1. Chuck Campbell Jackson Walker L.L.P. ccampbell@jw.com 512-236-2263
Alyca Riley Jackson Walker L.L.P
Legislative Developments, Legal Issues and Best Practices for Your Funds
September 30, 2019
DISCLAIMER:
This is not intended nor should it be used as a substitute for legal advice or opinion, which can be rendered only when related to specific fact situations.

2. General Pension Bills Additions to Annual Report (S.B. 322)
(Amended TX Gov’t Code, § effective immediately)
In addition to existing requirements, a public retirement system’s annual report must now include:
(1) a listing, by asset class, of all direct and indirect commissions and fees paid by the retirement system during the previous fiscal year for the sale, purchase, or management of system assets, and
(2) the names of investment managers engaged by the retirement system.

3. General Pension Bills Independent Investment Evaluation (S.B. 322)
(Added TX Gov’t Code, § effective immediately)
Every three years, public retirement systems must select an independent firm with substantial experience in evaluating institutional investment practices and performance to:
(1) evaluate the appropriateness, adequacy, and effectiveness of the retirement system’s investment practices and performance and
(2) make recommendations for improving the retirement system’s investment policies, procedures, and practices.
PRB Guidance

4. General Pension Bills Funding Policy (S.B. 2224)
(Added TX Gov’t Code, § effective Sept. 1, 2019)
No later than January 1, 2020, the governing body of a public retirement system must adopt a written funding policy that details the governing body’s plan for achieving a funded ratio of at least 100%.
PRB Guidance

5. Texas Open Meetings Act (TOMA)
“Walking Quorum”/Prohibited Series of Communications (S.B. 1640)
(Amended TX Gov’t Code, § – effective immediately)
Early 2019: Texas Court of Criminal Appeals found § of TOMA was unconstitutionally vague
86th Legislature amended § to prohibit certain series of communications among board members and third parties
Removed the previous requirement that the members involved had to “conspire[] to circumvent this chapter by meeting in numbers less than a quorum for the purposes of secret deliberations in violation of this chapter.”

6. Texas Open Meetings Act (TOMA)
“Walking Quorum”/Prohibited Series of Communications (S.B. 1640)
Under TOMA, a “meeting” means a deliberation between a quorum of a governmental body, or between a quorum of a governmental body and another person, during which public business or public policy over which the governmental body has supervision or control is discussed or considered or formal action is taken.
SB 1640 amended the definition of “deliberation” to include verbal and written communications and removed the requirement that a deliberation occur “during a meeting”.

7. Texas Open Meetings Act (TOMA)
“Walking Quorum”/Prohibited Series of Communications (S.B. 1640)
§ specifies that a violation of the TOMA will occur if:
(1) A member of a governmental body knowingly engages in at least one communication among a series of communications
(a) that each occur outside of a public meeting and
(b) that concern an issue within the jurisdiction of the governmental body in which the members engaging in the individual communications constitute fewer than a quorum but the members engaging in the series of communications constitute a quorum, and
(2) the member knew at the time that the member engaged in the communication that the series of communications
(a) involved or would involve a quorum and
(b) would constitute a deliberation once a quorum of members engaged in the series of communications.

8. Texas Open Meetings Act (TOMA)
“Walking Quorum”/Prohibited Series of Communications (S.B. 1640)
Any violation of this section is a misdemeanor, punishable by jail for at least one month but not more than six months and/or a fine of at least $100 but not more than $500.

9. Texas Open Meetings Act (TOMA)
Emergency Meeting Exception (S.B. 494)
(Amended TX Gov’t Code, § – effective Sept. 1, 2019)
SB 494 amended and clarifies rules and requirements to hold an emergency meeting under TOMA
What is an “emergency meeting”?
A meeting to deliberate or take action on an emergency or urgent public necessity
Could also involve an emergency item to be added to a posted agenda
Notice of an emergency meeting must be posted at least one (1) hour before the meeting is convened

10. Texas Open Meetings Act (TOMA)
Emergency Meeting Exception (S.B. 494)
What is an “emergency” or “urgent public necessity”?
(1) Imminent threat to public health and safety, including a threat described in (2) below if imminent, or
(2) a reasonably unforeseeable situation, including:
(A) fire, flood, earthquake, hurricane, tornado, or wind, rain, or snow storm;
(B) power failure, transportation failure, or interruption of communication facilities;
(C) epidemic; or
(D) riot, civil disturbance, enemy attack, or other actual or threatened act of lawlessness or violence.

11. Texas Open Meetings Act (TOMA)
Public Comment (H.B. 2840)
(Added TX Gov’t Code, § – effective Sept. 1, 2019)
Not likely to apply to TLFFRA plans
HB 2840 applies only to a governmental body described in Sections (3)(B)-(L), but not (A).
Public retirement systems generally fall under Section (3)(A) as a “board, commission, department, committee, or agency within the executive or legislative branch of state government that is directed by one or more elected or appointed members”.

12. Texas Open Meetings Act (TOMA)
Public Comment (H.B. 2840)
Boards could comply with the requirements if desired
Allow members of the public who desire to address the board regarding an item on an agenda to address the board before or during the board’s consideration of the item.
May adopt rules to limit the total amount of time each member has to comment on a given item.
Cannot prohibit public criticism of the Board

13. Texas Public Information Act (PIA)
Temporary Custodian (S.B. 944)
(Amended § , ; added § – effective Sept. 1, 2019)
Trustees and employees of governmental bodies are considered “Temporary Custodians” of public information.
“Temporary custodian” is an officer or employee of a governmental body who, in the transaction of official business, creates or receives public information that the officer or employee has not provided to the officer for public information of the governmental body or the officer’s agent.
Includes former officers or employees

14. Texas Public Information Act (PIA)
Temporary Custodian (S.B. 944)
If a current or former Trustee or employee of a public retirement system maintains, stores, or keeps public information on a privately owned device (i.e., a cell phone, computer, etc.), he or she must:
(1) forward or transfer the public information to the system to be preserved under the system’s retention program, or
(2) preserve the public information in its original form in a backup or archive and on the privately owned device for the time required under the system’s retention program.

15. Texas Public Information Act (PIA)
Temporary Custodian (S.B. 944)
SB 944 requires the retirement system’s officer for public information to make reasonable efforts to obtain public information from a temporary custodian if the information is requested.
SB 944 also clarifies that a Trustee or employee has no right or ownership of the information created or received while acting his or her official capacity.

16. Texas Public Information Act (PIA)
Contracting Information (S.B. 943) (amended § , added § – effective Jan. 1, 2020)
Information Related to Firefighters, Volunteer Firefighters, Emergency Medical Services Personnel, and Fire Safety Inspectors (H.B. 2446) (amended §§ , , added § – effective immediately)
Form for Requests for Information (S.B. 944) (added § – effective Sept. 1, 2019)
Catastrophe Exception (S.B. 494) (added § – effective Sept. 1, 2019)

17. Questions?

18. Chuck Campbell Jackson Walker L.L.P. ccampbell@jw.com 512-236-2263
Alyca Riley Jackson Walker L.L.P