85R1807 TSR-D     By: Flynn H.B. No. 2434       A BILL TO BE ENTITLED   AN ACT   relating to requiring certain public retirement systems to adopt a   funding plan to achieve actuarial soundness.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 801.209(a), Government Code, is amended   to read as follows:          (a)  For each public retirement system, the board shall post   on the board's Internet website, or on a publicly available website   that is linked to the board's website, the most recent data from   reports received under Sections 802.101, 802.103, 802.104,   802.105, 802.108, 802.2015, [and] 802.2016, and 802.2017.          SECTION 2.  Sections 802.002(a) and (c), Government Code,   are amended to read as follows:          (a)  Except as provided by Subsection (b), the Employees   Retirement System of Texas, the Teacher Retirement System of Texas,   the Texas County and District Retirement System, the Texas   Municipal Retirement System, and the Judicial Retirement System of   Texas Plan Two are exempt from Sections 802.101(a), 802.101(b),   802.101(d), 802.102, 802.103(a), 802.103(b), 802.2015, 802.2016,   802.2017, 802.202, 802.203, 802.204, 802.205, 802.206, and   802.207. The Judicial Retirement System of Texas Plan One is exempt   from all of Subchapters B and C except Sections 802.104 and 802.105.   The optional retirement program governed by Chapter 830 is exempt   from all of Subchapters B and C except Section 802.106.          (c)  Notwithstanding any other law, a defined contribution   plan is exempt from Sections 802.101, 802.1012, 802.1014, 802.103,   802.104, 802.2017, and 802.202(d).  This subsection may not be   construed to exempt any plan from Section 802.105 or 802.106(h).          SECTION 3.  Subchapter C, Chapter 802, Government Code, is   amended by adding Section 802.2017 to read as follows:          Sec. 802.2017.  PLANS TO RESTORE FUNDING FOR CERTAIN   RETIREMENT SYSTEMS. (a) In this section, "governmental entity" has   the meaning assigned by Section 802.1012.          (b)  This section does not apply to a public retirement   system and its associated governmental entity if the retirement   system and governmental entity have already developed and are   adhering to, as determined by the board, a funding soundness   restoration plan under Section 802.2015 or 802.2016.          (c)  If, on March 1, 2018, the most recent actuarial study or   separate report filed with the board by the governing body of a   public retirement system under Section 802.101 or other law under   this title or under Title 109, Revised Statutes, indicates that the   retirement system's funding level is not sufficient to achieve and   maintain an amortization period that does not exceed 30 years, on   receipt of a notice to that effect from the board, the governing   body of the public retirement system and the associated   governmental entity shall immediately:                (1)  notwithstanding any other law and to the extent   necessary to achieve the funding level described by this   subsection, as appropriate:                      (A)  suspend any increases in the pay or salaries   of the governmental entity's officers or employees who are active   members of the retirement system;                      (B)  seek to issue a bond or other obligation   under Chapter 107, Local Government Code;                      (C)  increase the contribution rates of the   governmental entity and the active members of the retirement   system; and                      (D)  discontinue the provision of cost-of-living   adjustments; and                (2)  jointly develop a written plan that identifies   specific measures that the retirement system and its associated   governmental entity shall implement to restore funding to a level   adequate to achieve and maintain an amortization period that does   not exceed 30 years and prescribes a schedule for implementation of   those measures.          (d)  The public retirement system shall submit a copy of the   plan to restore funding developed under Subsection (c) to the   board.          (e)  If the board determines that implementation of the plan   will restore funding to a level adequate to achieve and maintain an   amortization period that does not exceed 30 years, the board shall   approve the plan.  The board may require that the retirement system   provide the board with an actuarial analysis of a plan for purposes   of making a determination under this section.          (f)  Not later than the 30th day after the date on which the   board receives a plan under Subsection (d) or (h), the board shall   inform the public retirement system and the retirement system's   associated governmental entity whether the plan is approved.          (g)  If a plan to restore funding is approved under this   section, the public retirement system and its associated   governmental entity shall implement the plan and are released from   taking the actions required by Subsection (c)(1) to the extent that   an action is not included in the plan.          (h)  If the board does not approve a plan to restore funding   under Subsection (e):                (1)  the board shall provide recommendations to the   public retirement system and its associated governmental entity   regarding changes to the plan that would result in the board's   approval; and                (2)  the public retirement system and its associated   governmental entity may submit amended or alternative plans in a   manner prescribed by the board until the entities receive the   board's approval of a plan.          (i)  To the extent of a conflict between a provision of a plan   to restore funding that has been approved by the board under this   section and any other law, including Title 109, Revised Statutes,   the plan prevails.          (j)  A public retirement system and its associated   governmental entity that implement a plan to restore funding under   this section shall annually report to the board regarding any   progress made by the system and entity toward improved actuarial   soundness under the plan.          (k)  The board may adopt rules necessary to implement this   section, including rules that allow a public retirement system and   its associated governmental entity to amend an approved plan to   restore funding.          SECTION 4.  This Act takes effect September 1, 2017.