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HomeMy WebLinkAboutCP 267 w CIT FO WO mm TEXAS e ❑ � U. COUNCIL PROPOSAL Date: File Number: Subject: Comments and changes concerning Senate Bill 976,a Bill relating to the public March 20,2007 267 retirement system of certain municipalities. Proposed By: City Manager's Review: QLA Page: Jungus Jordan City Attorney's Review: o� PAGE 1 OF 5 It is proposed that: 1. The Fort Worth City Council communicate it's concerns and comments in regards to Senate Bill 976,a Bill that would have significant impact on the administration of the City of Fort Worth Retirement Fund prior to consideration of the Bill in the Texas Senate. DISCUSSION: Senate Bill SB 976 was recently introduced in Austin.The Bill is an attempt to mediate and resolve a long standing concern by certain employee groups in the city concerning issues affecting the"administrative rules"that govern public retirement and pension plans.The Bill applies by provision to"a municipality with a population of 500,000 or more that has established,by municipal ordinance,a single unitary public retirement system for employees of all departments of the municipality."This legislation only applies to the City of Fort Worth Employee Retirement Fund. .he Bill covers two major areas in regards to the administration of the Fort Worth Employees Retirement Fund that have been in dispute for many years between various employee groups,city staff and City Councils.The first area is the definition of the composition of the Fort Worth Employee's Retirement Fund Board. The second major area covered is the procedures to be used to apply any change to the rates of contributions made by either the employee through payroll deduction or by the City.A summary of the provisions in these two areas is as follows: 1. Composition of the Board of Trustees-The Bill proposes that the Board be composed of 10 members—six representing the employee beneficiary groups(one general employee,one police officer,and one fire fighter and one retiree from each respective employee group)to be elected by participating members.Four members would be appointed by the governing body(the Mayor and City Council)to include the City's Chief Financial Officer(if vested in the plan). 2. Changes to Municipal Contributions—The Bill would require an election of the eligible members following an actuarial analysis of the fiscal impact of the proposed amendment to the contribution rate. The Bill does offer an opportunity to arbitrate a long standing local dispute and promote a level of trust that employees have an input in'the administration of the Retirement Fund.There are key factors that can promote the resolution of the issue.However,as currently drafted,the Bill does not sufficiently protect the fiduciary responsibility of the governing body. The Bill would limit or restrict the fiduciary authority of the Fort Worth City Council and could result in usurping the appropriations authority of the City Council in administering appropriate and fair total compensation for employee groups.The Texas Constitution Article 16,section 66 requires that the municipality must fund any unfunded requirements Legulations xperienced in the Employee Retirement Fund.This provision dictates a critical fiduciary role for the Fort Worth City ouncil. It is mandatory that the City Council, as representatives of the Fort Worth citizens,taxpayers and employees ave final authority in appropriations of city funds and approval of employee benefits within established rules and J LEGALITY ❑ FISCAL NOTE ❑ CITY MANAGER'S COMMENTS 13 CITY POLICIES MANUAL CIT FO WO , TEXAS � o � ❑ o o. COUNCIL PROPOSAL Date: File Number. Subject: Comments and changes concerning Senate Bill 976,a Bill relating to the public March 20,2007 267 retirement system of certain municipalities. Proposed By: City Manager's Review: Page: Jungus Jordan City Attorney's Review: PAGE 2 OF 5 Recommendation: That the State Senate include the following significant changes to the proposed Bill before considering passage: 1. Board Composition—The Board of Trustees membership should be eleven members-six as elected by the respective employee groups,four residents of the municipality and the Chief Financial Officer(being a vested member of the plan should not be a requirement for this position). 2. Changes to Municipal Contributions— a. The governing body(the City Council)shall review and approve the assumptions to be used by the actuary in determining the funding status of the Retirement Fund. b. The Board of Trustees will meet with the governing body(City Council)at a minimum of twice annually to review the fund performance and determine any unfunded requirements. c. Following the polling/election of employees,concerning contribution changes,action of approval or rejection must be taken by the board of trustees or the governing body by the 90th day after the date the votes of the special election are canvassed. d. The governing body will be solely responsible for approval/disapproval of benefits changes/ modifications in accordance with applicable laws,regulations and ordinances. Those proposed changes will be coordinated and discussed with the Board of Trustees and applicable employee groups. e. Emergency changes in Administrative rules and regulations-Notwithstanding the amendment procedures contained in the proposed legislation, in an emergency situation,as reasonably determined by the unanimous vote of all members of the governing body of the municipality,the governing body of the municipality may, upon five(5)business days with prior written notice to the administrative head of the retirement system,amend the administrative rules and regulations in a manner consistent with the emergency. The governing body of the municipality shall re-examine the emergency to determine if it still exists after a period of ninety days and each following ninety-day period for the duration of the emergency. The continuation of the emergency shall be determined by unanimous vote of the governing body of the municipality after each ninety-day period. Conclusion: It is recognized that SB 976 has value in resolving long standing local dispute;however, as drafted the Bill would unduly limit the fiduciary role of the Fort Worth City Council in governing the Fort Worth Employee Retirement Fund in protecting the taxpayer. Contingent upon the inclusion of all of the changes listed above in"Recommendations", the Fort Worth City Council would support SB976 as a resolution of current issues,but only with these changes. LEGALITY: The City Council has the legal authority to adopt this Council Proposal. As to the substance of the legislation,the City Attorney concurs with the City Manager's comments. ❑ LEGALITY ❑ FISCAL NOTE ❑ CITY MANAGER'S COMMENTS ❑ CITY POLICIES MANUAL i CIT FO WO M TEXAS m ❑ � a 0 COUNCIL PROPOSAL Date: File Number: Subject: Comments and changes concerning Senate Bill 976,a Bill relating to the public March 20,2007 267 retirement system of certain municipalities. Proposed By: City Manager's Review: _ Page. Jungus Jordan City Attomey's Review: PAGE 3 OF 5 FISCAL NOTE: The fiscal impact can not be calculated because the fiscal impact has to be measured over time,however the Council Proposal reduces City Council control and oversight of the Employee Retirement Fund. CITY MANAGER'S COMMENT: Since the inception of the Employee Retirement Fund in 1947,the City Council has maintained oversight of this important fund with the governance of the fund detailed in local ordinance. And throughout this history of oversight,the City Council working with the Board of Trustees of the Fund has provided significant benefits to retirees from the City of Fort Worth. In 1991, state legislation was proposed that attempted to take oversight control of the fund away from the City Iouncil. Since that time and until this session,the City has fought off these attempts opting to maintain decision-making dt the local level without state interference. It is true that the City of Fort Worth Employee Retirement Fund is the only major city retiree fund not codified instate statute. This fact alone does not justify codifying the City's Employee Retirement Fund under state statute. The City's Employee Retirement Fund has been able to offer competitive retiree benefits comparable to most funds currently under state statute and with less taxpayer contribution requirements than these other retirement funds. The Council Proposal attempts to make SB 976 an acceptable piece of legislation. The City has a long-standing legislative position of opposing any legislation that concedes local control to a state statute. Even if SB 976 is amended to be agreeable to the City Council, it likely will not remain so over the course of time. Staff has Iooked into the major city funds currently under state statute and found the following: Houston Municipal Employees(Article 6243 h)-created 1947 and amended in: 1947, 1951, 1953, 1957, 1959, 1961, 1965, 1967, 1971, 1975, 1981, 1987, 1989, 1991, 1993, 1995, 1997, 1999 Restated in 2001 and amended in 2003 Houston Fire(Article 6243e.2(1))Created in 1975 (repealed prior legislation on Fire Pension)and amended in 1981, 1983, 1985, 1987, 1989, 1991, 1993, 1995,Recodified in 1997 and amended in 1999,2001,proposed legislation in 2007 Houston Police Department(Article 62438-4)Established in 1947 and amended in 1955, 1961, 1963, 1965, 1967, 1971, 1973, 1975, 1979, 1981, 1987, 1989, 1991, 1993, 1995, 1997 and amended in 2003 Austin Municipal Employees(Article 6243n)Established in 1991 (prior to this the Fund was governed by City Ordinance) Amended in 1993, 1995, 1997, 1999,2001,2003 J LEGALITY ❑ FISCAL NOTE ❑ CITY MANAGER'S COMMENTS ❑ CITY POLICIES MANUAL CIT FO WO , TEXAS e ❑ � o. COUNCIL PROPOSAL Date: File Number: JSubject: Comments and changes concerning Senate Bill 976,a Bill relating to the public March 20 2007 267 retirement system of certain municipalities. Proposed By: City Manager's Review: &Ww� Page: Jungus Jordan City Attorney's Review: , • '� p,*/ PAGE 4 OF 5 Austin Fire(Article 6243e.1)Created in 1975 (repealed prior Fire Pension legislation)Amended in 1979, 1981, 1985, 1987, 1989, 1991, 1993, 1995, 1997, 1999,2001 Austin Police(Article 6243n-1)Created in 1991 (prior to this legislation the Fund was governed by City Ordinance) Amended in 1995, 1997, 1999,2001,2003 and proposed legislation in 2007 San Antonio Fire&Police(Article 6243o)Created in 1941 Amended in 1951, 1955, 1957, 1959, 1963, 1967, 1969, 1971, 1973, 1975, 1979, 1981, 1983, 1985, 1987, 1989, 199lRecodified in 1993 and Amended in 1995, 1997, 1999,2001,2003, 2005,Proposed legislation in 2007 Dallas Fire&Police(Article 6243a-1)Created in 1933 Amended in 1935, '936, 1941, 1945, 1947, 1951, 1953, 1967, 1969, 1971, 1973, 1975, 1979 Restated in 1989 Amended in 1993,2001 ?"1 Paso Fire&Police(Article 6243b)Created in 1933 Amended in 1935, 1937, 1959, 1961, 1963, 1969, 1971, 1973, -975, 1981, 1985, 1991,2001 From the information above,the City Council has to conclude that any agreement on legislation today will not stand the test of time. It is apparent from above,that the City will frequently have to go to Austin to fight off unfavorable legislation or will have to entertain proposals by the Board of Trustees or employee groups to change the legislation. The City will have to rely on the good will of members of the Legislature,the majority of whom have no connection to Fort Worth,to either modify,accept,or defeat legislation in the future. Why would the City Council want to subject itself and the Employee Retirement Fund to state oversight? The City Council and the Employee Retirement Fund Board of Trustees have the authority to locally develop legislation in the form of local ordinances to respond to any needed changes in the Retirement Fund. Senate Bill 976,even with the proposed changes will diminish the current Council authority. One of the justifications in the discussion section of this Council Proposal for supporting the legislation is that the bill offers"an opportunity to arbitrate a long standing local dispute and promote a level of trust that employees have an input in the administration of the Retirement Fund". In the long term,this legislation will not permanently settle the local dispute or promote a level of trust given the proposed structure of the Board in the bill and the proposed veto power of the Council over benefits. Additionally,as changes are proposed,disagreements and suspicions about motivations will arise that will continue to test the trust factor of employees and of sitting City Councils. Instead of dealing with these issues locally,the focus will shift to Austin to settle our differences. Opting to place the City's retirement system under state statute is bad public policy,especially in light of the fiduciary f responsibility inherited by the City through the adoption of Article 16,section 66 of the Texas Constitution which requires that the City guarantee that all benefits earned by retirees and plan participants are not reduced or otherwise impaired. The City Council needs to maintain the ultimate legislative option to respond to detrimental changes in the retirement sand in order to protect the fund and to protect the taxpayers of this City. A better approach than supporting state J LEGALITY ❑ FISCAL NOTE ❑ CITY MANAGER'S COMMENTS 13 CITY POLICIES MANUAL CIT O , TEXAS COUNCIL PROPOSAL Date: File Number. Subject: Comments and changes concerning Senate Bill 976,a Bill relating to the public Karrh 20,2N7 267 retirement system of certain municipalities. Proposed By: City Manager's Review: Page: Jungus Jordan City Attorney's Review: yc,,, u, , PAGE 5 OF 5 legislation is for the City Council to appoint a select group of citizens,employees,manager's staff and Councilmembers to meet and discuss beneficial changes to the local ordinance that will address the trust issues and input issues outlined in the discussion section of this Council Proposal. A meeting of the Retirement Board and the City Council could be a good starting point. Additionally,consistently the employee groups complain that on any given Tuesday,the City Council can change the ordinance and likewise change benefits and contributions. I would propose that this select committee or the City Council and Board of Trustees discuss a change in the ordinance that requires the City to give advance notice to the Board of Trustees of any changes proposed to the ordinance and to hold a public hearing weeks in advance of voting on any ordinance changes. This process would allow for structured and timely input by the Retirement Board,plan participants,and employee groups. The City Manager cannot support this Council Proposal and does not recommend supporting the legislation. Given the historical legislative pattern of the other funds governed by state statute,conceding the City's retirement fund to state law will be the beginning of a long line of possible detrimental legislative amendments that could be harmful to the 'etirement Fund and to the City,possibly requiring more financial contributions on the part of City taxpayers. This issue .equires more discussion and development of a locally acceptable sol tate legislation is not the answer. PROPOSED BY: Ju usIjin n Dan Scart Co cher Councilmember APPROVED CITY COM _ MAR 2 7 2001 City Secretary of th City of Fort Worth,To--,as 63 LEGALITY ❑ FISCAL NOTE ❑ CITY MANAGER'S COMMENTS ❑ CITY POLICIES MANUAL 80R2998 KFF-F By: Brimer S.B. No. 976 A BILL TO BE ENTITLED AN ACT relating to the public retirement system of certain municipalities. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Title 109, Revised Statutes, is amended by adding Article 6243i to read as follows: Art. 6243i. UNITARY RETIREMENT SYSTEM FOR CERTAIN MUNICIPALITIES PART 1. GENERAL PROVISIONS Sec. 1. 01. APPLICABILITY. This article applies only to a municipality with a population of 500, 000 or more that has established, by municipal ordinance, a single unitary public retirement system for employees of all departments of the municipality.. Sec. 1 . 02. DEFINITIONS. In this article: (1) "Administrative rules" means the rules adopted to govern a public retirement system, including rules regarding the participation in, contributions to, and benefits from the public retirement system. (2) "Board of trustees" means the persons elected or 006h, appointed to administer the public retirement system. Page - 1 - S. B. No. 976 (3) "Governing body" means the governing body of a municipality to which this article applies. (4) "Participating member" means a person who makes contributions to the public retirement system as an employee of a municipality to which this article applies. (5) "Participating retiree" means a person who receives or who is eligible to receive a service retirement annuity from the retirement fund. (6) "Pension office" means the administrative office of the public retirement system. (7) "Public retirement system" means a continuing, organized program or plan of service retirement, disability retirement, or death benefits for employees of a municipality, to which this article applies but does not include: (A) a program for which benefits are administered by a life insurance company; (B) a program providing only workers' compensation benefits; (C) a program administered by the federal government; (D) an individual retirement account or individual retirement annuity within the meaning of Section 408, or a retirement bond within the meaning of Section 409, of the Internal Revenue Code of 1986; (E) a plan described by Section 401 (d) of the Internal Revenue Code of 1986; Page -2 - S.B. No. 976 (F) an individual account 21an consisting of an annuity contract described by Section 403 (b) of the Internal Revenue Code of 1986; or (G) an eligible state deferred compensation plan described by Section 457 (b) of the Internal Revenue Code of 1986 (8) "Retirement fund" means the trust fund established by or in conjunction with the public retirement system for the purpose of holding assets to be used to provide benefits payable by the public retirement system. (9) "Rule amendment" includes any amendment of, repeal of, addition to, deletion of, modification of, or change to an administrative rule. (10) "Survivor" means a person, including the surviving spouse or dependent, who receives survivor benefits from a retirement fund. (11) "Vested" means the accrued right of a participating member who has met the age and length-of-service requirements for service retirement required by the public retirement system. A member whose retirement rights are vested may withdraw from employment with the municipality, leave the member' s accumulated contributions on deposit with the public retirement system, and begin to receive the member' s service retirement annuity. PART 2. MEMBERSHIP Sec. 2 . 01 . GENERAL MEMBERSHIP REQUIREMENT. Except as I otherwise provided by administrative rule, municipal ordinance, or this section, a person becomes a participating member of the Page -3 - S.B. No. 976 retirement system on the date of the person' s employment by the municipality. A person employed by the municipality is not eligible to be a participating member if the person is an independent contractor or an employee of an independent contractor doing work for the municipality. PART 3. CREDITABLE SERVICE Sec. 3. 01. TYPES OF CREDITABLE SERVICE. The board by rule shall establish the types of service for which a participating member earns credit . Sec. 3. 02. BENEFIT ELIGIBILITY BASED ON CREDITED SERVICE. A participating member' s eligibility to receive a service retirement benefit is based on credited service at the time of retirement. PART 4 . BENEFITS Sec. 4 . 01. TYPES OF BENEFITS. The types and calculation of benefits provided by the retirement system are determined in accordance with: (1) administrative rules governing benefits in effect on January 1, 2007; or (2) amendments to those rules adopted under procedures prescribed by this article. Sec. 4 . 02. AMENDMENTS CONCERNING BENEFIT PROGRAMS OR PLANS. (a) An amendment to the administrative rules governing the benefit plan or program of the public retirement system may only be made if: Poll (1) a qualified actuary performs an actuarial analysis of the fiscal impact of the proposed amendment and determines that Page -4 - S.B. No. 976 the amendment will not require increased contributions by the municipality to the public retirement system; (2) the board of trustees, by majority vote, calls a special election or elects to place the proposed amendment on the ballot as a separate proposition to be voted on at a trustee election in which all participating members may vote; and (3) a majority of all participating members eligible to vote casts ballots in the special election and a majority of those voting approves the amendment. (b) An amendment to the administrative rules governing the benefit plan or program of the public retirement system applies to: (1) all participating members of the public retirement system; and (2) a participating retiree or survivor only if: (A) the amendment changes the basic formula or any other calculation of benefits; or (B) the amendment states that it applies to all participating retirees and survivors. (c) If an amendment changes the basic formula or any other calculation of benefits, the benefits of a participating retiree or survivor must be recalculated using the amended formula or calculation. (d) An election under Subsection (a) of this section must be by secret ballot. If a special election is called, the pension office shall conduct the election and the board of trustees shall canvass the vote. Page -5 - S.B. No. 976 (e) A person who is a participating member on the date of an election held under this section is eligible to vote in the election. (f) An amendment to the administrative rules governing the benefit plan or program of a public retirement system may not deprive a person, without the person' s written consent, of the person' s right to receive benefits from the retirement system that are fully vested. (g) Unless otherwise provided by the proposed amendment, an amendment to the administrative rules adopted under this section becomes effective immediately on approval by the participating members under Subsection (a) (3) of this section. PART 5. ADMINISTRATION Sec. 5. 01. COMPOSITION OF THE BOARD OF TRUSTEES. (a) The board of trustees is composed of 10 members. (b) Each of the following groups of participating members shall elect one vested, participating member from their respective group to serve as a member of the board of trustees : (1) police officers; (2) firefighters; and (3) other general employees of the municipality who are not employed as a police officer or firefighter. (c) Each of the following groups of participating retirees shall elect one participating retiree from their respective group Jaw to serve as a member of the board of trustees: (1) retired police officers; Page -6 - S.B. No. 976 (2) retired firefighters; and (3) other retired general employees of the municipality who did not retire from service as a police officer or firefighter. (d) The mayor shall nominate and the governing body shall confirm, by majority vote, three residents of the municipality to serve as members of the board of trustees. A person appointed under this subsection may be a member of the governing body. (e) The governing body shall designate the treasurer or finance director of the municipality to serve as a member of the board of trustees if the treasurer or finance director is a vested, participating member of the public retirement system. If the treasurer or finance director is not a vested, participating member, the governing body shall designate a participating member of the municipality' s finance department to serve as a member of the board of trustees. (f) Members of the board of trustees hold office for terms of two years. Sec. 5. 02 . BOARD POWERS AND DUTIES. (a) The board of trustees shall administer the public retirement system, including the retirement fund of the public retirement system. (b) The board of trustees may adopt amendments to the administrative rules in accordance with Sections 4 . 02, 5. 06, 5. 07, and 5. 08 of this article. Sec. 5. 03. BOARD CHAIR. The board of trustees shall elect a chair from the membership of the board. Sec. 5. 04 . QUORUM; VOTING. (a) Except as provided by Page -7 - S.B. No. 976 Subsection (b) of this section, each member of the board of trustees is entitled to one vote. (b) Unless otherwise provided by this article, the chair of the board of trustees may only vote in the event of a tie. (c) Except as provided by Subsection (d) of this section, six members of the board of trustees constitute a quorum to transact the business of the board. (d) In the event of a vacancy on the board of trustees, the number of members required to constitute a quorum is reduced by the number of vacancies on the board of trustees. Sec. 5. 05. QUALIFIED ACTUARY. (a) The board of trustees may employ a qualified actuary. (b) To be a qualified actuary, an actuary must be: (1) a fellow of the Society of Actuaries; or (2) a member of the American Academy of Actuaries. Sec. 5.06. RULE AMENDMENTS ADOPTED BY BOARD OF TRUSTEES. (a) Except as provided by Sections 4 . 02, 5. 07, and 5. 08 of this article, the board of trustees may adopt amendments to the administrative rules if: (1) a qualified actuary performs an actuarial analysis of the fiscal impact of the proposed amendment and determines that the amendment will not impact the actuarial soundness of the fund; (2) the proposed amendment is placed on the agenda of the board for at least two consecutive meetings of the board that are not less than 30 days apart for the purpose of giving participating members an opportunity to comment on the proposed Page -8 - S.B. No. 976 amendment; and (3) the proposed amendment is approved by a majority vote of the full membership of the board of trustees. (b) An amendment to the administrative rules adopted in accordance with this section becomes effective immediately unless otherwise provided by the amendment. Sec. 5. 07 . AMENDMENTS CONCERNING CONTRIBUTIONS BY MUNICIPALITY. (a) An amendment to the administrative rules governing municipal contributions, including an amendment to the rate or manner of making contributions, may be made only if: (1) a qualified actuary performs an actuarial analysis of the fiscal impact of the proposed amendment; (2) the board of trustees or the governing body, by majority vote, calls a special election of all participating members to approve the amendment; (3) the amendment is approved by a majority of the participating members eligible to vote in the special election; and (4) except as provided by Subsection (b) of this section, the amendment is approved by a majority vote of: (A) the board of trustees, if the governing body called the special election under Subdivision (2) of this subsection; or (B) the governing body, if the board of trustees called the special election under Subdivision (2) of this subsection. (b) If the board of trustees or the governing body, as Page -9 - S.B. No. 976 applicable, has not approved or rejected the proposed amendment under Subsection (a) (4) of this section by the 60th day after the date the votes of the special election are canvassed, the proposed amendment takes effect on the 60th day after the date the votes are canvassed. (c) The pension office shall conduct a special election under Subsection (a) of this section by secret ballot. The board of trustees shall canvass the vote. (d) A person who is . a participating member on the date of the special election is eligible to vote in the special election. (e) Unless otherwise provided by the proposed amendment and except as provided by Subsection (b) of this section, an amendment to the administrative rules becomes effective on approval by the board of trustees or the governing body, as appropriate, under Subsection (a) (4 ) of this section. Sec. 5. 08 . EMERGENCY, ROUTINE, OR STATUTORILY REQUIRED AMENDMENTS. (a) Unless an amendment to the administrative rules requires adoption in accordance with Section 4 . 02 or 5. 07 of this article, the board of trustees may adopt emergency, routine, or statutorily required amendments to the administrative rules that are required by federal or state law if the board of trustees by unanimous vote of the members present and voting: (1) agrees that the proposed amendment is an emergency, routine, or statutorily required amendment; and 000, (2) approves the proposed amendment. (b) An amendment adopted in accordance with this section is Page -10 - S.B. No. 976 an automatic agenda item for the next regular meeting of the board of trustees and is subject to review or repeal by the board at that meeting. SECTION 2. (a) The administrative rules governing the public retirement system of a municipality to which this Act applies under Section 1 . 011 Article 6243i, Revised Statutes, as added by this Act, in effect on January 1, 2007, shall continue in effect on and after the effective date of this Act. (b) The changes in law made by Sections 4 . 02, 5. 06, 5. 07, and 5. 08, Article 6243i, Revised Statutes, as added by this Act, apply to a change in the administrative rules governing a public retirement system of a municipality to which this Act applies under Section 1. 011 Article 6243i, Revised Statutes, as added by this Act, adopted on or after the effective date of this Act. SECTION 3 . (a) As soon as practicable after the effective date of this Act, a new board of trustees charged with administering the public retirement system of a municipality described by Section 1 . 01, Article 6243i, Revised Statutes, as added by this Act, shall be elected or appointed in accordance with Section 5. 011 Article 6243i, Revised Statutes, as added by this Act. (b) The term of a member of the board of trustees or other board administering the public retirement system described by Subsection (a) of this section who is serving on the board on the effective date of this Act expires on the date that a majority of the new board of trustees has been elected or appointed under Page -11 - S. B. No. 976 Subsection (a) of this section. SECTION 4 . This Act takes effect immediately 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 immediate effect, this Act takes effect September 1, 2007 . Adw Page -12 -