the optional annuity selection made by the retiree. Entitles the retiree to receive a standard service or disability retirement annuity, as applicable, in the same amount that the retiree would receive for the same month of the retiree had originally retired with a standard service or disability retirement annuity beginning within a specific time frame. Deletes existing text regarding the designation of a beneficiary. (f) Authorizes TCDRS, by rule, to establish requirements for forms, documentation, and procedures necessary or desirable for the administration of this section (Change of Beneficiary or Division of Benefit for Certain Persons Receiving Monthly Benefits). SECTION 25. Amends Sections 844.007(a) and (b), Government Code, as follows: (a) Deletes existing text that provides an exception to this subsection regarding adjustments made in the computation of benefits. Makes a conforming change. (b) Deletes existing text regarding interest credit. Makes a conforming change. SECTION 26. Amends Section 844.101, Government Code, to authorize a member to apply for a service retirement annuity by filing an application for retirement with the board on or before the member's effective retirement date designated on the application. Makes a conforming change. SECTION 27. Amends Section 844.102, Government Code, to provide that a member is eligible to apply for and receive a service retirement annuity if the member has met the eligibility requirements for service retirement under Section 844.207 (Optional Benefit Eligibility Plan), 844.210 (Optional Benefit Eligibility Plan Two), or 844.211 (Optional Benefit Eligibility Plan Three). Deletes existing text regarding the date on which a member becomes eligible to retire. Makes conforming changes. SECTION 28. Amends Section 844.104(j), Government Code, to provide that a retiree who dies before the 31st day after the effective date of service retirement and who did not select an optional service retirement annuity before death is considered to have selected an optional annuity under Subsection (c)(7) (making 180 monthly payments payable to the beneficiary), rather than (c)(4) (making 120 monthly payments payable to the beneficiary). SECTION 29. Amends Section 844.202, Government Code, as follows: Sec. 844.202. New title: VESTED ELIGIBILITY TO FUTURE RETIREMENT. Authorizes a vested member of TCDRS to terminate employment with all participating subdivisions and remain eligible to retire and receive a service retirement annuity at any time after the member attains age 60 if the member leaves the member's accumulated contributions on deposit with TCDRS and has at least 10 years of service credited under the Optional Benefit Eligibility Plan or has at least 8 years of service credited under the Optional Benefit Eligibility Plan Two. Provides that a member of TCDRS is a vested member. Makes conforming changes. SECTION 30. Amends Section 844.207, Government Code, to provide that the term "Section 844.207 credited service" means credited service performed for one or more participating subdivisions that have adopted the plan provisions of this section (Optional Benefit Eligibility) or Section 844.210 (Optional Benefit Eligibility Plan Two). Provides that a member is eligible to apply for and receive a service retirement annuity if the member is less than 60 years old and has sufficient years of Section 844.207 credited service in TCDRS if the member's age plus number of years of service equal or exceed the number 80. Provides that a member who has at least 10 years of Section 844.207 credited service is a vested member for purposes of a disability retirement annuity. Provides that a member is eligible to receive a service retirement benefit under the same computation if the member has any Section 844.207 credited service on December 31, 1999, and continues membership in TCDRS after that date without interruption and if the member accumulates four years or more of Section 844.207 credited service. Makes conforming and nonsubstantive changes. SECTION 31. Amends Section 844.209, Government Code, as follows: Sec. 844.209. ALTERNATIVE OPTIONAL INCREASE IN RETIREMENT ANNUITIES. (a) Authorizes the governing body to provide for increased annuities to be paid to retirees and beneficiaries of deceased retirees of the subdivision from time to time, but not more often than once per year. Prohibits the governing body from electing an increase in retirement annuities and under this section in the same 12-month period. (b) Provides that an increase applies to all annuities for which the effective retirement date is at least 12 months before the effective date of the increase. (c) Sets forth the computation for the amount of the annuity increase. (d) Establishes the effective date of an order or resolution under this section. (e) Provides that an increase in annuity that was reduced because of an option selection is reducible in the same proportion and in the same manner that the original annuity was reduced. (f) Establishes that the amount of an increase is payable as a supplemental annuity, is an obligation of the subdivision's account in the subdivision accumulation fund, and is subject to reduction under Section 845.307(c) (authorizing a reduction to prevent payments from exceeding the amount available in the subdivision's account). (g) Prohibits the governing body of a subdivision from adopting an order or resolution under this section except on the terms provided by Subchapter H. Deletes existing text regarding an annuity payable to a beneficiary. SECTION 32. Amends Section 844.210, Government Code, to make conforming changes. SECTION 33. Amends Section 844.211, Government Code, to make conforming changes. SECTION 34. Amends Section 844.301(b), Government Code, to make conforming changes. SECTION 35. Amends Section 844.302, Government Code, to provide that a member who is or is not a vested member under Section 844.202 is eligible to apply for and receive a disability retirement annuity if the member is the subject of a certification issued as provided by Section 844.303(b)(1) or (b)(2) (regarding the certification by the medical board of a vested or non-vested member with a disability), with an exception. Establishes that a member is not eligible to retire for disability before the first anniversary of the effective date of the person's membership or the effective date of participation of the subdivision from which the member had most recently earned credited service, whichever is earlier. SECTION 36. Amends Section 844.303(b), Government Code, to require the medical board to issue a certification of disability and submit it to the board for either a vested or a non-vested member under specific circumstances surrounding the disability. Makes conforming changes. SECTION 37. Amends Section 844.305(h), Government Code, to make a conforming change. SECTION 38. Amends Subchapter E, Chapter 844, Government Code, by adding Section 844.407, as follows: Sec. 844.407. SURVIVOR ANNUITY DEATH BENEFIT. (a) Defines "eligible member." (b) Authorizes an annuity under this section to be selected and paid on the death of an eligible member before the effective date of the member's retirement instead of any other benefit allowed under this subtitle, except that a supplemental death benefit may also be paid. (c) Authorizes an eligible member to file a selection of an optional service retirement annuity and a designation of a beneficiary on a specific form before the effective date of the member's retirement. (d) Authorizes a member to elect to name a beneficiary who will be allowed, on the death of the member before retirement, to choose any benefit that the member could have chosen to be paid to the beneficiary instead of selecting an optional service retirement annuity. (e) Requires an unrevoked application for deferred service retirement to be considered a selection of benefit and a designation of beneficiary under Subsection (c) if the application is executed and filed with TCDRS before December 31, 1999. Requires an unrevoked form that names a beneficiary to be considered a selection of a beneficiary under Subsection (d) if no application is on file on that date. (f) Authorizes a member to change a selection of an optional annuity or a designation of beneficiary at any time before the member's retirement or death in the same manner that the original selection or designation was made. (g) Provides that a member's surviving spouse is considered to be the member's beneficiary if the member dies before retirement without designating a beneficiary. Authorizes the surviving spouse to select an optional annuity in the same manner as if the member had made the selection. (h) Authorizes the executor or administrator of the member's estate, if no surviving spouse exists, to elect for an estate beneficiary to receive the optional annuity or for the estate to receive a refund of the member's accumulated contributions. (i) Requires any annuity payable under this section to be computed on the assumption that the member had actually retired under the annuity selected and with the same beneficiary determined under the applicable provision of this section, effective on the last day of the calendar month before the month in which the member died. (j) Requires a survivor annuity to be paid from the same accounts and to be subject to the same conditions as are applicable to a service retirement benefit for the same member. SECTION 39. Amends Subchapter E, Chapter 844, Government Code, by adding Section 844.408, as follows: Sec. 844.408. NO SURVIVING SPOUSE, EXECUTOR, OR ADMINISTRATOR. (a) Defines "heirs." (b) Sets forth the circumstances under which the heirs of a deceased member may make an election of payment for the survivor annuity death benefit. Includes as one of those circumstances the filing of a small estates affidavit or a certified copy that has been approved and filed in accordance with Section 137, Texas Probate Code (Collection of Small Estates Upon Affidavit). (c) Authorizes TCDRS to accept an affidavit other than a small estates affidavit if it is sworn to by two disinterested witnesses, by those heirs who have legal capacity, and, if the facts warrant, by the natural guardian or next of kin of any minor or incompetent who is also an heir. Provides that this subsection applies if no small estates affidavit has been filed with the clerk of the court having jurisdiction and venue. Provides that the affidavit must include specific information regarding the witnesses, heirs, and estate. (d) Authorizes the heirs to make the election if each heir agrees to it and if TCDRS, acting through the director or a person designated by the director, approves the affidavit. SECTION 40. Amends Sections 844.502(a), (b), (c), and (d), Government Code, as follows: (a) Provides that a member included in the coverage of the supplemental death benefit program who fails to earn compensation in a month for service to a subdivision participating in the supplemental death benefits fund may be, rather than is, eligible to receive extended supplemental death benefit coverage. Makes a conforming change. (b) Establishes that a member who dies within 24 months after the date the member last made a required contribution to TCDRS is considered to have received extended program coverage if TCDRS receives certain specified items after the member's death. Makes conforming and nonsubstantive changes. (c) Provides the circumstances under which a member who had applied for and received extended program coverage before September 1, 1999, remains covered by the supplemental death benefit program. SECTION 41. Amends Section 844.505, Government Code, to provide that if a beneficiary entitled to receive a supplemental death benefit does not survive the member or retiree covered by the supplemental death benefit program, the benefit is payable to the person to whom a benefit under Subchapter B (Service Retirement Benefits) or Subchapter D (Disability Retirement Benefits) is payable, or if no benefit is payable under those subchapters, to the person to whom a benefit under Subchapter E (Death Benefits) is or would be payable. Makes conforming changes. SECTION 42. Amends Sections 844.605(b) and (c), Government Code, to authorize a supplemental contribution rate to exceed the rate determined by the actuary, rather than to prohibit it from exceeding four percent of the payroll. Makes a nonsubstantive change. SECTION 43. Amends Section 844.606, Government Code, by adding Subsection (f), as follows: (f) Provides that the lower percentage to be used in determining multiple matching credits must be a multiple of 10 percent of the amount of member contributions. SECTION 44. Amends Section 844.608(a), Government Code, to make a nonsubstantive change. SECTION 45. Amends Section 844.702, Government Code, to authorize the governing body of a subdivision to increase or decrease the contribution rate to take effect within a specific time frame of the adoption of the increase or decrease. Authorizes a member's contribution rate to be reduced to a specific amount if necessary under Section 844.703(h) (regarding a subdivision's normal contributions and prior service contributions exceeding a maximum rate). Makes conforming changes. SECTION 46. Amends Sections 844.703(c), (d), (g), and (h), as follows: (c) Prohibits the combined rates of a subdivision's normal contributions and prior service from exceeding 11 percent unless the governing body of a subdivision elects to waive that limitation. Sets forth the effective period of a waiver. (d) Makes conforming changes. (g) Makes a conforming change. (h) Makes a conforming change. SECTION 47. Amends Sections 844.704(c), (d), and (e), Government Code, to authorize the governing body of a subdivision that has adopted or is adopting the annually determined contribution rate plan to adopt an optional authorization of the establishment of premembership credited service for overage employees. Deletes existing text regarding an election to have credits recomputed on the basis of total compensation. Makes conforming changes. SECTION 48. Amends Section 845.105, Government Code, to delete existing text regarding negotiable promissory notes or negotiable bonds of TCDRS for the board. SECTION 49. Amends Subchapter B, Chapter 845, Government Code, by adding Section 845.116, as follows: Sec. 845.116. ELECTRONIC TRANSFER OF FUNDS AND ELECTRONIC FILING OF DOCUMENTS. Defines "electronic filing" and "electronic transfer." Authorizes the board to adopt rules and procedures relating to the electronic transfer of funds and the electronic filing of documents and required reports. Provides that funds that are electronically transferred in accordance with those rules and procedures are considered to have been timely received by TCDRS. Establishes that documents and required reports that are electronically filed in accordance with those rules and procedures are considered to have been properly filed with TCDRS. SECTION 50. Amends Section 845.306, Government Code, to delete existing text which prohibits TCDRS from paying interest on a person's account for part of a year or after the person's membership has been terminated because of absence from service. Redesignates Subsections (a)(5), (6), and (8) to (a)(4), (5), and (6), respectively. Makes conforming changes. SECTION 51. Amends Section 845.307(a), Government Code, to redesignate Subdivision (8) to (6). Makes conforming changes. SECTION 52. Amends Section 845.310(f), Government Code, to make a conforming change. SECTION 53. Amends Section 845.312, Government Code, to delete existing text regarding a supplemental death benefits fund. SECTION 54. Amends Section 845.315(b), to make a nonsubstantive change. SECTION 55. Amends the heading of Subchapter E, Chapter 845, Government Code, as follows: New title: SUBCHAPTER E. COLLECTION OF CONTRIBUTIONS SECTION 56. Amends Section 845.403(j), Government Code, to delete existing text regarding the inclusion of employees' picked-up contributions and whether the contributions are considered gross income. Makes conforming changes. SECTION 57. Amends Section 845.404(a), Government Code, to require each participating subdivision to pay to TCDRS the member contributions or picked-up member contributions and the subdivision's contributions within a specific time frame. Makes a conforming change. SECTION 58. Amends Section 845.406, Government Code, to authorize the board to lend money to the supplemental death benefits fund if the amount in the fund is insufficient to pay the supplemental death benefits due. Provides that any loan is an investment of TCDRS and must be repaid solely from future contributions to the supplemental death benefits contributions and its share of trust earnings. Requires the terms of the loan to be set by the board, and provides that the loan must bear a commercially-reasonable interest rate. Authorizes the board to adjust future contributions to the supplemental death benefits fund for purposes of repayment of the loan. Deletes existing text regarding the transfer of funds from the general revenues account to the supplemental death benefits fund ands regarding the termination of the supplemental death benefits fund. Makes a nonsubstantive change. SECTION 59. Amends Subchapter E, Chapter 845, Government Code, by adding Section 845.407, as follows: Sec. 845.407. PENALTY FOR LATE CONTRIBUTIONS. Requires a participating subdivision to pay a penalty if it fails to provide the information required by Section 845.403 (Collection of Member Contributions) or to pay all contributions required to be made and remitted to TCDRS before the 16th day of the month in which they are due. Sets forth the amount of the penalty. Requires TCDRS to deduct the penalty from the subdivision's account if the penalty is not paid within three months after the date of notice of the penalty. Requires the interest portion of the penalty to be deposited in the distributable income account and the administrative portion of the penalty to be deposited in the expense fund. Provides that payment and required reports are considered to be made when received by TCDRS. SECTION 60. Amends Subchapter E, Chapter 845, Government Code, by adding Section 845.408, as follows: Sec. 845.408. ADDITIONAL OPTIONAL DEPOSITS BY SUBDIVISIONS. Authorizes the governing body of a participating subdivision to elect to deposit one or more lump-sum payments in the subdivision accumulation fund in addition to the deposits that the subdivision is required to make. Establishes that once a payment is deposited, it cannot be withdrawn from that fund by the subdivision. SECTION 61. Amends Section 845.505(e), Government Code, to require TCDRS to restore a member's individual account in the employee's saving fund if a person files a valid application for retirement based on an account that has been closed under Subsection (a) (regarding a valid application for annuity or for a refund of contributions) or (c) (regarding a valid application for retirement or for a refund of contributions), rather than (a), (b) (regarding a termination of membership due to absence from service), or (c). SECTION 62. Authorizes a participating subdivision to elect not to have Section 844.407(a)(1), Government Code, apply to the subdivision by filing a notice of that election with TCDRS before December 31, 1999, if the subdivision is not subject to Subchapter H, Chapter 844, Government Code, notwithstanding Section 844.407, as added by this Act. Authorizes a subdivision that makes that election to subsequently elect to have Section 844.407(a)(1), Government Code, as added by this Act, apply to the subdivision. Section 844.407(a)(1) includes in the definition of "eligible member" a member who has four or more years of credited service with one or more subdivisions that on September 1, 1999, are participating in TCDRS or that began participation after that date. SECTION 63. (1) Repealers: Section 842.005, Government Code (Termination of Subdivision Participation), Section 843.202, Government Code (Prior Military Service), Section 843.404, Government Code (Reestablishment of Certain Service), Section 843.603, Government Code (Current Service for Reemployed Veterans), Section 843.702, Government Code (Recomputation of Service Credits), Sections 844.007(d), (e), (f), and (g), Government Code (regarding adjustments applicable to midyear retirements), Section 844.105, Government Code (Selection of Optional Service Retirement Annuity), Section 844.106, Government Code (Selection of Optional Service Retirement Annuity by Certain Members), Section 844.107, Government Code (Annual Deferred Retirement Benefit Selection), Section 844.108, Government Code (No Surviving Spouse, Executor, or Administrator), Section 844.201, Government Code (Conditions for Optional Benefits), Section 844.203, Government Code (Optional Selection of Optional Annuity by Certain Members), Section 844.204, Government Code (Optional Selection of Optional Annuity by Certain Other Members), Section 844.205, Government Code (Optional Increase in Annuities for Current Service), Section 844.206, Government Code (Optional Increase in Annuities for Prior Service), Sections 844.502(e) and (f), Government Code (regarding extended supplemental death benefit coverage). SECTION 64. Effective date: December 31, 1999, except that Sections 13, 16, 62, and this section take effect September 1, 1999. SECTION 65. Emergency clause.