Texas 2015 - 84th Regular

Texas Senate Bill SB640 Compare Versions

Version 1 (Old)

Version 2 (New)

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1	1	By: Garcia S.B. No. 640
2	2	(In the Senate - Filed February 19, 2015; February 24, 2015,
3	3	read first time and referred to Committee on State Affairs;
4	4	April 28, 2015, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 8, Nays 1; April 28, 2015,
6	6	sent to printer.)
7	7	Click here to see the committee vote
8	8	COMMITTEE SUBSTITUTE FOR S.B. No. 640 By: Nelson
9	9
10	10
11	11	A BILL TO BE ENTITLED
12	12	AN ACT
13	13	relating to automatic employee participation in and administration
14	14	of a deferred compensation plan provided by certain hospital
15	15	districts.
16	16	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17	17	SECTION 1. Section 609.007(c), Government Code, is amended
18	18	to read as follows:
19	19	(c) Except as provided by Section 609.202 or 609.5025, to
20	20	participate in a deferred compensation plan, an employee must
21	21	consent in the contract to automatic payroll deductions in an
22	22	amount equal to the deferred amount.
23	23	SECTION 2. Chapter 609, Government Code, is amended by
24	24	adding Subchapter B-1 to read as follows:
25	25	SUBCHAPTER B-1. PARTICIPATION IN DEFERRED COMPENSATION PLAN BY
26	26	CERTAIN HOSPITAL DISTRICT EMPLOYEES
27	27	Sec. 609.201. APPLICABILITY OF SUBCHAPTER. (a) This
28	28	subchapter applies only to a hospital district created under
29	29	general or special law if the district offers a deferred
30	30	compensation plan to the district's employees under Subchapter B.
31	31	(b) A hospital district subject to this subchapter may, at
32	32	the district's option, elect to require automatic employee
33	33	participation in a deferred compensation plan under Section
34	34	609.202.
35	35	Sec. 609.202. AUTOMATIC PARTICIPATION; DEFAULT INVESTMENT
36	36	PRODUCT. (a) This section applies only to an employee of a
37	37	hospital district that elects under Section 609.201(b) to require
38	38	automatic employee participation in a deferred compensation plan
39	39	under this section.
40	40	(b) An employee automatically participates in a deferred
41	41	compensation plan provided by the hospital district unless the
42	42	employee affirmatively elects not to participate in the plan.
43	43	Notwithstanding Sections 609.007(a) and (c), an employee is not
44	44	required to affirmatively contract for and consent to participation
45	45	in a plan under this section.
46	46	(c) An employee participating in a deferred compensation
47	47	plan under this section makes a contribution of one percent of the
48	48	compensation earned by the employee to a default investment product
49	49	selected by the plan administrator based on the criteria
50	50	established under Section 609.113 and the rules adopted under
51	51	Subsection (f). The contribution is made by automatic payroll
52	52	deduction.
53	53	(d) At any time, an employee participating in a deferred
54	54	compensation plan under this section may, in accordance with rules
55	55	adopted by the board of the hospital district, elect to end
56	56	participation in the plan, to contribute to a different investment
57	57	product, to contribute a different amount to the plan, or to
58	58	designate all or a portion of the employee's contribution as a Roth
59	59	contribution subject to the availability of a Roth contribution
60	60	program.
61	61	(e) A hospital district to which this subchapter applies
62	62	shall ensure that, at the time of employment, each employee is
63	63	informed of:
64	64	(1) the elections the employee may make under this
65	65	section; and
66	66	(2) the responsibilities of the employee under Section
67	67	609.010.
68	68	(f) The board of the hospital district shall adopt rules to
69	69	implement the requirements of this section. The rules must ensure
70	70	that the operation of a deferred compensation plan under this
71	71	section conforms to the applicable requirements of any federal rule
72	72	that provides fiduciary relief for investments in qualified default
73	73	investment alternatives or otherwise governs default investment
74	74	alternatives under participant-directed individual account plans.
75	75	(g) The amount deducted under this section from an
76	76	employee's compensation is not deducted for payment of a debt and
77	77	the automatic payroll deduction is not garnishment or assignment of
78	78	wages.
79	79	(h) Using existing resources, the hospital district shall
80	80	inform new employees of their automatic enrollment in a deferred
81	81	compensation plan and their right to opt out of enrollment. Using
82	82	existing resources, this information must be included as part of
83	83	the new employee orientation process. The district shall maintain
84	84	a record of a new employee's acknowledgment of receipt of
85	85	information regarding the ability to opt out of enrollment in a
86	86	deferred compensation plan.
87	87	Sec. 609.203. DISCRETIONARY TRANSFER. (a) A hospital
88	88	district may transfer an employee's deferred amounts and investment
89	89	income from a qualified investment product to the trust fund of the
90	90	deferred compensation plan in which the employee participates if
91	91	the district determines that the transfer is in the best interest of
92	92	the plan and the employee.
93	93	(b) The hospital district is not required to give notice of
94	94	a transfer under Subsection (a) to the employee before the transfer
95	95	occurs.
96	96	(c) Promptly after a transfer under Subsection (a) occurs,
97	97	the hospital district shall give to the employee a notice that:
98	98	(1) states the reason for the transfer; and
99	99	(2) requests that the employee promptly designate
100	100	another qualified investment product to receive the transferred
101	101	amount.
102	102	Sec. 609.204. ALTERNATIVE TO FUND DEPOSIT. Instead of
103	103	depositing deferred amounts and investment income in the trust fund
104	104	of the deferred compensation plan, a hospital district may invest
105	105	deferred amounts and investment income in a qualified investment
106	106	product specifically designated by the district for that purpose.
107	107	Sec. 609.205. CONTRACTS FOR GOODS AND SERVICES. (a) A
108	108	hospital district may contract for necessary goods and consolidated
109	109	billing, accounting, and other services to be provided in
110	110	connection with a deferred compensation plan.
111	111	(b) In a contract under Subsection (a), the hospital
112	112	district may provide for periodic audits of the person with whom the
113	113	contract is made. An audit may cover:
114	114	(1) the proper handling and accounting of public or
115	115	trust funds; and
116	116	(2) other matters related to the proper performance of
117	117	the contract.
118	118	(c) The hospital district may contract with a private entity
119	119	to conduct an audit under Subsection (b).
120	120	SECTION 3. Section 609.202, Government Code, as added by
121	121	this Act, applies only to an employee of a hospital district subject
122	122	to that section who initially begins employment on or after January
123	123	1, 2016.
124	124	SECTION 4. (a) Except as provided by Subsection (b) of
125	125	this section, the acts of a hospital district created under general
126	126	or special law that relate to discretionary transfers of funds and
127	127	consolidation of billing and accounting for deferred compensation
128	128	plans provided by the district to the district's employees and that
129	129	occurred before the effective date of this Act are validated as if
130	130	the acts had occurred as authorized by law.
131	131	(b) This section does not validate an act that, under the
132	132	law of this state at the time the act occurred, was a misdemeanor or
133	133	felony.
134	134	SECTION 5. This Act takes effect immediately if it receives
135	135	a vote of two-thirds of all the members elected to each house, as
136	136	provided by Section 39, Article III, Texas Constitution. If this
137	137	Act does not receive the vote necessary for immediate effect, this
138	138	Act takes effect September 1, 2015.
139	139	* * * * *