TITLE 34. PUBLIC FINANCE

PART 1. COMPTROLLER OF PUBLIC ACCOUNTS

CHAPTER 1. CENTRAL ADMINISTRATION

SUBCHAPTER G. GIFT ACCEPTANCE

The Comptroller of Public Accounts adopts new §1.400 concerning gift acceptance policy and procedures, without changes to the proposed text as published in the August 29, 2025, issue of the Texas Register (50 TexReg 5591). The rule will not be republished.

The new section will be located in Chapter 1, new Subchapter G, titled "Gift Acceptance".

Subsection (a) outlines certain definitions regarding gift acceptance.

Subsection (b) describes the authority of the agency to solicit or accept gifts.

Subsection (c) outlines the criteria the agency will use to determine whether to refuse a gift. The agency will refuse gifts to the agency from any person who is: currently a party in a contested case with the agency until at least 30 days have passed since the date of the final order; currently a party in litigation with the agency until at least 30 days have passed since the date of the final order; currently indebted to the state or owes delinquent taxes to the state based on the records of the agency; currently under investigation by the agency's Criminal Investigations Division; currently in default on a guaranteed student loan based on the records of the agency; currently indebted to the state for past due child support based on Attorney General records provided to the agency; a foreign (non-U.S.) business entity that is not licensed to do business in Texas; or a foreign adversary.

Subsection (d) outlines a procedure in which prospective donors may provide advance notice to the agency of their intent to make a gift, so that the prospective donor can be screened for potential conflicts of interest.

Subsection (e) describes the review procedures the agency will use to determine if the gift is consistent with applicable law, agency policies, and the agency's gift acceptance rule.

Subsection (f) sets forth gift acceptance procedures.

Subsection (g) outlines steps the agency will take if the agency refuses to accept a gift.

Subsection (h) allows the agency to deposit a donation of money into a suspense account, pending completion of the review.

Subsection (i) prescribes the process and notice requirements for using a refused gift to offset certain indebtedness owed to the state by the donor.

Subsection (j) specifies that for gifts valued at $500 or more, the agency will keep certain records regarding the gift and the donor.

Subsection (k) specifies that gifts will be used for public purposes, will not be used for the monetary enrichment of any agency employee, and donors may not direct the use or investment of the gift.

Subsection (l) addresses the donation of services to the agency.

Subsection (m) provides that this section does not address acceptance of gifts by individual employees. Gift acceptance by individual employees and the restrictions on such acceptance, are governed by Government Code, Chapter, 572 (Standards of Conduct); Penal Code, Chapter 36 (Prohibited Gifts); Penal Code, Chapter 39 (Misuse of State Resources); and the agency's ethics policies.

The comptroller did not receive any comments regarding adoption of the amendment.

The new section is adopted under Government Code, §403.011(b), which authorizes the comptroller to solicit, accept or refuse gifts to the state; Government Code, Chapter 575, which governs acceptance of gifts by state agencies; and Government Code, §2255.001, which requires a state agency to adopt rules regarding the relationship between private donors and the agency and its employees.

The new section implements the Government Code, §403.011(b).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504502

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Effective date: December 30, 2025

Proposal publication date: August 29, 2025

For further information, please call: (512) 475-2220

CHAPTER 6. INVESTMENT MANAGEMENT

SUBCHAPTER B. STANDARDS FOR MEMBERS OF THE COMPTROLLER'S INVESTMENT ADVISORY BOARD

The Comptroller of Public Accounts adopts new §6.10, concerning definitions; §6.11, concerning advisory capacity; §6.12, concerning advisory board member duties; §6.13, concerning advisory board composition; §6.14, concerning compensation and expenses; §6.15, concerning disclosures and annual affirmation of compliance; §6.16, concerning term of office; and §6.17, concerning charter and policies; and §6.18, concerning removal of advisory board members, without changes to the proposed text as published in the August 22, 2025, issue of the Texas Register (50 TexReg 5429). The rules will not be republished. The new rules will be located in Texas Administrative Code, Title 34, Part 1, Chapter 6 (Investment Management), new Subchapter B (Standards for Members of the Comptroller's Investment Advisory Board).

These new sections address the standards for the members of the Comptroller's Investment Advisory Board, including disclosure requirements applicable to advisory board members.

Section 6.10 provides definitions.

Section 6.11 acknowledges the advisory nature of the role of the members of the advisory board.

Section 6.12 lists the advisory board member duties and responsibilities.

Section 6.13 provides the advisory board composition.

Section 6.14 addresses compensation and expense reimbursement for advisory board members.

Section 6.15 provides the advisory board member ethics disclosure requirements and related annual affirmation requirements.

Section 6.16 sets the term of office for advisory board members.

Section 6.17 provides the requirement for the trust company to create an advisory board charter and related policies and to provide such information to the advisory board members.

Section 6.18 provides standards for the removal of advisory board members for cause.

The comptroller received no comments on the proposed rules.

The new sections are adopted under Government Code, §404.028(c), which authorizes the comptroller to adopt rules governing members of the comptroller's investment advisory board.

The new sections implement Government Code, §404.028 concerning the comptroller's investment advisory board.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504503

Victoria North

General Counsel for Fiscal and Agency Affairs

Comptroller of Public Accounts

Effective date: December 30, 2025

Proposal publication date: August 22, 2025

For further information, please call: (512) 475-2220

PART 3. TEACHER RETIREMENT SYSTEM OF TEXAS

CHAPTER 25. MEMBERSHIP CREDIT

SUBCHAPTER B. COMPENSATION

The Teacher Retirement System of Texas (TRS) adopts amendments to §25.21, relating to Compensation Subject to Deposit and Credit, under Subchapter B (relating to Compensation) of Chapter 25 in Part 3 of Title 34 of the Texas Administrative Code without changes to the text as proposed in the October 24, 2025 issue of the Texas Register (50 TexReg 6994). The rule will not be republished.

REASONED JUSTIFICATION

TRS amends §25.21 in order to conform with legislation passed during the regular session of the 89th Legislature. Specifically, House Bill 2 (HB 2) amended Government Code §822.201 to provide that any increased compensation paid to an employee by a school district using funds received by the district from the teacher retention allotment (TRA) or support staff retention allotment (SSRA) is creditable compensation. HB 2 added these allotments to the Education Code to provide compensation increases for classroom teachers and other employees. In addition, HB 2 amended Section 822.201 to ensure that regardless of how these increases are distributed to teachers and other employees, the increases would qualify as creditable compensation for the purpose of TRS reporting. Based on these changes, TRS amends §25.21 to similarly provide that any compensation paid by a school district to an employee from the TRA or SSRA is creditable compensation.

COMMENTS

No comments on the proposed adoption of the amendments were received.

STATUTORY AUTHORITY

Amended §25.21 is adopted under the authority of Section 1.09 of House Bill 2, 89th Legislature, Regular Session; Government Code § 822.201, which provides that increased compensation paid to an employe by a school district using funds received by the district under the teacher retention allotment under Section 48.158, Education Code or support staff retention allotment under Section 48.1581, Education Code qualifies as "salary and wages" for TRS purposes and is, therefore, subject to deposit and credit by TRS; and Government Code §825.102, which authorizes the board of trustees to adopt rules for administration of the funds of the retirement system and eligibility for membership.

CROSS-REFERENCE TO STATUTE

Amended §25.21 affects the following statutes: Government Code §822.201, relating to member compensation.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504511

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: December 30, 2025

Proposal publication date: October 24, 2025

For further information, please call: (512) 542-6506

CHAPTER 27. TERMINATION OF MEMBERSHIP AND REFUNDS

The Teacher Retirement System of Texas (TRS) adopts amendments to §27.6 (relating to Reinstatement of an Account) of Chapter 27 in Part 3 of Title 34 of the Texas Administrative Code without changes to the text as proposed in the October 17, 2025 issue of the Texas Register (50 TexReg 6860). The rule will not be republished.

REASONED JUSTIFICATION

In TRS' adopted four-year rule review published in the August 12, 2022 issue of the Texas Register (47 TexReg 4859), TRS identified §27.6 as a rule for future amendment. Based on that review, TRS adopts amendments to this rule.

The amendments to §27.6 remove reference to purchasing withdrawn service at the previous reinstatement fee rate of 6% per year since the member's service was withdrawn. The opportunity to purchase at this fee rate expired in 2013.

COMMENTS

TRS did not receive comments on the proposed adoption of the amendments.

STATUTORY AUTHORITY

The amended rule is adopted under the authority of Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board and Government Code §823.501, which establishes fees and requirements for a member to reinstate withdrawn service credit.

CROSS-REFERENCE TO STATUTE

The amended rule implements the following statutes: Government Code §823.501, establishes fees and requirements for a member to reinstate withdrawn service credit.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504514

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: December 30, 2025

Proposal publication date: October 17, 2025

For further information, please call: (512) 542-6506

CHAPTER 29. BENEFITS

The Teacher Retirement System of Texas (TRS) adopts amendments to §29.9 (relating to Survivor Benefits) of Chapter 29, Subchapter A, in Title 34, Part 3, of the Texas Administrative Code and §29.56 (relating to Minimum Distribution Requirements) of Chapter 29, Subchapter D, in Title 34, Part 3, of the Texas Administrative Code without changes to the text as proposed in the October 17, 2025 issue of the Texas Register (50 TexReg 6861). The rules will not be republished.

REASONED JUSTIFICATION

In TRS' adopted four-year rule review published in the August 12, 2022 issue of the Texas Register (47 TexReg 4859), TRS identified §29.9 and §29.56 as rules for future amendment. Based on that review, TRS now amends these rules.

The adopted amendments to §29.9 simply clarify that the beneficiary designated to receive survivor benefits by a retiree is the beneficiary eligible to receive benefits payable under Government Code §824.501.

The adopted amendments to §29.56 update the rule to conform with federal law, primarily the changes made in the Secure Act and Secure Act 2.0 that were passed by Congress in 2019 and 2022, respectfully. The primary change from both pieces of legislation that is being implemented here was to increase the age that retired participants must begin receiving required minimum distributions. Under the Secure Act, the age increases from age 70 1/2 to age 72 for participants born after Jan. 1, 1949 and before Jan. 1, 1951. Secure Act 2.0 increases the age from 72 to age 73 for participants that were born after Jan. 1, 1951 and before Jan. 1, 1960 and increases from 73 to 75 for plan participants that were born on or after Jan. 1, 1960. The amendments to §29.56 also include other minor updates and nonsubstantive changes to terminology and citations in the rule.

COMMENTS

TRS did not receive comments on the proposed adoption of the amendments.

SUBCHAPTER A. RETIREMENT

STATUTORY AUTHORITY

The amendments to §29.9 are adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board; and Government Code §824.101, which provides requirements relating to the designation of beneficiaries in the TRS retirement system and provides that TRS may adopt rules to administer that section.

CROSS-REFERENCE TO STATUTE

The amendments to §29.9 implement Subchapter B (concerning Beneficiaries) of Chapter 824 of the Government Code.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504515

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: December 30, 2025

Proposal publication date: October 17, 2025

For further information, please call: (512) 542-6506

SUBCHAPTER D. PLAN LIMITATIONS

STATUTORY AUTHORITY

The amendments are adopted under the authority of Government Code §825.102 which authorizes the TRS Board of Trustees to adopt rules for the eligibility for membership, the administration of the funds of the retirement system, and the transaction of business of the board, and Government Code §825.506, which provides that TRS' pension plan shall be administered as a qualified plan under §401(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 401); that TRS shall administer the plan in a manner that satisfies the required minimum distribution provisions of Section 401(a)(9), Internal Revenue Code of 1986; and that TRS may adopt rules to administer these requirements.

CROSS-REFERENCE TO STATUTE

The amendments implement §825.506, Texas Government Code (relating to Plan Qualification).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504516

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: December 30, 2025

Proposal publication date: October 17, 2025

For further information, please call: (512) 542-6506

CHAPTER 31. EMPLOYMENT AFTER RETIREMENT

SUBCHAPTER A. GENERAL PROVISIONS AND PROCEDURES

The Teacher Retirement System of Texas (TRS) adopts amendments to §31.3 (relating to Return-to-Work Employer Pension Surcharge) under Subchapter A (relating to General Provisions and Procedures) of Chapter 31 in Part 3 of Title 34 of the Texas Administrative Code without changes to the text as proposed in the October 24, 2025 issue of the Texas Register (50 TexReg 6997). The rule will not be republished.

REASONED JUSTIFICATION

TRS amends §31.3 to conform with legislation passed during the regular session of the 89th Legislature. Specifically, House Bill 2 (HB 2) repealed Government Code §825.4092(f). This subsection was originally added in 2021 by Senate Bill 202 (SB 202). Subsection 825.4092(f), as added by SB 202, prohibited TRS employers from directly or indirectly passing on the cost of pension or health care surcharges to TRS retirees they employ. To implement SB 202, TRS added this "pass-through prohibition" to §31.3 and §41.4 (relating to Employer Health Benefit Surcharge), which is also amended elsewhere in this issue of the Texas Register. Because HB 2 repealed Subsection 824.4092(f), TRS amends §31.3 to remove this provision from §31.3(e) as well.

COMMENTS

TRS received no comments on the proposed adoption of these amendments.

STATUTORY AUTHORITY

The amended rule is adopted under the authority of Section 2.20(c) of House Bill 2, 89th Legislature, Regular Session; Government Code §824.604, which provides that board of trustees may adopt rules to administer laws under Subchapter G of Chapter 824 of the Government Code; Government Code §825.4092, which relates to employer contributions for employed retirees; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.

CROSS-REFERENCE TO STATUTE

The amended rule affects the following statute: Government Code §825.4092, which relates to employer contributions for employed retirees.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504512

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: December 30, 2025

Proposal publication date: October 24, 2025

For further information, please call: (512) 542-6506

CHAPTER 41. HEALTH CARE AND INSURANCE PROGRAMS

SUBCHAPTER A. RETIREE HEALTH CARE BENEFITS (TRS-CARE)

The Teacher Retirement System of Texas (TRS) adopts amendments to §41.4, relating to Employer Health Benefit Surcharge, under Subchapter A (relating to Retiree Health Care Benefits (TRS-CARE)) of Chapter 41 in Part 3 of Title 34 of the Texas Administrative Code without changes to the text proposed in the October 24, 2025 issue of the Texas Register (50 TexReg 6998). The rule will not be republished.

REASONED JUSTIFICATION

TRS amends §41.4 to conform with legislation passed during the regular session of the 89th Legislature. Specifically, House Bill 2 (HB 2) repealed Government Code §825.4092(f). This subsection was originally added in 2021 by Senate Bill 202 (SB 202). Subsection 825.4092(f), as added by SB 202, prohibited TRS employers from directly or indirectly passing on the cost of pension or health care surcharges to TRS retirees they employ. To implement SB 202, TRS added this "pass-through prohibition" to §41.4 and to §31.3 (relating to Return-to-Work Employer Pension Surcharge), which is also amended elsewhere in this issue of the Texas Register. Because HB 2 repealed Subsection 824.4092(f), TRS amends §41.4 to remove this provision from §41.4(i) as well.

COMMENTS

TRS did not receive comments on the proposed adoption of the amendments.

STATUTORY AUTHORITY

Amended §41.4 is adopted under the authority of Section 2.20(c) of House Bill 2, 89th Legislature, Regular Session; Government Code §824.604, which provides that board of trustees may adopt rules to administer laws under Subchapter G of Chapter 824 of the Government Code; Government Code §825.4092, which relates to employer contributions for employed retirees; and Government Code §825.102, which authorizes the board of trustees to adopt rules for the transaction of the business of the board.

CROSS-REFERENCE TO STATUTE

Amended §41.4 affects the following statutes: Government Code §825.4092, relating to employer contributions for employed retirees.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 10, 2025.

TRD-202504513

Don Green

Chief Financial Officer

Teacher Retirement System of Texas

Effective date: December 30, 2025

Proposal publication date: October 24, 2025

For further information, please call: (512) 542-6506