89R16864 KFF-F     By: González of El Paso H.B. No. 4591       A BILL TO BE ENTITLED   AN ACT   relating to contributions to and benefits under certain fire and   police pension funds.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 1A, Chapter 101 (H.B. 31), Acts of the   43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's   Texas Civil Statutes), is amended by adding Subdivision (3-a) to   read as follows:          (3-a) "Qualified actuary" means an actuary that meets the   qualifications under Section 10A(b)(1) of this Act.          SECTION 2.  Section 2, Chapter 101 (H.B. 31), Acts of the   43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's   Texas Civil Statutes), is amended to read as follows:          Sec. 2.  PARTICIPATION IN FUND; WAGE DEDUCTIONS.  Each   member fireman and policeman in the employment of such city or town   must participate in said fund, except in times of national   emergency those persons as are employed during that time shall not   be required to participate in the fund, and said city or town shall   be authorized to deduct a sum of not less than one per cent (1%) nor   in excess of six per cent (6%) of his wages from each month to form a   part of the fund known as the Firemen and Policemen Pension Fund,   except that the city or town shall deduct a sum less than one per   cent (1%) or more than six per cent (6%) of the member's wages each   month to form a part of the fund if the board of trustees of that   fund increases or decreases the percentage of wages to be   contributed to the fund under the provisions of Section 10A, 14A-1,   or 14B [14A] of this Act. The amount to be deducted from the wages   of those named above who must participate in the fund is to be   determined by the board of trustees as provided for in Section 1 of   this Act within the minimum and maximum deductions herein provided   or as otherwise provided under the provisions of Section 10A,   14A-1, or 14B [14A] of this Act.          SECTION 3.  Section 3, Chapter 101 (H.B. 31), Acts of the   43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's   Texas Civil Statutes), is amended to read as follows:          Sec. 3.  PAYMENTS TO FUND. There shall be deducted for such   fund from the wages of each fireman and policeman a sum to be   determined by the board of trustees under the provisions of Section    [Sections] 2, 10A, 14A-1, or 14B [and 14A] of this Act. Any   donations made to such fund and rewards received by any member of   either of said funds, and all funds received from any source for   such fund shall be deposited in like manner to the credit of such   fund.          SECTION 4.  Sections 10A(b) and (c), Chapter 101 (H.B. 31),   Acts of the 43rd Legislature, 1st Called Session, 1933 (Article   6243b, Vernon's Texas Civil Statutes), are amended to read as   follows:          (b)  None of the changes made under Subsection (a) of this   section may be made unless all of the following conditions are   sequentially complied with:                (1)  the change must be approved by a qualified actuary   selected by a four-fifths vote of the Board;  the actuary's approval   must be based on an actuarial finding that the change is supported   by the existing funding status of the fund or by a contribution   increase by the city or town or by both the city or town and the   members of the pension fund; the actuary, if an individual, must be   a Fellow of the Society of Actuaries or a Fellow of the Conference   of Actuaries in Public Practice or a Member of the American Academy   of Actuaries;  the actuary, if an actuarial consulting firm, must   be established in the business of providing actuarial consulting   services to pension plans and have experienced personnel able to   provide the requested services; the findings upon which the   properly selected and qualified actuary's approval are based are   not subject to judicial review;                (2)  the change must be approved by a majority of all   persons then making contributions to the fund as employees of a   department to which the change would directly apply, voting by   secret ballot at an election held after 10 [ten (10)] days' notice   given by posting at a prominent place in every station or substation   of a department to which the change would directly apply and in the   city hall;                (3)  the changes, except changes made under the   provisions of [Subdivision (1),] Subsection (a)(1) [(a),] of this   section, shall apply only to active member employees who are   members of the affected departments at the time the change becomes   effective and those who enter the departments thereafter; and                (4)  the changes shall not deprive any person, without   his written consent, of any right to receive a pension or benefits   which have already become vested and matured.          (c)  If the Board of Trustees proposes to change benefits   under [Subdivision (1),] Subsection (a)(1) [(a),] of this section,   the change is not effective until the change is finally approved in   accordance with this subsection.  The Board shall submit the change   for approval by the city's or town's governing body. If disapproved   by the governing body, or if the governing body fails to act not   later than the 60th day after the date [within sixty (60) days] of   presentation to the governing body, the Board, by resolution passed   by a majority of the whole Board, plus one, may require the city's   or town's governing body to hold an election, as soon as   practicable, for approval of the change by the qualified voters of   the city or town.  Any change proposed and subsequently approved by   the governing body of the city or town or by the voters, as   applicable, under this subsection becomes effective as of the   beginning of the city's or town's next fiscal year.          SECTION 5.  Chapter 101 (H.B. 31), Acts of the 43rd   Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's   Texas Civil Statutes), is amended by amending Sections 14, 14A, and   14B and adding Section 14A-1 to read as follows:          Sec. 14.  USE OF PUBLIC FUNDS; CITY OR TOWN MINIMUM   CONTRIBUTION. (a) Except as provided by this section and Section   14A, 14A-1, or 14B of this Act, no funds shall be paid out of the   public treasury of any such incorporated city or town, in carrying   out any of the provisions of this law, except on a majority vote of   the voters of such city or town, and where such funds have been   voted on as provided by law, said city or town shall contribute such   amount.          (b)  Subject to an increase under Section 14A or 14A-1 of   this Act or a decrease under Section 14B of this Act, the city or   town shall contribute an amount to the pension fund that is not less   than 18 percent of the total amount expended by the city or town on   member wages.          Sec. 14A.  CITY OR TOWN CONTRIBUTION INCREASES.  (a)  The   city or town may increase its contribution rate above the rate   prescribed by Section 14(b) of this Act based on a qualified   actuary's report only if the governing body of the city or town, or   a majority vote of the voters of the city or town, approves the   increase to the city or town contribution rate.          (b)  The Board of Trustees may submit for approval by the   city's or town's governing body a proposed contribution rate   increase under Subsection (a) of this section.  If the proposed   contribution rate increase is disapproved by the governing body, or   if the governing body fails to act not later than the 60th day after   the date the proposal is presented to the governing body, the Board,   by resolution passed by a majority of the whole Board, plus one, may   require the city's or town's governing body to hold an election, as   soon as practicable, for approval of the change by the qualified   voters of the city or town. Any change proposed and subsequently   approved by the governing body or by the voters, as applicable,   under this subsection becomes effective as of the beginning of the   city's or town's next fiscal year.          Sec. 14A-1.  JOINT CITY OR TOWN AND MEMBER CONTRIBUTION   INCREASES.  (a)  If at any time a qualified actuary [that meets the   requirements of Subdivision (1), Subsection (b), Section 10A of   this Act,] determines that the total contribution rate, expressed   as a percentage of wages, is insufficient to amortize the unfunded   actuarial accrued liability, as defined under the applicable   Governmental Accounting Standards Board Statement [No. 25], over a   30-year [40-year] period:                (1)  the city's or town's governing body may increase   the city or town contribution rate; and                (2)  to the extent that the city or town contribution   rate increases under Subdivision (1) of this subsection, the member   contribution rate must increase by an amount equal to the member   contribution rate before the increase multiplied by a fraction:                      (A)  the numerator of which is the increase in the   amount of the city or town contribution rate; and                      (B)  the denominator of which is the amount of the   city or town contribution rate before the increase.          (b)  The sum of the city or town contribution rate and the   member contribution rate after an increase under this section may   not exceed the total contribution rate determined by the qualified   actuary to be necessary to amortize the unfunded actuarial accrued   liability over a 30-year [forty (40) year] period.          Sec. 14B.  CITY OR TOWN AND MEMBER CONTRIBUTION DECREASES.     (a)  If at any time a qualified actuary [that meets the requirements   of Section 10A(b)(1) of this Act] determines that the pension fund   has sufficient assets to have no [total contribution rate,   expressed as a percentage of wages, is sufficient to amortize the]   unfunded actuarial accrued liability, as defined under the   applicable Governmental Accounting Standards Board Statement   [No. 25, over a 25-year period]:                (1)  the city's or town's governing body may decrease   the city or town contribution rate; and                (2)  to the extent that the city or town contribution   rate decreases under Subdivision (1) of this subsection, the member   contribution rate must decrease by an amount equal to the member   contribution rate before the decrease multiplied by a fraction:                      (A)  the numerator of which is the decrease in the   amount of the city or town contribution rate; and                      (B)  the denominator of which is the amount of the   city or town contribution rate before the decrease.          (b)  The sum of the city or town contribution rate and the   member contribution rate after a decrease under this section may   not be less than the total contribution rate, as determined by the   qualified actuary, required for the pension fund to have no [be   necessary to amortize the] unfunded actuarial accrued liability   [over a 25-year period].          SECTION 6.  Section 14(b), Chapter 101 (H.B. 31), Acts of the   43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's   Texas Civil Statutes), as added by this Act, applies to   contributions made to the pension fund subject to that section on or   after May 1, 2023.          SECTION 7.  This Act takes effect September 1, 2025.