TITLE 34. PUBLIC FINANCE

PART 4. EMPLOYEES RETIREMENT SYSTEM OF TEXAS

CHAPTER 63. BOARD OF TRUSTEES

34 TAC §63.17

The Employees Retirement System of Texas (ERS) proposes an amendment to 34 Texas Administrative Code (TAC) Chapter 63, concerning Board of Trustees, by amending §63.17, concerning Advisory Committees.

In June 2017, the Texas Sunset Advisory Commission (Sunset Commission) published its final Staff Report relating to the Sunset review of ERS. The Sunset Commission adopted all of the recommendations made in the Staff Report. Among these was Recommendation 2.2, titled "ERS should establish an advisory committee to obtain regular stakeholder and expert input on benefits." The recommendation was deemed a management action, and while no statutory changes were made, the ERS Board is still required to comply with the recommendation.

Section 63.17 (Advisory Committees) is proposed to be amended to add subsection (c). Similar to the rules governing existing advisory committees, subsection (c) is proposed to be added for the creation of the new Group Benefits Advisory Committee (GBAC) by the ERS Board of Trustees (Board) in accordance with the management recommendation of the Sunset Commission. Proposed §63.17(c) would allow the Board to determine the number of members on the GBAC, the qualifications for membership, and reporting and remuneration standards for the GBAC, if any.

Ms. Paula A. Jones, Deputy Executive Director and General Counsel, has determined that for the first five-year period the rule is in effect, there will be no fiscal implication for state or local government as a result of enforcing or administering the rule. To Ms. Jones' knowledge, there are no known anticipated economic costs to persons who are required to comply with the rule as proposed other than ERS' reimbursement of applicable and eligible expenses of committee members in the performance of their official committee responsibilities if authorized by the Board. And, to Ms. Jones' knowledge, small businesses or rural communities should not be affected by the rule.

Ms. Jones also determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule would be to provide the ERS Board and staff with additional advice and input in connection with ERS' management of employee benefits within the GBP, and to comply with the management recommendation of the Sunset Commission.

Comments on the proposed amendment may be submitted to Paula A. Jones, Deputy Executive Director and General Counsel, Employees Retirement System of Texas, P.O. Box 13207, Austin, Texas 78711-3207, or you may email Ms. Jones at paula.jones@ers.texas.gov. The deadline for receiving comments is November 20, 2017, at 10:00 a.m.

The amendment is proposed under the Texas Insurance Code, §1551.052, which authorizes the Board to adopt rules to implement group benefits, and Texas Government Code, §815.509, which authorizes the Board to establish advisory committees as it considers necessary.

No other statutes are affected by the proposed amendment.

§63.17.Advisory Committees.

(a) The Medical Board (Government Code, §815.204) is created pursuant to law. This committee will be composed of the number of people directed by law and will have the purposes, tasks, and reporting requirements established by law. Remuneration, if any, for committee members will be determined by the board. The committee will perform its tasks until abolished by the legislature.

(b) The Investment Advisory Committee (IAC) is created to consult with and advise the board on investments and investment related issues. The number of members on the IAC, the prerequisites for membership, the remuneration, if any, for IAC members and its reporting requirements will be determined by the board. The IAC will perform its tasks until abolished by the board.

(c) The Group Benefits Advisory Committee (GBAC) is created to advise the board on employee benefits administered by the board within the Texas Employees Group Benefits Program. The number of members on the GBAC, the prerequisites for membership, the remuneration, if any, for GBAC members and its reporting requirements will be determined by the board. The GBAC will perform its tasks until abolished by the board.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on October 4, 2017.

TRD-201703997

Paula A. Jones

Deputy Executive Director and General Counsel

Employees Retirement System of Texas

Earliest possible date of adoption: November 19, 2017

For further information, please call: (877) 275-4377


PART 5. TEXAS COUNTY AND DISTRICT RETIREMENT SYSTEM

CHAPTER 105. CREDITABLE SERVICE

34 TAC §105.9

The Texas County and District Retirement System ("TCDRS") proposes a new rule, §105.9, concerning notice by a participating subdivision of certain felony convictions of elected or appointed officers. TCDRS proposes the new rule to implement Senate Bill 500, 85th Legislature, 2017. The proposed rule prescribes the content of the written notice which is required to be filed by the participating subdivision.

Ann McGeehan, General Counsel of TCDRS, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule.

Ms. McGeehan has also determined that for each year of the first five years the rule is in effect, the public benefit anticipated as a result of enforcing this rule is to ensure prompt notice to the retirement system of certain felony convictions of certain participating members which will ensure compliance with the pension forfeiture provisions required under Government Code, §810.002 enacted by the 85th Legislature, 2017. There will be no costs to small businesses and there are no anticipated economic costs to persons who are required to comply with the proposed rule.

Comments on the proposed new rule may be submitted to Ann McGeehan, General Counsel, TCDRS, P.O. Box 2034, Austin, Texas 78768-2034, faxed to (512) 328-8887, or submitted electronically to legaldept@tcdrs.org.

The new rule is proposed under the Government Code, §845.102, which authorizes the TCDRS board of trustees to adopt rules for the efficient administration of the system and under Government Code, §810.002(j), which requires a public retirement system to adopt rules to implement §810.002.

No other statutes, articles, or codes are affected by this proposed new rule.

§105.9.Notice By Participating Subdivision of Certain Felony Convictions of Elected or Appointed Officers.

(a) A participating subdivision must provide written notice on a form prescribed by the Texas County and District Retirement System (the "system") of the conviction of any member of the system who was elected or appointed to a public office of the participating subdivision and who is convicted of a qualifying felony committed while in office and arising directly from the official duties of that office.

(b) "Qualifying felony" means any felony that is committed on or after June 6, 2017 involving one or more of the following:

(1) bribery;

(2) embezzlement, extortion, or other theft of public money;

(3) perjury;

(4) coercion of public servant or voter;

(5) tampering with governmental record;

(6) misuse of official information;

(7) conspiracy or the attempt to commit any of the offenses described in paragraphs (1) - (6) of this subsection; or

(8) abuse of official capacity.

(c) A participating subdivision must provide the notice required by subsection (a) of this section to the system no later than the 30th day after the conviction of the member.

(d) The notice should be on a form prescribed by the system and must:

(1) clearly state the convicted member's name, title of public office, date of conviction, court of jurisdiction, case number, qualifying felony violation, date of offense, and an explanation of the connection of the qualifying felony to the member's performance of his or her official duties;

(2) include a copy of the official conviction of the member entered by court, including the judge's affirmative finding of fact that the member is an elected or appointed holder of a public office of the participating subdivision who committed a qualifying felony while in office and in the course of performing official duties of the office; and

(3) if applicable, include a copy of the court's award of all or a portion of the member's service retirement annuity to the member's spouse pursuant to a just and right division upon the member's conviction or pursuant to a written agreement between the spouses entered into prior to the member's conviction as provided by Subchapter B, Family Code.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on October 6, 2017.

TRD-201704029

Ann McGeehan

General Counsel

Texas County and District Retirement System

Earliest possible date of adoption: November 19, 2017

For further information, please call: (512) 328-8889