HB3474 - Relating to the evaluation and reporting of investment practices and performance of certain public retirement systems.

      H.B. No. 3474         AN ACT   relating to the evaluation and reporting of investment practices   and performance of certain public retirement systems.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 802.109, Government Code, is amended by   amending Subsections (d), (e), (e-1), (f), and (g) and adding   Subsections (d-1), (d-2), and (j) to read as follows:          (d)   In accordance with a schedule of deadlines prescribed by   the board and except as provided by Subsection (e), a [ A ] public   retirement system shall conduct an [ the ] evaluation under   [ described by ] Subsection (a):                (1)  once every three years, if the total assets of the   retirement system as of the date [ last day ] of the preceding   evaluation [ fiscal year ] were at least $100 million; or                (2)   subject to Subsection (d-1), once every six years,   if the total assets of the retirement system as of the date [ last   day ] of the preceding evaluation [ fiscal year ] were at least $30   million and less than $100 million.           (d-1)     If a public retirement system is conducting   evaluations every six years as required by Subsection (d)(2) and   the system's total pension liability increases to at least $100   million during a fiscal year, the system shall complete the next   evaluation under Subsection (a) by the next appropriate deadline,   as determined by the board, under the evaluation schedule.           (d-2)     Subject to Subsection (d-1) and except as provided by   Subsection (e), a public retirement system subject to an evaluation   requirement under Subsection (d)(1) or (2) remains subject to that   same requirement unless both the total assets and the total pension   liability of the system decrease to an amount that is below the   minimum amount prescribed by the applicable requirement.          (e)  A public retirement system is not required to conduct an   [ the ] evaluation under [ described by ] Subsection (a) if the total   assets of the retirement system were less than $30 million as of the   last day of the [ preceding ] fiscal year immediately preceding the   next evaluation deadline under the evaluation schedule [ were less   than $30 million ].          (e-1)   An [ Not later than the 30th day after the date an ]   independent firm that completes an evaluation described by   Subsection (a)[ , the independent firm ] shall:                (1)  submit to the public retirement system for   purposes of discussion and clarification a substantially completed   [ preliminary ] draft of the evaluation report; and                (2)  request in writing that the system[ , on or before   the 30th day after the date the system receives the preliminary   draft, ] submit to the firm:                      (A)  a description of any action taken or expected   to be taken in response to a recommendation made in the evaluation;   and                      (B)  any written response of the system that the   system wants to accompany the final evaluation report.          (f)  The independent firm shall file the final evaluation   report, including the evaluation results and any response received   from the public retirement system, with the governing body of the   system[ :                [ (1)     not earlier than the 31st day after the date on   which the preliminary draft is submitted to the system; and                [ (2)  not later than the later of:                      [ (A)     the 60th day after the date on which the   preliminary draft is submitted to the system; or                      [ (B)     May 1 in the year following the year in which   the system is evaluated under Subsection (a) ].          (g)   The [ Not later than the 31st day after the date the ]   governing body of a public retirement system that receives a report   of an evaluation under this section[ , the governing body ] shall   submit the report to the board.           (j)  In this section:                 (1)     "Evaluation schedule" means the schedule of   deadlines prescribed by the board under Subsection (d).                 (2)     "Total pension liability" means the portion of the   present value of projected retirement benefit payments to be   provided through the retirement system to active and inactive   members that is attributable to those members' past periods of   service, in compliance with Statement No.   68 of the Governmental   Accounting Standards Board.          SECTION 2.  Not later than January 1, 2026, the State Pension   Review Board shall develop the schedule of deadlines required by   Section 802.109(d), Government Code, as amended by this Act.          SECTION 3.  This Act takes effect September 1, 2025.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 3474 was passed by the House on May 6,   2025, by the following vote:  Yeas 147, Nays 0, 1 present, not   voting.     ______________________________   Chief Clerk of the House                 I certify that H.B. No. 3474 was passed by the Senate on May   19, 2025, by the following vote:  Yeas 31, Nays 0.     ______________________________   Secretary of the Senate       APPROVED:  _____________________                      Date                           _____________________                    Governor