HB3594 - Relating to the administration of a retirement health care plan for firefighters and police officers in certain municipalities.

      H.B. No. 3594         AN ACT   relating to the administration of a retirement health care plan for   firefighters and police officers in certain municipalities.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 1.02, Chapter 1332 (S.B. 1568), Acts of   the 75th Legislature, Regular Session, 1997 (Article 6243q,   Vernon's Texas Civil Statutes), is amended by amending Subdivisions   (3), (8), and (8-a) and adding Subdivisions (4-a) and (6-b-1) to   read as follows:                (3)  "Beneficiary" means a retiree, or the spouse or   other eligible dependent of a retiree, who is entitled to receive   retiree health benefits under Section 5.01 [ 5.01(a) ] of this Act.                 (4-a)     "Default rate" means the actuarial assumed rate   of return as determined by the fund's actuary.                 (6-b-1)     "Months of service" means the number of full   months of service beginning on the date the firefighter or police   officer becomes a member of the fund until the date the firefighter   or police officer retires or otherwise terminates employment as a   firefighter or police officer, less the number of full months of   service during which the member:                       (A)     was engaged in active service with any   uniformed service of the United States and did not purchase credit   for that service in accordance with Section 4.023 of this Act;                       (B)     took other unpaid leave, including unpaid   leave described by Section 4.024 of this Act, and did not purchase   credit for that leave in accordance with applicable law; or                       (C)     was placed on unpaid leave by the   municipality to which this Act applies.                (8)  "Retiree" means an individual who was a   firefighter or police officer who retired under the pension act   [ whose retirement date is ] after September 30, 1989.                (8-a)  "Retiree health plan" means the group family   health plan for retirees and other beneficiaries :                       (A)   established under this Act; and                       (B)  in effect on October 1, 2025  [ by the   collective bargaining agreements and the master contract   document ].          SECTION 2.  Section 1.05, Chapter 1332 (S.B. 1568), Acts of   the 75th Legislature, Regular Session, 1997 (Article 6243q,   Vernon's Texas Civil Statutes), is amended to read as follows:          Sec. 1.05.  EXEMPTIONS.   (a) The health benefits paid or   payable by the fund are exempt from garnishment, assignment,   attachment, judgments, other legal processes, and inheritance or   other taxes established by this state.           (b)     Fund assets are exempt from attachment, execution,   alienation, and forced sale. A judgment lien or abstract of   judgment may not be filed or perfected against the fund on fund   assets. A judgment lien or abstract of judgment filed against the   fund on fund assets is void.          SECTION 3.  Article 1, Chapter 1332 (S.B. 1568), Acts of the   75th Legislature, Regular Session, 1997 (Article 6243q, Vernon's   Texas Civil Statutes), is amended by adding Section 1.06 to read as   follows:           Sec.   1.06.     CONSTRUCTION OF ACT. This Act does not provide   any benefit that is not specifically provided by this Act.          SECTION 4.  Sections 2.01(a) and (c), Chapter 1332 (S.B.   1568), Acts of the 75th Legislature, Regular Session, 1997 (Article   6243q, Vernon's Texas Civil Statutes), are amended to read as   follows:          (a)  The [ firefighters' and police officers' retiree health   care ] fund [ of a municipality ] is governed by a board of trustees   consisting of the following nine members:                (1)  the mayor of the municipality to which this Act   applies or the mayor's designee;                (2)  two members of the [ municipal ] governing body of   the municipality to which this Act applies , appointed by that   governing body;                (3)  two members of the fund who are firefighters below   the rank of fire chief, elected by secret ballot by a majority of   the votes cast by the members of the fund who are firefighters;                (4)  two members of the fund who are police officers   below the rank of police chief, elected by secret ballot by a   majority of the votes cast by the members of the fund who are police   officers;                (5)  a retiree representative of the fire department,   elected by secret ballot by a majority of the votes cast by the   retirees of the fire department who are beneficiaries of the fund   and the surviving spouses of deceased firefighters who are   beneficiaries of the fund; and                (6)  a retiree representative of the police department,   elected by secret ballot by a majority of the votes cast by the   retirees of the police department who are beneficiaries of the fund   and the surviving spouses of deceased police officers who are   beneficiaries of the fund.          (c)  The fund is independent of the control of the   municipality to which this Act applies .          SECTION 5.  Sections 2.02(b), (c), and (d), Chapter 1332   (S.B. 1568), Acts of the 75th Legislature, Regular Session, 1997   (Article 6243q, Vernon's Texas Civil Statutes), are amended to read   as follows:          (b)  The two members of the [ municipal ] governing body of the   municipality to which this Act applies serve on the board for the   term of the office to which they were elected or appointed, provided   that the term of the member on the board expires on the day the   member ceases to be a member of the governing body for any reason .          (c)  The two members of the board [ fund ] who are firefighters   below the rank of fire chief serve on the board for staggered   four-year terms, with one member's term expiring every two years.          (d)  The two members of the board [ fund ] who are police   officers below the rank of police chief serve on the board for   staggered four-year terms, with one member's term expiring every   two years.          SECTION 6.  Section 2.04(b), Chapter 1332 (S.B. 1568), Acts   of the 75th Legislature, Regular Session, 1997 (Article 6243q,   Vernon's Texas Civil Statutes), is amended to read as follows:          (b)  The board in its discretion may elect other officers of   the board.  [ An officer may be, but is not required to be, a   trustee. ]          SECTION 7.  Section 3.01(a), Chapter 1332 (S.B. 1568), Acts   of the 75th Legislature, Regular Session, 1997 (Article 6243q,   Vernon's Texas Civil Statutes), is amended to read as follows:          (a)  The board has complete authority and power to:                (1)  administer the fund for the exclusive benefit of   the beneficiaries of the fund;                (2)   disburse benefits or otherwise order payments from   the fund;                (3)  independently control the fund; and                (4)  conduct all litigation on behalf of the fund.          SECTION 8.  Section 4.02, Chapter 1332 (S.B. 1568), Acts of   the 75th Legislature, Regular Session, 1997 (Article 6243q,   Vernon's Texas Civil Statutes), is amended by amending Subsections   (c), (d), and (e) and adding Subsections (d-1), (d-2), (d-3), and   (d-4) to read as follows:          (c)  Subject to Subsection (d-2) or (e) of this section, to   be eligible for health benefits under Section 5.01 of this Act, a   service retiree or disability retiree who retired or retires with   less than 360 months [ 30 years ] of service, or the retiree's   surviving spouse in the case of a deceased retiree, shall continue   to make monthly contributions in accordance with Subsections   [ Subsection ] (d) and (d-1) of this section to the fund after the   date of the retiree's retirement for the lesser of:                (1)  the period in full months preceding the date the   retiree becomes or would have become eligible for federal Medicare   coverage; or                (2)  the period equal to 360 months [ 30 years ] less the   retiree's months [ years ] of service achieved on the date of the   retiree's retirement.          (d)  The monthly [ pension fund shall deduct the ]   contribution amount required under Subsection (c) of this section   [ from the monthly retirement benefit payment or death benefit   payment paid to each retiree or retiree's spouse required to make   the contributions, excluding payments made by the pension fund   under Section 6.12 of the pension act.   The pension fund shall   deduct an amount equal to the retiree contribution amount   applicable to the fiscal year in which the benefit payment occurs.     The retiree contribution amount ] applicable to a fiscal year equals   an [ the ] amount obtained by:                (1)  multiplying the average member salary for the   preceding fiscal year by a percentage equal to 100 percent plus the   estimated percentage increase in the annual member payroll from the   preceding fiscal year to the fiscal year as determined by the   actuary;                (2)  multiplying the product computed under   Subdivision (1) of this subsection by the percentage applicable to   the fiscal year as provided by Subsection (b) of this section; and                (3)  dividing the product computed under Subdivision   (2) of this subsection by 12.           (d-1)     Monthly contributions under Subsection (c) of this   section shall be made on or before the last day of each month during   the period the contributions are required to be made, beginning on   the first month immediately following the month in which the   retiree retires. Any required contribution that is not made to the   fund on or before the due date shall bear interest at the default   rate in effect on the first day of the month in which the   contribution is due until the contribution is paid.           (d-2)     Instead of the monthly contributions required under   Subsection (c) of this section, a retiree, or the retiree's   surviving spouse in the case of a deceased retiree, may elect to pay   to the fund a lump-sum payment equal to the monthly retiree   contribution amount under Subsection (d) of this section in effect   on the date of the retiree's retirement multiplied by the lesser of:                 (1)  the number of full months in the period:                       (A)     beginning on the retiree's date of   retirement; and                       (B)     ending on the date the retiree will attain or   would have attained 65 years of age; or                   (2)     the number of full m [Text truncated for display. 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