Bill Text: TX HB3521 | 2025-2026 | 89th Legislature | Introduced

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Bill Title: Relating to the police officers' public retirement system of certain municipalities.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2025-04-28 - Left pending in committee [HB3521 Detail]

Download: Texas-2025-HB3521-Introduced.html

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89R3041 KFF-F
By: Harless H.B. No. 3521

A BILL TO BE ENTITLED
AN ACT
relating to the police officers' public retirement system of
certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2(4-a), (10), and (17-e), Article
6243g-4, Revised Statutes, are amended to read as follows:
(4-a) "Catastrophic injury":
(A) means a sudden, violent, life-threatening,
duty-related injury sustained by an active member that is due to an
externally caused motor vehicle collision, gunshot wound,
aggravated assault, or other physical external event or events and
results, as supported by evidence, in one of the following
conditions:
(i) [(A)] total, complete, and permanent
loss of sight in one or both eyes;
(ii) [(B)] total, complete, and permanent
loss of the body part [use] of one or both feet at or above the
ankle;
(iii) [(C)] total, complete, and permanent
loss of the body part [use] of one or both hands at or above the
wrist;
(iv) [(D)] injury to the spine that results
in a total, permanent, and complete paralysis of both arms, both
legs, or one arm and one leg; or
(v) [(E)] an externally caused physical
traumatic injury to the brain that, as determined using
evidence-based medicine, results in a permanent major
neurocognitive disorder for which the member requires occasional
supervision in the performance of routine daily tasks of self-care
and that renders the member permanently unemployable; and
(B) does not include the following diseases,
disorders, or injuries:
(i) infectious diseases;
(ii) noninfectious diseases, including
heart disease or lung disease, contracted as a result of repeated
exposure to occupational environmental conditions over a period of
months or years;
(iii) an anxiety disorder, including
post-traumatic stress disorder; or
(iv) a soft-tissue back, neck, or spine
injury, including a sprain, strain, subluxation, or repetitive
stress injury, that does not result in paralysis, as determined by a
physician chosen and compensated by the board [rendering the member
physically or mentally unable to perform the member's duties as a
police officer].
(10) "Employee" means an individual who holds a
classified or appointed position in the police department of a city
subject to this article.
(17-e) "Salary" means pay provided for the classified
or appointed position in the police department held by the
employee.
SECTION 2. Sections 3(d) and (f), Article 6243g-4, Revised
Statutes, are amended to read as follows:
(d) The terms of office of the board members elected as
described by Subsection (b)(3) of this section shall be three
years, beginning on January 1 and ending on December 31. Beginning
in 1999, and each third succeeding year, one board member shall be
elected at an election called by the board and held before the end
of the calendar year [in December]. Beginning in 2000, and each
third succeeding year, a second board member shall be elected at an
election called by the board and held before the end of the calendar
year [in December]. If a vacancy occurs among the two elected
retired members of the board, the board shall hold an election
within 60 days after the date the vacancy occurred. At that
election, a retired member shall be elected to serve for the
remainder of the term of the vacant position or for a full term if
the term of the board member that caused the vacancy would have
ended in that year. A board member who is a retired member and who
was appointed to the board before January 1999 shall serve the
remainder of the board member's term. On expiration of the
appointed term, the appointed board member is eligible to run for
the board position described by Subsection (b)(3) of this section
in the same manner as any other retired member.
(f) The following individuals are prohibited from being
elected to or otherwise serving on the board:
(A) an [An] individual who is an elected or
appointed member [officer] or employee of, or who receives
compensation or gifts directly or indirectly from, any employee
[organization] or retiree organization;
(B) an individual who is [or] an employee of the
pension system or was an employee of the pension system during the
60-day period preceding the announcement of the trustee election;
or
(C) an individual who holds a position that
creates or may have the potential to create a conflict of interest
with the fiduciary responsibility imposed on each member of [is
prohibited from being elected to] the board, as determined by
[appointed to] the board[, or in any other way serving as a member
of the board].
SECTION 3. Section 4, Article 6243g-4, Revised Statutes, is
amended by amending Subsection (b) and adding Subsection (c) to
read as follows:
(b) The board, by an affirmative vote of at least four board
members, may elect to provide a stipend to [reimburse] board
members who are not employees of the city for their time while
attending to official business of the pension system. The amount of
any stipend [reimbursement] may not exceed $750 a month for each
affected board member.
(c) Board members are entitled to reimbursement for actual
expenses incurred in performing official duties and business, as
determined by board rule.
SECTION 4. Section 12, Article 6243g-4, Revised Statutes,
is amended by amending Subsections (b) and (m) and adding
Subsection (n) to read as follows:
(b) Except as otherwise provided by this section, including
Subsection (b-3) of this section, the monthly service pension of a
member who:
(1) is hired before October 9, 2004, including a
member hired before October 9, 2004, who involuntarily separated
from service but has been retroactively reinstated under
arbitration, civil service, or a court ruling, is equal to the sum
of:
(A) 2.75 percent of the member's final average
pay multiplied by the member's years or partial years of service for
the member's first 20 years of service; and
(B) two percent of the member's final average pay
multiplied by the member's years or partial years of service for the
member's years of service in excess of the 20 years of service
described by Paragraph (A) of this subdivision; or
(2) except as provided by Subdivision (1) of this
subsection and subject to Subsection (b-3) of this section, is
hired or rehired as an active member on or after October 9, 2004, is
equal to [the sum of]:
(A) for members with less than 20 years of
service, 2.25 percent of the member's final average pay multiplied
by the member's years or partial years of service [for the member's
first 20 years of service]; or
(B) for members with at least 20 years of
service, the sum of:
(i) 2.75 percent of the member's final
average pay multiplied by the members first 20 years of service; and
(ii) [(B)] two percent of the member's
final average pay multiplied by the member's years or partial years
of service in excess of 20 years of service described by
Subparagraph (i) [Paragraph (A)] of this paragraph [subdivision].
(m) For a member who is promoted or appointed to a position
above the rank of commander or a similar position that is the
highest classified or non-appointed position in the police
department:
(1) before the year 2017 effective date, the member's
monthly service pension and member contributions shall be based on
the member's initial pay for that position, regardless of
subsequent promotions or appointments; and
(2) [captain] on or after the year 2017 effective
date, the member's monthly service pension and member contributions
shall be based on, as determined by the board:
(A) [(1)] the member's pay for the position the
member held immediately before being promoted or appointed; or
(B) [(2)] the pay of the highest civil rank for
classified police officers for those members who have no prior
service with the city, which pay must be calculated based on the
three-year average prior to retirement.
(n) Except as provided by Subsection (m)(1) of this section,
a member's monthly service pension and contributions may not be
based on final average pay and contributions that exceed the salary
and contributions made by a member who:
(1) achieves the position of commander or a similar
position that is the highest classified or non-appointed position
in the police department; and
(2) retires or elects to participate in DROP on or
after the year 2017 effective date.
SECTION 5. Sections 14(b), (e), and (i), Article 6243g-4,
Revised Statutes, are amended to read as follows:
(b) An active member who [was hired before October 9, 2004,
including a member hired before October 9, 2004, who] has attained
normal retirement age [been reinstated under arbitration, civil
service, or a court ruling after that date, and has at least 20
years of service with the police department] may file with the
pension system an election to participate in DROP and receive a DROP
benefit instead of the standard form of pension provided by this
article on or after [as of] the date the active member attained
normal retirement age [20 years of service]. The election may be
made, under procedures established by the board, by an eligible
active member who has attained the required years of service. A
DROP election that is made and accepted by the board may not be
revoked.
(e) As of the end of each month an amount is credited to each
active member's notional DROP account at the rate of one-twelfth of
a hypothetical earnings rate on amounts in the account. The
hypothetical earnings rate is determined for each calendar year
based on the compounded average of the aggregate annual rate of
return on investments of the pension system for the five
consecutive fiscal years ending June 30 preceding the calendar year
to which the earnings rate applies, multiplied by:
(1) except as provided by Subdivision (2) of this
subsection, 65 percent; or
(2) once the funded ratio is equal to or greater than
95 percent and regardless of the funded ratio in subsequent years,
70 percent. [The hypothetical earnings rate may not be less than
2.5 percent.]
(i) A retired member who has not attained the applicable age
required under the code to make a minimum distribution [70-1/2],
whether or not a DROP participant before retirement, may elect to
have part or all of an amount equal to the monthly service pension
the retired member would otherwise be entitled to receive, less any
amount required to pay the retired member's share of group medical
insurance costs, credited to a DROP account, in which case the
amounts will become eligible to be credited with hypothetical
earnings in the same manner as the amounts described by Subsection
(g) of this section. On and after the year 2017 effective date,
additional amounts may not be credited to a DROP account under this
subsection. Any amounts credited under this subsection before the
year 2017 effective date shall remain accrued in a retired member's
DROP account.
SECTION 6. Section 14(k), Article 6243g-4, Revised
Statutes, is redesignated as Section 14A, Article 6243g-4, Revised
Statutes, and amended to read as follows:
Sec. 14A. RESUMPTION OF SERVICE BY DROP PARTICIPANTS. (a)
This section applies only to [(k) If] a retired member and [who is
a] DROP participant who is rehired by [as an employee of] the police
department in a classified or appointed position.
(b) The pension system shall, during the period of
subsequent service by a member subject to this section:
(1) in accordance with Section 17(f) of this article,
reinstate the member as an active member of the pension system;
(2) suspend the member's monthly service [, any]
pension and any [or] DROP distribution that was being paid to the
member; and
(3) except as provided by Subsection (c)(2)(B) of this
section, credit to the member's DROP account a [shall be suspended
and the] monthly amount equal to the member's monthly service
pension determined as if the member had remained separated from
service [described by Subsection (d) of this section will again
begin to be credited to the DROP account while the member continues
to be an employee]. [If the member's DROP account has been
completely distributed, a new notional account may not be created
and the monthly amount described by Subsection (d) of this section
may not be credited to a DROP account on behalf of the member.]
(c) During the period of a member's subsequent service:
(1) in accordance with Section 9 of this article, the
city shall make employer contributions attributable to the member's
subsequent service; and
(2) the member:
(A) in accordance with Section 8 of this article,
shall make member contributions; and
(B) may not:
(i) receive any annual adjustments under
Section 12(c) of this article;
(ii) accrue additional years of service or
establish additional service credit; and
(iii) in accordance with Section 14 of this
article, receive a distribution of the member's DROP account.
(d) Once the member again separates from service, payment of
the member's monthly service pension shall resume, including
application of annual adjustments under Section 12(c) of this
article. The member's monthly service pension may not be adjusted
to reflect years of service, service credit, or pay for the member's
subsequent period of service.
(e) A member is not eligible for a refund of the member
contributions made during the member's subsequent period of
service.
SECTION 7. Section 15, Article 6243g-4, Revised Statutes,
is amended by amending Subsections (a), (b), (d), (e), and (i) and
adding Subsections (d-1), (d-2), (d-3), (d-4), and (i-1) to read as
follows:
(a) An active member who becomes totally and permanently
incapacitated for the performance of the member's duties as a
result of a bodily injury received in, or illness caused by, the
performance of those duties shall, on presentation to the board's
satisfaction [board] of proof of total and permanent incapacity, be
retired and shall receive an immediate duty-connected disability
pension equal to:
(1) for members hired or rehired before October 9,
2004, the greater of 55 percent of the member's final average pay at
the time of retirement or the member's accrued service pension; or
(2) for members hired or rehired on or after October 9,
2004, the greater of 45 percent of the member's:
(A) final average pay at the time of retirement;
or
(B) accrued service pension.
(b) A member who becomes totally and permanently
incapacitated for the performance of the member's duties and is not
eligible for either an immediate service pension or a
duty-connected disability pension is eligible for an immediate
monthly pension computed in the same manner as a service retirement
pension but based on final average pay and service accrued to the
date of the disability. The pension under this subsection may not
be less than[:
[(1) for members hired before October 9, 2004,
including a member who involuntarily separated from service but has
been retroactively reinstated under arbitration, civil service, or
a court ruling,] 27.5 percent of the member's final average pay[; or
[(2) except as provided by Subdivision (1) of this
subsection, for members hired or rehired on or after October 9,
2004, 22.5 percent of the member's final average pay].
(d) Except as provided by Subsection (d-1) of this section,
a [A] person may not receive a disability pension unless the person
files with the board an application for a disability pension not
later than the later of:
(1) 180 days after the date of separation from
service; or
(2) the 18th month after the date the injury or illness
described by Subsection (a) of this section occurs or began, as
applicable.
(d-1) The board may accept an application filed after the
deadline prescribed by Subsection (d) of this section on a showing
of good cause, as determined by the board.
(d-2) On filing and acceptance by the board of an
application for a disability pension, [at which time] the board
shall have the person examined, not later than the 90th day after
the date the member files the application, by a physician or
physicians chosen and compensated by the board. The physician
shall make a report and recommendations to the board regarding,
based on reasonable medical probability:
(1) the extent of any disability; and
(2) whether any disability that is diagnosed is a
duty-connected disability.
(d-3) A [Except as provided by Subsection (j) of this
section, a] person may not receive a disability pension for an
injury received or illness incurred after separation from service.
(d-4) In accordance with Section 6(g) of this article, the
board may, through its presiding officer, issue process, administer
oaths, examine witnesses, and compel witnesses to testify as to any
matter affecting retirement, disability, or death benefits under
any pension plan within the pension system.
(e) A retired member who has been retired for disability is
subject at all times to reexamination by a physician chosen and
compensated by the board and shall submit to further examination as
the board may require. If a retired member refuses to submit to an
examination, the board shall order the payments stopped. If a
retired member who has been receiving a disability pension under
this section recovers so that in the opinion of the board the
retired member is able to perform the usual and customary duties
formerly performed for the police department, or if a [and the]
retired member is reinstated or offered reinstatement to the
position, or hired by another law enforcement agency to a
comparable position, the board shall order the member's disability
pension stopped. A member may apply for a normal pension benefit,
if eligible, if the member's disability benefit payments are
stopped by the board under this subsection.
(i) Except as provided by Subsection (i-1) of this section,
[Effective for payments that become due after April 30, 2000, and]
instead of the disability benefit provided by Subsection (a) or (b)
of this section, a member who suffers a catastrophic injury shall
receive a monthly benefit equal to 90 [100] percent of the member's
final average pay determined as of the date of retirement, and the
member's DROP balance, if any.
(i-1) A member who attains normal retirement age is not
eligible to receive a disability pension under Subsection (i) of
this section.
SECTION 8. Article 6243g-4, Revised Statutes, is amended by
adding Section 15A to read as follows:
Sec. 15A. REDUCTION OF DISABILITY BENEFITS. (a) The board
shall require any member who is receiving a disability pension to
provide the board annually, on or before July 1 of each year, with a
true and complete copy of those portions of the person's federal
and, if applicable, state tax return, including appropriate
schedules, for the previous calendar year that indicate the
person's occupations, if any, and earned income for the previous
calendar year. If the member did not file a tax return for the
previous calendar year, the board may require other documentation
reflecting the member's occupation or earned income that the board
determines appropriate.
(b) The pension system may grant an extension of the July 1
date under Subsection (a) of this section to a date later in the
same calendar year if the member provides the board with a true and
complete copy of a grant of the extension of time for filing the
person's tax return from the appropriate governmental entity or a
true and complete copy of an extension request that results in an
automatic extension.
(c) If, after evaluating the information received under
this section, the board finds the member is or has been receiving
earned income from one or more employments, including
self-employment, during the preceding year, the board shall reduce
future disability pension payments to the member by the amount of $1
for each month for each $2 of income earned by the member from the
other employment during each month of the previous year, except
that the disability pension payment may not be decreased below the
amount determined for a monthly service pension under Section 12 of
this article.
(d) If a retired member who has been receiving a disability
pension for a catastrophic injury recovers such that in the opinion
of the board the member no longer has a catastrophic injury, the
board shall reclassify the benefit as a duty-connected disability
pension in accordance with Section 15(a) of this article.
SECTION 9. Section 16(i), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(i) If a member or individual receiving a survivor's pension
dies before monthly payments have been made for at least five years,
leaving no person otherwise eligible to receive further monthly
payments with respect to the member, the monthly payments shall
continue to be made in the same amount as the last monthly payment
made to the member or survivor until payments have been made for
five years with respect to the member. The payments shall be made
to the spouse of the member, if living, and if no spouse is living,
to the natural or adopted children of the member, to be divided
equally among the children if the member has more than one child.
If the member has no spouse or children who are living, the benefit
may not be paid. If the member dies after becoming eligible to
receive benefits but before payments begin, leaving no survivors
eligible for benefits, the amount of each monthly payment over the
five-year period shall be the same as the monthly payment the member
would have received if the member had taken disability retirement
on the date of the member's death and shall be paid to the member's
spouse or children in the manner provided by this subsection. If
the member has no spouse or children who are living, then the
benefit may not be paid. The member's estate or a beneficiary who
is not a survivor or dependent is not eligible to receive the
payment described by Subsection (g) of this section and the final
monthly payment owed but not received before the member's or
surviving spouse's death.
SECTION 10. Section 17(b), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(b) A member of the pension system who has not completed 20
years of service at the time of separation from service with the
police department is eligible for a refund of the total of the
contributions the member made to the pension system[, plus any
amount that was contributed for the member by the city and not
applied in accordance with this section to provide the member with
10 years of service]. The refund does not include interest, and
neither the city nor the member is eligible for a refund of the
contributions the city made on the member's behalf, except as
expressly provided by this subsection. By receiving the refund,
the member forfeits any service earned before separation from
service, even if it is otherwise nonforfeitable.
SECTION 11. The heading to Section 19, Article 6243g-4,
Revised Statutes, is amended to read as follows:
Sec. 19. PERSONS REJOINING OR TRANSFERRED BY CITY; SERVICE
CREDIT; DOUBLE BENEFITS[; RETURN TO SERVICE].
SECTION 12. Section 21(b), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(b) The city, not later than the 14th day after the date the
city receives a request by or on behalf of the board, shall, unless
otherwise prohibited by law, supply the pension system with
personnel, payroll, and financial records in the city's possession
that the pension system determines necessary to provide pension
administrative and fiduciary services under this section, to
establish beneficiaries' eligibility for any benefit, or to
determine a member's credited service or the amount of any
benefits, including disability benefits, and such other
information the pension system may need, including:
(1) information needed to verify service, including
the following information:
(A) the date a person is sworn in to a position;
(B) the days a person is under suspension;
(C) the days a person is absent without pay,
including the days a person is on maternity leave;
(D) the date of a person's termination from
employment; and
(E) the date of a person's reemployment with the
city;
(2) medical records;
(3) workers' compensation records and pay information;
(4) payroll information;
(5) information needed to verify whether a member is
on military leave; [and]
(6) information regarding phase-down participants,
including information related to entry date and phase-down plan;
and
(7) personnel files, including any disciplinary
action taken against a person and the result of any appeal of the
disciplinary action.
SECTION 13. Section 25(g), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(g) Distribution of benefits must begin not later than April
1 of the year following the calendar year during which the member
eligible for the benefits becomes the applicable [70-1/2 years of]
age under the code to make a minimum distribution or terminates
employment with the employer, whichever is later, and must
otherwise conform to Section 401(a)(9) of the code.
SECTION 14. Section 30(b), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(b) After the member described by Subsection (a) of this
section is finally convicted, the member's survivors, including
their representatives, [spouse] may apply for benefits if the
member, but for application of Subsection (a) of this section,
would have been eligible for a pension benefit or a delayed payment
of benefits. If the member would not have been eligible for a
pension benefit or a delayed payment of benefits, the member's
survivors, including their representatives, [spouse] may apply for
a refund of the member's contributions. A refund under this
subsection does not include interest and does not include
contributions the city made on the member's behalf. The city may
not receive a refund of any contributions the city made on the
member's behalf.
SECTION 15. The following provisions of Article 6243g-4,
Revised Statutes, are repealed:
(1) Section 12(k);
(2) Section 13;
(3) Section 16(j);
(4) Section 17(i); and
(5) Section 19(f).
SECTION 16. Sections 12(b) and 17(b), Article 6243g-4,
Revised Statutes, as amended by this Act, apply only to a member who
retires on or after the effective date of this Act. A member who
retires before the effective date of this Act is governed by the law
in effect immediately before that date, and the former law is
continued in effect for that purpose.
SECTION 17. Section 13, Article 6243g-4, Revised Statutes,
as repealed by this Act, and Section 14A, Article 6243g-4, Revised
Statutes, as added by this Act, apply only to a retired member who
resumes service with the police department on or after the
effective date of this Act. A person who resumes service with the
police department before the effective date of this Act is governed
by the law in effect immediately before that date, and the former
law is continued in effect for that purpose.
SECTION 18. Section 15(i), Article 6243g-4, Revised
Statutes, as amended by this Act, and Section 15(i-1), Article
6243g-4, Revised Statutes, as added by this Act, apply only to a
disability pension granted after June 1, 2025. A disability
pension granted on or before June 1, 2025, is governed by the law in
effect immediately before the effective date of this Act, and the
former law is continued in effect for that purpose.
SECTION 19. Section 15A, Article 6243g-4, Revised Statutes,
as added by this Act, applies only to a member who is granted a
disability pension after July 1, 2025. A member who is granted a
disability pension on or before July 1, 2025, is governed by the law
in effect immediately before the effective date of this Act, and the
former law is continued in effect for that purpose.
SECTION 20. The changes in law made by this Act do not
affect any nonconflicting provisions of an agreement entered into
in accordance with Section 27, Article 6243g-4, Revised Statutes,
and those provisions remain in full force and effect.
SECTION 21. If this Act conflicts with another Act of the
89th Legislature, Regular Session, 2025, this Act controls unless
the conflict is expressly resolved by the legislature by reference
to this Act.
SECTION 22. This Act takes effect July 1, 2025, if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for effect on that
date, this Act takes effect September 1, 2025.