House Bill 1101

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    Florida House of Representatives - 1999                HB 1101

        By Representatives Murman, Crist, Bradley, Byrd, Hart,
    Henriquez, Bilirakis, Alexander, Wallace, Ogles and L. Miller





  1                      A bill to be entitled

  2         An act relating to the City of Tampa,

  3         Hillsborough County; repealing s. 4(F), chapter

  4         23559, Laws of Florida, 1945, as amended,

  5         relating to the definition of casual laborer;

  6         amending s. 4, chapter 23559, Laws of Florida,

  7         1945, as amended; revising the definition of

  8         "temporary employee," "continuous service," and

  9         "average monthly salary"; repealing s. 5(C),

10         chapter 23559, Laws of Florida, 1945, as

11         amended, relating to clerical and medical

12         examination expenses; amending s. 5, chapter

13         23559, Laws of Florida, 1945, as amended;

14         providing for employer contributions to fund

15         the costs of administering the plan; amending

16         s. 6, chapter 23559, Laws of Florida, 1945, as

17         amended; providing for additional authorized

18         investments; amending s. 12, chapter 23559,

19         Laws of Florida, 1945, as amended; revising

20         death benefits; repealing s. 13, chapter 23559,

21         Laws of Florida, 1945, as amended, relating to

22         cost-of-living increase; and creating a new s.

23         13 to provide additional cost-of-living

24         adjustments; amending s. 18, chapter 23559,

25         Laws of Florida, 1945, as amended; revising the

26         time in which temporary employees are required

27         to obtain a physical examination; amending s.

28         20, chapter 23559, Laws of Florida, 1945, as

29         amended; proscribing the assignment of a refund

30         of contributions; creating s. 22, chapter

31         23559, Laws of Florida, as amended, providing

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  1         for a Deferred Retirement Option Program;

  2         providing an effective date.

  3

  4  Be It Enacted by the Legislature of the State of Florida:

  5

  6         Section 1.  Present subsection (F) of section 4 of

  7  chapter 23559, Laws of Florida, 1945, as amended, is repealed,

  8  subsections (G), (H), and (J) of said section are amended, and

  9  subsections (G), (H), (I), (J), (K), (L), (M), (N), (0), and

10  (P) are renumbered as subsections (F), (G), (H), (I), (J),

11  (K), (L), (M), (N), and (0), respectively, to read:

12         Section 4.  Definitions.

13         (F)(G)  Temporary employee. An employee whose period of

14  employment is not contemplated to extend beyond 180 90 days

15  from the date of employment. Temporary employees will only be

16  considered part of this pension plan if their employment

17  extends beyond the 180 90 day period and they are required to

18  take a physical examination pursuant to section 18 of this

19  act.

20         (G)(H)  Continuous service. The term "continuous

21  service" or service continuously or continuous shall mean

22  unbroken service by an employee immediately preceding the date

23  of application for retirement, except for temporary

24  interruptions of service caused by military service, illness,

25  or involuntary severance from service through no fault of the

26  employee, and provided he or she is reinstated. Time spent

27  upon an authorized leave of absence by a member of a

28  recognized bargaining unit for union business which is

29  participated in by the recognized bargaining unit for general

30  city employees or time spent on any leave of absence shall not

31  constitute a break in service and the time so spent shall be

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  1  deemed to be continuous service.; However, credit towards

  2  retirement for Division A employees will not be assigned to

  3  that time so spent upon an authorized leave of absence by a

  4  member of a recognized bargaining unit for union business

  5  shall not be creditable unless the individual, if in Division

  6  A, pays into the pension fund on a biweekly bi-weekly basis an

  7  amount equal to the aggregate contributions such employee

  8  would have made and such amounts the city would have paid into

  9  the fund based on the salary such employee would have earned

10  had he or she not been on an authorized union leave of

11  absence. For the purposes of this act, the terms "service" and

12  "continuous service" shall have the same meaning and shall be

13  used interchangeably.

14         (I)(J)  Average monthly salary. The average monthly

15  salary shall be determined by calculating the average of an

16  employee's salary for the highest 3 of the last 10 years of

17  continuous service employment ending on the date of

18  retirement, and dividing by 12. In the event an employee does

19  not have 10 years service at the time his or her average

20  monthly salary is calculated, the average for the highest 3 of

21  the total number of years employed shall be used for this

22  definition. If the employee does not have 3 years service, the

23  average for years employed shall be used.

24         Section 2.  Present subsection (C) of section 5 of

25  chapter 23559, Laws of Florida, 1945, as amended, is repealed,

26  subsection (B) of said section is amended, and subsection (D)

27  is renumbered as subsection (C), to read:

28         Section 5.  Contributions.

29         (B)  Employer contributions. Contributions of the city

30  shall consist of the amount of moneys necessary, when combined

31  with employee contributions, to maintain a level of funding

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  1  adequate to enable payment of the benefit amounts prescribed

  2  by the plan, and to pay the yearly amortization of any accrued

  3  unfunded liability, and to fund the costs of administering the

  4  plan. Employer contributions shall be placed in the fund

  5  established pursuant to this act.

  6         Section 3.  Section 6 of chapter 23559, Laws of

  7  Florida, 1945, as amended, is amended to read:

  8         Section 6.  Administration. The administration of this

  9  fund shall be in charge of a pension or retirement board,

10  consisting of seven members who shall be designated as

11  trustees of the pension or retirement fund ("board of

12  trustees"). Three members of this board shall be appointed by

13  the Mayor or Executive Head of the City of Tampa. Three

14  members of this board shall be employees participating in this

15  fund elected by the members of the fund. However, not more

16  than one employee member shall be elected from the same

17  department of the employer. In the event that two or more

18  candidates from the same department should receive sufficient

19  number of votes for election, then only the candidate

20  receiving the highest number of votes among the candidates

21  from the same department shall be elected. The director of

22  finance shall be the seventh member of this board. The three

23  members of this board to be appointed by the mayor or

24  executive head of the said city, shall be appointed

25  immediately after the passage of this act, and they shall

26  qualify within 30 days thereafter. One member appointed by the

27  mayor or executive head of the city shall serve for a period

28  of 3 years, one member for a period of 2 years, and one member

29  for a period of 1 year. Three members of this board shall be

30  elected by the employees who are beneficiaries of this fund.

31  One member elected shall serve for a period of 3 years, one

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  1  member for a period of 2 years, and one member for a period of

  2  1 year. At the expiration of the term of office of each member

  3  appointed, the mayor or executive head of the city shall

  4  appoint his or her successor to serve for a term of 3 years.

  5  Thirty days prior to the expiration of the term of office of

  6  each member elected, a successor shall be elected by the said

  7  employees and shall take office upon the expiration of his or

  8  her predecessor's term and shall serve for a term of 3 years.

  9  Vacancies on the pension or retirement board before the

10  expiration of the term of office shall be filled in the same

11  manner as prescribed for members replacing those whose term of

12  office expires for the period of the unexpired time. The board

13  shall have the power to adopt and prescribe reasonable rules,

14  regulations, and orders necessary and proper for effective

15  administration and enforcement of this act and for the

16  election of trustees. The director of finance The treasurer of

17  the city shall be the treasurer of the board and he or she

18  shall give bond as may be prescribed by the board. The city

19  attorney shall be the legal advisor of the board. The

20  compensation of all persons engaged by the city for the board

21  of trustees and all other expenses of the board of trustees

22  necessary for the administration of the plan shall be paid out

23  of the fund at such rates and in such amounts as the board of

24  trustees shall approve, but in no case shall the expenditures

25  for such compensation and administration exceed .5 percent of

26  the maximum of the fund each fiscal year. The funds shall be

27  managed by said trustees and shall be invested by the trustees

28  in accordance with the following:

29         (A)  That the board of trustees shall retain the

30  services of one or more nationally recognized professional

31  investment counselors or state or national banks in the State

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  1  of Florida offering qualified and competent investment

  2  advisory services. Said banks must be capitalized at not less

  3  than $10 million, having trust assets aggregating not less

  4  than $150 million in value, and having not less than 500 trust

  5  accounts.

  6         (B)  That not less than once every 6 months a written

  7  opinion shall be obtained from the investment counselor or

  8  counselors as to the overall condition and composition of the

  9  investment portfolio.

10         (C)  That the portfolio, representing the principal or

11  surplus funds of the pension fund may be invested in the

12  following securities or other property, real or personal,

13  including, but without being limited to, bonds, notes, or

14  other evidences of indebtedness issued, or assumed or

15  guaranteed in whole or in part by the United States or any of

16  its agencies or instrumentalities; or by any foreign

17  government or political subdivisions or agencies thereof the

18  Dominion of Canada or any of its provinces, cities or

19  municipal corporations; or by the State of Florida, or by any

20  county, city, school district, municipal corporation, or other

21  political subdivision of the State of Florida, both general

22  and revenue obligations; in mortgages and other interests in

23  realty and shares or certificates of real estate investment

24  trusts; or in such corporation bonds, notes, or other

25  evidences of indebtedness, and corporation stocks including

26  common and preferred stocks, or any corporation created or

27  existing under the laws of the United States, of any of the

28  states of the United States or, of the Dominion of Canada or,

29  if the securities are listed on the New York Stock Exchange,

30  of any foreign government or political subdivisions or

31  agencies thereof; country, provided:

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  1         1.  The board of trustees shall cause actuarial surveys

  2  of the plan to be made from time to time as deemed necessary

  3  or as required by state law, by a competent actuary to be

  4  selected by the board of trustees and the cost of same shall

  5  be provided for in the same manner as the cost of medical

  6  examinations and clerical expenses in Section 5.

  7         2.  In making each and all of such investments the

  8  board of trustees shall exercise the judgment and care under

  9  the circumstances then prevailing which men or women of

10  ordinary prudence, discretion, and intelligence exercise in

11  the management of their own affairs, not in regard to

12  speculation but in regard to the permanent disposition of

13  their funds, considering the probable income therefrom as well

14  as probable safety of their capital.; provided, However, that

15  not more than 65 percent of said fund, based on the total book

16  value of all investments held, shall be invested at any time

17  in common and/or preferred stocks, and that not more than 10

18  percent of said fund shall be invested at any given time in

19  the preferred and/or common stock of any one corporation and

20  its affiliates; and that not more than 5 percent of the

21  outstanding stock of any one corporation and its affiliates

22  shall be held by the fund at any given time; and that

23  corporation bonds, notes, or other evidences of indebtedness

24  commonly referred to as "fixed income investments," must hold

25  a rating in one of the four three highest classifications by a

26  major rating service and corporation bonds, notes, or other

27  evidences of indebtedness with an equity conversion provision

28  used as an equity substitute are not required to hold a rating

29  in one of the four highest classifications by a major rating

30  service.

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  1         3.  Anything in this chapter to the contrary

  2  notwithstanding, the board of trustees may also invest the

  3  principal or surplus funds of the pension fund, without

  4  limitations, in appropriate contracts of life insurance or

  5  group annuities, with insurers duly licensed to do business in

  6  Florida, including any such contract or contracts which

  7  provide for the placement of funds in separate accounts

  8  maintained by any such insurer in accordance with the laws of

  9  Florida controlling such accounts.

10         Section 4.  Subparagraphs b. and f. of paragraph 1. of

11  subsection (A) and paragraph 4. of subsection (B) of section

12  12 of chapter 23559, Laws of Florida, 1945, as amended, are

13  amended to read:

14         Section 12.  Death benefits.

15         (A)  Division A employees:

16         1.  Should any retired employee or active employee,

17  regardless of age, having earned pension credit and

18  participated in this fund, die and leave a widow or widower,

19  and/or a child or children under the age of 18 years, or one

20  or both solely dependent parents, then the trustees shall

21  authorize and direct payment of a pension to the widow or

22  widower, and/or child or children, or the parent or parents,

23  but only in the following amounts and on the following

24  conditions:

25         b.  To the children, a pension of $100 $15 per month

26  for each child until said child or children shall marry or

27  reach the age of 18 years; provided, however, combined

28  payments to the widow or widower, and/or children shall not

29  exceed the maximum pension the employee had earned at the time

30  of his or her death.

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  1         f.  Children who are orphaned shall receive equally a

  2  monthly pension equal to 75 percent of the employee's accrued

  3  pension until they marry or reach the age of 18 years, or die.

  4  Upon said children reaching the age of 18 years, if there is a

  5  balance in the employee's contribution account, said balance

  6  shall be paid in a lump sum to his or her legal heirs said

  7  children equally.

  8         (B)  Division B employees:

  9         4.  No pension shall be allowable to any spouse

10  pursuant to the provisions of this subsection unless she or he

11  was married to the deceased employee on prior to the date of

12  retirement of the employee.

13         Section 5.  Present section 13 of chapter 23559, Laws

14  of Florida, 1945, as amended, is repealed, and a new section

15  13 is added to said chapter, to read:

16         Section 13.  Cost-of-living adjustment.

17         (A)  The purpose of this section is to provide

18  cost-of-living adjustments to the monthly pension benefits due

19  all retired employees of this plan.

20         (B)  On October 1, 1999, a single adjustment shall be

21  made to the pension benefit due each employee who retired

22  before January 1, 1975, from active service, and the

23  beneficiaries thereof, such that the amount of the monthly

24  pension benefit due such employees and beneficiaries on

25  October 1, 1999, shall be the amount of the retired employee's

26  or beneficiary's monthly benefit being received on September

27  30, 1999, plus an amount, compounded annually from such

28  employee's date of retirement from active service until

29  January 1, 1999, equal to 1 percent of such benefit.

30

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  1         (C)  Commencing January 1, 2000, and each January 1

  2  thereafter, the pension benefit due each retired employee or

  3  beneficiary shall be adjusted as follows:

  4         1.  For those retired employees, and beneficiaries

  5  thereof, in Division A, the amount of the monthly pension

  6  benefit due for the 12-month period commencing on the

  7  adjustment date shall be the amount of the retired employee's

  8  or beneficiary's monthly benefit being received on December 31

  9  immediately preceding the adjustment date plus an amount equal

10  to 2 percent of such benefit.

11         2.  For those retired employees, and beneficiaries

12  thereof, in Division B, the amount of the monthly pension

13  benefit due for the 12-month period commencing on the

14  adjustment date shall be the amount of the retired employee's

15  or beneficiary's monthly benefit being received on December 31

16  immediately preceding the adjustment date plus an amount equal

17  to 1 percent of such benefit.

18         Section 6.  Section 18 of chapter 23559, Laws of

19  Florida, 1945, as amended, is amended to read:

20         Section 18.  Physical examination. All persons employed

21  by the City of Tampa after the passage of this act shall be

22  required to pass a physical examination conducted by a duly

23  qualified physician or surgeon, or board of physicians or

24  surgeons, to be selected by the trustees of this fund for that

25  purpose and by said physician or surgeon, or board of

26  physicians or surgeons, found and certified to be mentally and

27  physically qualified for such employment. Those holding

28  employment with the City of Tampa before the passage of this

29  act shall not be required to take a physical examination as

30  before stated. Once he or she has passed the physical

31  examination the employee shall immediately become a member of

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  1  the plan. However, a temporary employee shall not be given a

  2  physical examination until 180 90 days after his or her date

  3  of employment.

  4         Section 7.  Section 20 of chapter 23559, Laws of

  5  Florida, 1945, as amended, is amended to read:

  6         Section 20.  Exemptions. The pensions or other benefits

  7  accrued or accruing to any person under the provisions of this

  8  act, and the accumulated contributions and the cash securities

  9  in the funds created under this act, are hereby exempted from

10  any state, county or municipal tax of the State of Florida,

11  and shall not be subject to execution or attachment or to any

12  legal process whatsoever, and shall be unassignable except

13  that an employee may assign to the Tampa City Employees

14  Federal Credit Union, of which he is a member, his right to a

15  refund of accumulated contributions in the event he resigns or

16  is discharged before becoming qualified for retirement.

17         Section 8.  Section 22 is added to chapter 23559, Laws

18  of Florida, 1945, as amended, to read:

19         Section 22. Deferred Retirement Option Program.

20  Notwithstanding any other provisions of this act, and subject

21  to the provisions of this section, the Deferred Retirement

22  Option Program, hereinafter referred to as the DROP, is an

23  option under which an eligible member may elect, commencing on

24  October 1, 1999, to have the member's pension benefits

25  calculated as of a certain date prior to retirement, and

26  accumulate benefits plus the investment return pursuant to

27  this section during the DROP calculation period. Participation

28  in the DROP does not guarantee employment for the DROP

29  calculation period, as defined in this section.

30

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  1         (A)  Eligibility. In order to be eligible for the DROP

  2  option, the member must meet the following eligibility

  3  criteria:

  4         1.  The member must have attained the age of 55 years

  5  and at least 10 years of continuous service at the time the

  6  member files an election under this section. A member is

  7  eligible for accumulations pursuant to the DROP for a maximum

  8  of 7 years.

  9         2.  The member must meet all eligibility requirements

10  for pension benefits, other than separation from service as an

11  employee of the city.

12         3.  Upon electing to participate in the DROP, the

13  member shall submit on forms required by the city and the

14  board of trustees:

15         a.  An irrevocable written election to participate in

16  the DROP, specifying a DROP benefit calculation date. The DROP

17  benefit calculation date is used to determine the DROP

18  calculation period, which commences on the DROP benefit

19  calculation date and ends on the earlier of the member's

20  separation from service or death;

21         b.  An irrevocable notice of employment termination to

22  take effect upon the expiration of the DROP calculation

23  period; provided that a DROP participant shall not be

24  precluded from voluntarily terminating employment with the

25  city before the expiration of the DROP calculation period, nor

26  shall the city be precluded from terminating such DROP

27  participant's employment as applicable due to disciplinary

28  action, layoff, or other separation in accordance with the

29  applicable collective bargaining agreement, civil service law,

30  or other applicable law;

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  1         c.  A properly completed application for longevity

  2  retirement benefits to be calculated pursuant to section 8 or

  3  section 10 as of the DROP benefit calculation date; and

  4         d.  Any other information required by the board of

  5  trustees.

  6         4.  A member may only make one DROP election during the

  7  member's lifetime.

  8         B.  Status. For pension purposes only:

  9         1.  During the DROP calculation period, there shall be

10  no pension contribution deductions made from the earnings,

11  wages, salary, or compensation earned by the DROP participant.

12         2.  Upon entry into the DROP, a DROP participant shall

13  no longer be entitled to disability retirement benefits

14  pursuant to section 11.

15         3.  Death benefits under the DROP. Upon the death of a

16  DROP participant, the named beneficiary or beneficiaries shall

17  be entitled to receive the benefits accumulated during the

18  DROP calculation period as of the date of death. After the

19  death of such DROP participant, death benefits shall be paid

20  as required by section 12. Eligibility to participate in the

21  DROP terminates upon the death of such DROP participant.

22         4.  A DROP participant shall not be eligible to be

23  elected as a member of the board of trustees during such

24  participant's DROP calculation period.

25         C.  Benefits under the DROP.

26         1.  Effective with the DROP benefit calculation date, a

27  DROP participant's monthly pension installments calculated

28  pursuant to section 8 or section 10, including continuous

29  service, such participant's average monthly salary and the

30  effective date of retirement shall be fixed.

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  1         2.  The DROP accumulation shall be calculated as

  2  follows:

  3         a.  The amount of the monthly installments to which the

  4  member would have been entitled to receive from the DROP

  5  benefit calculation date to the end of the member's DROP

  6  calculation period.

  7         b.  The amount of any cost-of-living adjustments

  8  pursuant to section 13 during the DROP benefit calculation

  9  period.

10         c.  Interest accumulation as set forth in this section.

11         3.  At the conclusion of the member's DROP benefit

12  calculation period, the board of trustees shall distribute the

13  member's benefits, subject to the following provisions:

14         a.  The board of trustees shall receive verification by

15  the city that such DROP participant's employment as an

16  employee of the city has terminated.

17         b.  A terminated DROP participant or, if deceased, such

18  participant's named beneficiary or beneficiaries, shall elect

19  on forms provided by the board of trustees to receive the DROP

20  benefits in accordance with one of the options provided in

21  subparagraph E.1. Once a DROP participant commences

22  distribution under a payment method, or receives a lump sum,

23  no further interest shall be payable to the DROP participant.

24  For a DROP participant or beneficiary who fails to elect a

25  method of payment within 60 days of termination of DROP

26  participation, the board of trustees will pay a lump sum as

27  provided hereafter.

28         D.  Interest and administrative costs. Interest shall

29  accumulate annually at a rate reflecting the fund's net

30  investment performance, whether positive or negative, during

31  the DROP calculation period, less the cost of administering

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  1  the DROP, all of which shall be determined by the board of

  2  trustees.

  3         E.  Payment.

  4         1.  Upon termination of employment with the city, the

  5  accumulated DROP benefits at the option of the terminated DROP

  6  participant, or if deceased, such participant's designated

  7  beneficiary or beneficiaries, shall be distributed to the

  8  extent allowed by law by rollover to another qualified plan,

  9  as a lump sum payment, as a combination of both, or in such

10  other forms as provided by rules and regulations adopted by

11  the board of trustees, provided that such distribution may be

12  adjusted by the board of trustees to maintain Internal Revenue

13  Code qualification of the plan.

14         2.  If a DROP participant dies during the DROP

15  calculation period, or on or before the DROP participant's

16  full DROP accumulation is distributed, any remaining DROP

17  accumulation shall be distributed to the DROP participant's

18  designated beneficiary or beneficiaries, or, if there is no

19  surviving designated beneficiary, to the participant's spouse,

20  or if there is no surviving designated beneficiary and no

21  surviving spouse, to the participants estate. Any such payment

22  shall be made in a lump sum payment, unless the participant

23  had already commenced benefit payment of their DROP

24  accumulation in an optional plan. In such an event, benefits

25  shall continue to be paid pursuant to the optional benefit

26  form selected.

27         3.  The form of distribution elected by a DROP

28  participant or surviving beneficiary must comply with the

29  applicable requirements of the Internal Revenue Code and the

30  regulations adopted thereunder.

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  1         4.  A DROP participant who is involuntarily discharged

  2  who seeks review of such discharge shall not be entitled to

  3  receipt of pension benefits or benefits accumulation while in

  4  the DROP until it has been determined that the discharge was

  5  lawful, or at the expiration of DROP participation provided in

  6  subparagraph (A)1., whichever is first.

  7         5.  The accumulated benefits of any DROP participant,

  8  including any interest thereon, shall not be subject to

  9  assignment, garnishment, execution, attachment, or to any

10  legal process whatsoever, except income deduction orders as

11  provided in s. 61.1301, Florida Statutes, and federal income

12  tax levies.

13         6.  Upon termination from employment with the city the

14  monthly pension installments pursuant to section 8 or section

15  10 and the cost-of-living adjustments pursuant to section 13,

16  shall be paid to the member, and upon death of the member,

17  monthly pension installments shall be paid pursuant to section

18  12 with cost-of-living adjustments pursuant to section 13.

19         F.  Conflict of laws. To the extent that any provision

20  of this section is in conflict with ss. 112.60-112.67, Florida

21  Statutes, that apply to local law plans established by

22  municipal ordinance or special act, or provisions of Florida

23  Statutes made applicable to pension funds established by

24  special act, or to the extent that any provision of this

25  section would result in the loss of tax exempt status of the

26  plan, the board of trustees is hereby delegated the authority

27  to adopt by rule changes to this section in order to comply

28  with said laws, which shall have the force of law and shall be

29  considered part of this act.

30         G.  Administration of program. The board of trustees

31  shall make such rules as are necessary for the effective and

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CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 1999                HB 1101

    583-144A-99






  1  efficient administration of this section, provided that such

  2  rules are not inconsistent with the provisions of this act.

  3  The board of trustees shall not be required to advise members

  4  of the federal tax consequences of an election related to the

  5  DROP but may advise members to seek independent advice.

  6  Notwithstanding any other provision of this section to the

  7  contrary, each provision of this section shall be construed

  8  and administered in such manner that the plan and such program

  9  shall qualify as a qualified governmental pension plan under

10  existing or hereafter enacted provisions of the Internal

11  Revenue Code of the United States and the regulations adopted

12  thereunder, and the board of trustees may adopt any rule

13  necessary to accomplish the purpose of this section as is

14  necessary to retain tax qualification, which rule shall have

15  the force of law and shall be considered part of this act.

16         Section 9.  This act shall take effect upon becoming a

17  law.

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