HBA-TBM C.S.H.B. 3407 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3407 By: King, Tracy Pensions & Investments 4/16/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, a public school employee who is a member of the Teacher Retirement System of Texas (TRS) is allowed to establish service credit in TRS for military service, out-of-state service, developmental leave, service previously waived, and work experience in a career or technological field. Teachers are not authorized to establish service credit that is required by a court order due to wrongful termination by a school district. C.S.H.B. 3407 authorizes a teacher to establish court-ordered service credit in TRS. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 3407 amends the Government Code to set forth provisions regarding court-ordered credit in the Teacher Retirement System of Texas (TRS). The bill defines a "court order" as a court order that finds that a school district wrongfully terminated a member, requires the school district to reemploy the member, and requires the establishment of credit in TRS for all or part of the service credit the member would have otherwise established during the period between the date of the wrongful termination and the date of reemployment. The bill authorizes a member to establish equivalent membership service credit for credit required by a court order. The bill authorizes a member to establish credit by depositing with TRS, for each year of service, the actuarial present value, at the time of deposit, of the additional standard retirement benefits that would be attributable to the service credit as determined by TRS. After a member makes the required deposits, TRS is required to grant the member one year of equivalent membership service credit for each year of credit required under the court order. The bill prohibits TRS from using service credit granted by order in computing a member's annual average compensation. The bill requires all court-ordered credit to be computed on a September 1 through August 31 school year. EFFECTIVE DATE September 1, 2001. The bill applies to court-ordered credit regardless of whether the proceeding occurred before, on, or after that date. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3407 differs from the original by removing the provisions relating to the 10 year service credit eligibility requirement, the fee for establishing credit, and the prohibition against the establishment of more than two years of service credit. The substitute modifies the procedure by which a member may establish credit. The substitute also provides that this bill applies to court-ordered credit regardless of whether the proceeding occurred before, on, or after the effective date of the Act.