(a) §844.703 of the Texas Government Code provides that the board may establish criteria for the circumstances under which a subdivision's prior service contribution rate must be based on an amortization period shorter than the standard amortization period approved by the board.
(b) If the system determines that the following conditions apply to a newly participating subdivision, then, if approved by the director and recommended by the System's actuary, the prior service contribution rate must be based on an amortization period of five years. The conditions are:
  (1) The subdivision has five or fewer employees; and
  (2) All the employees will be eligible to retire within five years of the subdivision's participation date.
(c) If conditions other than those listed in subsection (b) of this section exist that cause the subdivision's prior service contribution rate based on the standard amortization period to be an unreasonable method of funding the prior service contributions, then the board must approve any special amortization period recommended by the system's actuary.

Source Note: The provisions of this §107.18 adopted to be effective April 30, 2015, 40 TexReg 2281