By: West  S.B. No. 1527          (In the Senate - Filed February 21, 2025; March 6, 2025,   read first time and referred to Committee on Finance;   March 24, 2025, reported adversely, with favorable Committee   Substitute by the following vote:  Yeas 14, Nays 1; March 24, 2025,   sent to printer.)Click here to see the committee vote     COMMITTEE SUBSTITUTE FOR S.B. No. 1527 By:  West     A BILL TO BE ENTITLED   AN ACT     relating to the administration of, contributions to, and benefits   under the public retirement systems for police and firefighters in   certain municipalities.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 2.01, Article 6243a-1, Revised Statutes,   is amended by adding Subdivision (3-a) to read as follows:                (3-a)  "Actuarially determined contribution rate"   means for any city fiscal year, the city contribution rate:                      (A)  expressed as a percentage of members'   projected aggregate computation pay for the fiscal year; and                      (B)  actuarially determined in accordance with   Section 4.02 of this article.          SECTION 2.  Article 6243a-1, Revised Statutes, is amended by   adding Section 2.026 to read as follows:          Sec. 2.026.  ADMINISTRATIVE REQUIREMENTS. (a)  As a public   retirement system within the meaning of Section 802.001, Government   Code, the pension system is subject to and must comply with Chapter   802, Government Code.          (b)  Any plan or rule adopted under former Section 2.025 of   this article:                (1)  may not be implemented; and                 (2)  is unenforceable.          SECTION 3.  Article 6243a-1, Revised Statutes, is amended by   adding Section 3.014 to read as follows:          Sec. 3.014.  CITY AND BOARD APPROVAL REQUIRED FOR CERTAIN   ACTIONS. Notwithstanding any other provision of this article, the   following actions must be approved by the board and the city council   if, as a result of taking the action, the action will result in an   increase in the pension system's liabilities:                (1)  the settlement of any lawsuit by the board;                 (2)  any proposed increase to benefits by the board,   including any adjustment under Section 6.12 of this article; and                (3)  any changes to actuarial assumptions under Section   2.02 of this article, including the current discount rate.          SECTION 4.  Section 4.02, Article 6243a-1, Revised Statutes,   is amended by amending Subsection (d) and adding Subsections (d-1),   (e-1), (f), (g), (h), and (h-1) to read as follows:          (d)  Subject to Section 4.025 of this article, the city shall   make contributions to the pension system biweekly using an   actuarially determined contribution rate with a five-year step-up   period beginning October 2024. Subject to Subsections (e-1) and   (f) of this section, the actuarially determined contribution rate   for any given city fiscal year is the sum of the following as   determined in the actuarial valuation for the plan year preceding   the fiscal year:                (1)  an established 30-year closed amortization amount   with five-year step-up and no step-down for the unfunded actuarial   accrued liability and administrative expenses, determined based on   the January 1, 2023, actuarial valuation, as shown in the following   fixed dollar schedule, divided by the members' projected aggregate   computation pay for each city fiscal year:   City Fiscal Year Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount   Ending Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount   September 30 Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount   2025 $161,656,000 $7,000,000 $168,656,000   2026 $179,482,000 $7,000,000 $186,482,000   2027 $197,889,000 $7,000,000 $204,889,000   2028 $217,163,000 $7,000,000 $224,163,000   2029 $237,336,000 $7,000,000 $244,336,000   2030 $242,341,000 $7,000,000 $249,341,000   2031 $248,399,000 $7,000,000 $255,399,000   2032 $254,609,000 $7,000,000 $261,609,000   2033 $260,975,000 $7,000,000 $267,975,000   2034 $267,499,000 $7,000,000 $274,499,000   2035 $274,186,000 $7,000,000 $281,186,000   2036 $281,041,000 $7,000,000 $288,041,000   2037 $288,067,000 $7,000,000 $295,067,000   2038 $295,269,000 $7,000,000 $302,269,000   2039 $302,650,000 $7,000,000 $309,650,000   2040 $310,217,000 $7,042,000 $317,259,000   2041 $317,972,000 $7,218,000 $325,190,000   2042 $325,921,000 $7,399,000 $333,320,000   2043 $334,069,000 $7,584,000 $341,653,000   2044 $342,421,000 $7,773,000 $350,194,000   2045 $350,982,000 $7,967,000 $358,949,000   2046 $359,756,000 $8,167,000 $367,923,000   2047 $368,750,000 $8,371,000 $377,121,000   2048 $377,969,000 $8,580,000 $386,549,000   2049 $387,418,000 $8,795,000 $396,213,000   2050 $397,104,000 $9,014,000 $406,118,000   2051 $407,031,000 $9,240,000 $416,271,000   2052 $417,207,000 $9,471,000 $426,678,000   2053 $427,637,000 $9,708,000 $437,345,000   2054 $438,328,000 $9,950,000 $448,278,000                (2)  normal cost; and                (3)  subject to Subsection (d-1) of this section, new   amortization layers as necessary to amortize the difference between   the expected remaining balance of all previous years' layers and   the actual unfunded actuarial accrued liability for the given   valuation [in an amount equal to the sum of:                [(1)  the greater of:                      [(A)  34.5 percent of the aggregate computation   pay paid to members during the period for which the contribution is   made; or                      [(B)  the applicable amount set forth below:                            [(i)  $5,173,000 for the biweekly pay   periods beginning with the first biweekly pay period that begins   after September 1, 2017, and ends on the last day of the first   biweekly pay period that ends after December 31, 2017;                            [(ii)  $5,344,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (i) of this paragraph;                            [(iii)  $5,571,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (ii) of this paragraph;                            [(iv)  $5,724,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (iii) of this paragraph;                            [(v)  $5,882,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (iv) of this paragraph;                            [(vi)  $6,043,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (v) of this paragraph;                            [(vii)  $5,812,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (vi) of this paragraph;                            [(viii)  $6,024,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (vii) of this paragraph through the   biweekly pay period that ends after December 31, 2024; and                            [(ix)  $0 for each subsequent biweekly pay   period beginning with the first biweekly pay period following the   last biweekly pay period described by Subparagraph (viii) of this   paragraph; and                [(2)  except as provided by Subsection (e) of this   section, an amount equal to 1/26th of $13 million].          (d-1)  For purposes of Subsection (d)(3) of this section, new   amortization layers must be amortized over a closed amortization   period of 20 years or until January 1, 2053, whichever is later. If   the actuarial assets of the fund exceed the actuarial liabilities   for a given valuation, the outstanding layers may be collapsed into   a single layer with a closed amortization period of 20 years or   until January 2, 2053, whichever is later.          (e-1)  Before July 1 of each year, the pension system's   qualified actuary and the city's actuary shall respectively   calculate and recommend an actuarially determined contribution   rate for the following city fiscal year. If the difference between   the recommended rates is:                (1)  three percent or less, the actuarially determined   contribution rate shall be the rate recommended by the pension   system's qualified actuary; or                (2)  greater than three percent, the board and the city   council shall engage in a 30-day reconciliation period:                      (A)  during which, if the pension system's   qualified actuary and the city's actuary reconcile their respective   calculations, the reconciled rate shall be the actuarially   determined contribution rate; or                      (B)  at the conclusion of which, if the pension   system's qualified actuary and the city's actuary do not reconcile   their respective calculations, the average of the rates recommended   by each actuary under this section shall be the actuarially   determined contribution rate.          (f)  If in any plan year the actuarially determined   contribution rate, excluding the amounts provided under Subsection   (d)(1) of this section, is outside of the minimum or maximum rates   shown in the following schedule, the difference between the   actuarially determined contribution rate and the minimum or   maximum, as applicable, will be amortized over a closed period of 20   years or until January 1, 2053, whichever is later:   Plan Year City Fiscal Year Ending September 30 Minimum Rate Maximum Rate   2023 2025 6.78% 6.78%   2024 2026 6.66% 6.66%   2025 2027 6.57% 6.57%   2026 2028 6.51% 6.51%   2027 2029 6.45% 6.45%   2028 2030 1.39% 11.39%   2029 2031 1.34% 11.34%   2030 2032 1.29% 11.29%   2031 2033 1.25% 11.25%   2032 2034 1.21% 11.21%   2033 2035 1.17% 11.17%   2034 2036 1.14% 11.14%   2035 2037 1.12% 11.12%   2036 2038 1.09% 11.09%   2037 2039 1.06% 11.06%   2038 2040 1.03% 11.03%   2039 2041 0.99% 10.99%   2040 2042 0.97% 10.97%   2041 2043 0.95% 10.95%   2042 2044 0.94% 10.94%   2043 2045 0.95% 10.95%   2044 2046 0.96% 10.96%   2045 2047 0.96% 10.96%   2046 2048 0.96% 10.96%   2047 2049 0.96% 10.96%   2048 2050 0.96% 10.96%   2049 2051 0.96% 10.96%   2050 2052 0.96% 10.96%   2051 2053 0.96% 10.96%   2052 2054 0.96% 10.96%          (g)  If the city council determines that the fund is   projected to be fully funded in over 30 years, the city council may,   in its sole discretion, waive the requirements of Subsection (f) of   this section. The board may recommend to the city council that the   city council waive the requirements of Subsection (f) of this   section.          (h)  Notwithstanding Subsection (d) or any other provision   of this section, for the city's fiscal years ending September 30,   2025, through September 30, 2029, the city contribution amount may   not under any circumstances exceed the sum of:                (1)  the applicable fixed dollar amount under   Subsection (d)(1) of this section; and                (2)  the maximum percentage provided under Subsection   (f) of this section multiplied by the members' projected aggregate   computation pay for the applicable city fiscal year.          (h-1)  This subsection and Subsection (h) of this section   expire October 1, 2029.          SECTION 5.  Section 3.014, Article 6243a-1, Revised   Statutes, as added by this Act, applies only to an action taken on   or after the effective date of this Act.          SECTION 6.  The following provisions of Article 6243a-1,   Revised Statutes, are repealed:                (1)  Section 2.025; and                (2)  Section 4.02(e).          SECTION 7.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2025.     * * * * *