83R13856 KFF-F
By: Callegari H.B. No. 1804
Substitute the following for H.B. No. 1804:
By: Callegari C.S.H.B. No. 1804
A BILL TO BE ENTITLED
AN ACT
relating to the authority of political subdivisions to offer
certain deferred compensation plans to employees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 609.006(a), Government Code, is amended
to read as follows:
(a) A deferred compensation plan must conform to federal law
to provide that deferred amounts and investment income are not
includable, for federal income tax purposes, in the gross income of
a participating employee until distributed to the employee, subject
to the employee's option to designate or convert all or a portion of
deferred amounts as or to Roth contributions under Section 609.1025
or 609.5021, as applicable, the federal income tax treatment of
which is governed by Section 402A, Internal Revenue Code of 1986.
SECTION 2. Subchapter B, Chapter 609, Government Code, is
amended by adding Section 609.1025 to read as follows:
Sec. 609.1025. ROTH CONTRIBUTION PROGRAMS. A political
subdivision may:
(1) establish a qualified Roth contribution program in
accordance with Section 402A, Internal Revenue Code of 1986, under
which an employee may:
(A) designate all or a portion of the employee's
contribution under a 401(k) plan as a Roth contribution at the time
the contribution is made; or
(B) convert all or a portion of the employee's
previous contribution under the plan to a Roth contribution; and
(2) if authorized by federal law, establish a program
in accordance with the applicable federal law under which an
employee may:
(A) designate all or a portion of the employee's
contribution under a 457 plan as a Roth contribution at the time the
contribution is made; or
(B) convert all or a portion of the employee's
previous contribution under the plan to a Roth contribution.
SECTION 3. Subchapter B, Chapter 609, Government Code, is
amended by adding Section 609.1175 to read as follows:
Sec. 609.1175. LOANS UNDER 457 PLAN. The plan
administrator of a 457 plan may develop and implement procedures to
efficiently administer a program under the plan that allows a
qualified vendor to lend money to a participating employee.
SECTION 4. (a) The legislature validates an act taken
before the effective date of this Act by a political subdivision to
establish and administer:
(1) a qualified Roth contribution program in
accordance with Section 402A, Internal Revenue Code of 1986;
(2) a program in accordance with federal law under
which an employee may designate or convert all or a portion of the
employee's contribution under a 457 plan as or to a Roth
contribution at the time the contribution is made; or
(3) a loan program under a 457 plan.
(b) Subsection (a) of this section does not apply to a
matter that on the effective date of this Act:
(1) is involved in litigation, if the litigation
ultimately results in the matter being held invalid by a final court
judgment; or
(2) has been held invalid by a final court judgment.
SECTION 5. 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, 2013.