HBA-TBM S.B. 292 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 292 By: Armbrister Pensions & Investments 4/29/2001 Engrossed BACKGROUND AND PURPOSE Every legislative session, an Employees Retirement System of Texas (ERS) omnibus bill is passed. Senate Bill 292 is the ERS omnibus bill. Senate Bill 292 enhances the application and consistency of benefits for ERS members, provides cost of living adjustments for ERS annuitants, contains general housekeeping provisions regarding ERS, and makes clarifications in some of the statutes affecting ERS. 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 Employees Retirement System in SECTION 6 (Section 813.513, Government Code), SECTION 17 (Section 815.102, Government Code), SECTION 31 (Section 13B, Article 3.50-2, Insurance Code), and SECTION 41 of this bill. ANALYSIS Senate Bill 292 amends the Government Code to modify the establishment of current service credit in the Employees Retirement System of Texas (ERS) (Sec. 813.201). The bill authorizes a former member of the employee class who is a participant in the optional retirement program to reestablish service credit previously canceled in ERS (Sec. 813.504). The bill sets forth provisions relating to the conversion of accumulated annual and sick leave to service credit of a member and a death benefit designee. The bill authorizes a death benefit designee to use the deceased member's sick leave credit to qualify for making a death benefit plan selection. If a member returns to employment with the state before a specified time, the member is not entitled to service credit previously credited (Secs. 813.509 and 813.511). The bill sets forth provisions and authorizes the board of trustees of ERS (board) to adopt rules regarding the establishment of equivalent membership service credit in ERS (Sec. 813.513). The bill modifies the standard service retirement annuity for certain peace officers (Sec. 814.107). The bill provides that the designation of a former spouse as the beneficiary for a guaranteed optional annuity or a death benefit annuity is invalid unless it is filed after the divorce (Secs. 814.108, 814.401, and 814.505). The bill modifies the effective date of a change in annuity selection (Sec. 814.1081). The bill prohibits an application for an occupational disability retirement annuity from being made after the second anniversary of the date the injury or disease that causes the disability occurred unless permitted by the executive director of ERS on a showing of good cause (Sec. 814.201). The bill prohibits an eligible member from applying for or receiving a nonoccupational disability annuity if the member is eligible for a service retirement annuity (Sec. 814.202). The bill modifies the computation of a standard disability retirement annuity (Sec. 814.206). The bill sets forth the effective date of a disability retirement annuity increase for certain peace officers (Sec. 814.207). The bill authorizes the board to adopt rules for hearings on contested cases or disputed claims. Rules adopted regarding a contested case hearing or disputed claim control over procedural rules (Sec. 815.102). The bill provides that provisions relating to a contested case hearing between a contractor and a unit of state government do not apply to ERS and the acceptance of benefits by ERS under a contract does not waive immunity from suit or liability (Sec. 815.103). The bill requires ERS rather than the board to transfer assets from an interest account to an employees saving account (Sec. 815.318). The bill modifies the collection of member contributions (Sec. 815.402). The bill establishes the confidentiality of the records of retirees, beneficiaries, and alternate payees and authorizes ERS to require a person to provide the person's social security number for administrative purposes (Secs. 815.503 and 840.402). The bill provides that survivor benefits for law enforcement and emergency services personnel paid to a minor child end on the child's 18th birthday rather than the child's 21st birthday (Sec. 615.023). The bill modifies the termination date of survivor benefits health insurance coverage for a minor child (Sec. 615.074). The bill requires ERS rather than the board to provide notification of the acceptance or denial of a survivor benefits claim (Secs. 615.042 and 615.043). The bill modifies the appeals process for a survivor benefits claim that has been denied (Sec. 615.044). The bill establishes the confidentiality of records of law enforcement and emergency services personnel (Sec. 615.045). S.B. 292 amends the Insurance Code to authorize the board to appoint an advisory committee for the Texas Employees Uniform Group Insurance program (insurance program) (Sec. 4, Art. 3.50-2). The bill modifies the appeals process for the insurance program (Sec. 4B, Art. 3.50-2). The bill modifies provisions relating to coverage for a serious mental illness (Sec. 5, Art. 3.50-2). The bill modifies the confidentiality of records of participants in the insurance program and authorizes the board to require a person to provide the person's social security number for administrative purposes (Sec. 10, Art. 3.50-2). The bill provides that remedies provided for the insurance program are the exclusive remedies available to an insured (Sec. 10A, Art. 3.50-2). The bill deletes provisions authorizing the board to expel an employee, annuitant, or dependent from the insurance program and sets forth provisions regarding sanctions and the authority of ERS to impose such sanctions for violations of the insurance program's regulations (Sec. 13A, Art. 3.50-2). The bill sets forth provisions relating to the collection of information regarding misconduct by an insured (Sec. 13A-1, Art. 3.50-2). The board is authorized to adopt rules for the use of a debit card or other similar technology in regard to a cafeteria plan (Sec. 13B, Art. 3.50-2). The bill repeals provisions relating to out of state service, service for certain governmental employees, a temporary service retirement option for members of ERS employed at South Texas Hospital, the collection of membership fees, sanctions for fraud, and a group benefits advisory committee (SECTION 40). The bill sets forth guidelines regarding annuity payments and adjustments and authorizes the board to adopt rules to implement the guidelines (SECTION 41). The bill authorizes a member of ERS who is otherwise entitled to use sick leave for service credit to use service credit in ERS that was canceled and reestablished before September 1, 2001 to qualify for the 10 year membership service requirement (SECTION 42). EFFECTIVE DATE September 1, 2001. Provisions relating to the establishment of equivalent membership service credit take effect January 1, 2002.