The Senate Committee on State Affairs met on March 25th to take up a number of bills. This report covers only SB 322 (Huffman), SB 957 (Bettencourt), SB 1337 (Huffman), SB 2224 (Huffman), SCR 5 (Huffman), and SJR 27 (Huffman).
This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing, but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
SB 1337 (Huffman) Relating to credit in, benefits from, and administration of the Texas Municipal Retirement System.
- Committee substitute laid out.
- Huffman – SB 1337 is a simple clean-up bill to aimed at increasing operational efficiency and updating outdated language in TMRS governing statutes.
- Committee substitute makes technical clean up changes that were requested by PRB.
Bill left pending.
SB 322 (Huffman) Relating to the evaluation and reporting of investment practices and performance of certain public retirement systems.
- Committee substitute laid out.
- Huffman – SB 322 specifically addresses issues brought up by PRB. The bill requires that a public retirement system have an independent firm review its investments and performance. A system must conduct an evaluation at its own expense once every three years if total assets were at least $100 million; or once every six years if total assets were at least $30 million and less than $100 million. Bill requires the governing body to submit the report to PRB no later than the 31st day after the date they receive a report of an evaluation.
- Committee substitute makes changes recommended by PRB. Includes Nelson Amendment to address fiscal implications.
David Stacy, TEXPERS
- On the bill.
- Concerned about ambiguity in bill language, willing to work with the representative to clarify these issues.
Bill left pending.
SB 2224 (Huffman) Relating to requiring a public retirement system to adopt a written funding policy.
- Huffman – SB 2224 requires a public retirement system to adopt a written funding policy that details the governing body’s plan for achieving a funded ratio that is equal to or greater than 100 percent no later than 01/01/2020.
Bill left pending.
SJR 27 (Huffman) Proposing a constitutional amendment prohibiting the use of state funds to pay for the obligations of a local public retirement system.
- Huffman – Amends the Texas constitution with voter approval to make sure that the state is not liable for any debts of a local public retirement system. Prohibits the use of state funds to pay for the obligations of a local public retirement system.
Bill left pending.
SCR 5 (Huffman) Urging Congress to repeal the Government Pension Offset and the Windfall Elimination Provision of the Social Security Act.
- Huffman – Asks congress and the President to repeal GPO and WEP of the Social Security Act.
- Hall – Thank you for this bill, Rep. Huffman. This bill has been unfair to our teachers in particular.
Tim Lee, Texas Retired Teachers Association
- For the bill.
- Hughes – Was Illinois a state also impacted by this?
- Yes, every state in the nation has some public worker affected by the GPO and WEP, Texas just has more people affected it.
Chris Jones, Combined Law Enforcement Association of Texas
- For the bill.
- This has been the biggest complaint I have heard from our members over the years.
Bill Elkin, Houston Police Retired Officers Association
- For the bill.
- This is a bill we have asked for each session.
- GPO and WEP is unfair to our Houston police officers.
Resolution left pending.
SB 957 (Bettencourt) Relating to voter approval of the issuance of certain obligations by municipalities to pay their unfunded liabilities to a public pension fund.
- Huffman – Similar to SB 151 from last session. SB 957 adds the requirement of voter approval prior to the issuance of Pension obligation bonds.
James Quintero, Texas Public Policy Foundation
- For the bill.
- Pension obligation bonds are risky financial instruments used to pay for unfunded liabilities to a public pension fund.
- Concern that POBs can be issued without voter approval.
Bill left pending.