Texas 2019 - 86th Regular

Texas Senate Bill SB1167 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R14946 NC-F
2	2	By: Rodríguez S.B. No. 1167
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the exemption for certain savings plans from
8	8	attachment, execution, or other seizure for a creditor's claim.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 42.0021, Property Code, is amended to
11	11	read as follows:
12	12	Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS
13	13	PLANS. (a) In this section, "qualified savings plan" means
14	14	[addition to the exemption prescribed by Section 42.001, a person's
15	15	right to the assets held in or to receive payments, whether vested
16	16	or not, under] any stock bonus, pension, annuity, deferred
17	17	compensation, profit-sharing, health, education, or similar plan
18	18	or account, to the extent the plan or account is exempt from federal
19	19	income tax or to the extent federal income tax on a person's
20	20	interest in the plan or account is deferred until actual payment of
21	21	benefits to the person. A plan or account that is subject to
22	22	federal income tax is considered to be exempt from federal income
23	23	tax for purposes of this section if the plan or account is subject
24	24	to the tax solely under Sections 511 through 514, Internal Revenue
25	25	Code of 1986. The term includes:
26	26	(1) a retirement plan sponsored by a private employer,
27	27	government, or church;
28	28	(2) [, including] a retirement plan for self-employed
29	29	individuals;
30	30	(3) [, or] a simplified employee pension plan;
31	31	(4) [,] an individual retirement account or
32	32	[individual retirement] annuity, including an inherited individual
33	33	retirement account or [, individual retirement] annuity;
34	34	(5) a [,] Roth IRA, including an [or] inherited Roth
35	35	IRA;
36	36	(6) [, or] a health savings account;
37	37	(7) a Coverdell education savings account;
38	38	(8) a plan or account established under Subchapter F,
39	39	Chapter 54, Education Code, including a prepaid tuition contract;
40	40	(9) a plan or account established under Subchapter G,
41	41	Chapter 54, Education Code, including a savings trust account;
42	42	(10) a qualified tuition program of any state that
43	43	meets the requirements of Section 529, Internal Revenue Code of
44	44	1986;
45	45	(11) a qualified ABLE program of any state that meets
46	46	the requirements of Section 529A, Internal Revenue Code of 1986;
47	47	and
48	48	(12) an [, and under any] annuity or similar contract
49	49	purchased with assets distributed from a [that type of] plan or
50	50	account described by this subsection.
51	51	(b) In addition to the exemption prescribed by Section
52	52	42.001 and except as provided by this section, a person's interest
53	53	in and right to receive payments from a qualified savings plan,
54	54	whether vested or not, is exempt from attachment, execution, and
55	55	seizure for the satisfaction of debts.
56	56	(c) An interest or right in a qualified savings plan that
57	57	was [to the extent the plan, contract, annuity, or account is exempt
58	58	from federal income tax, or to the extent federal income tax on the
59	59	person's interest is deferred until actual payment of benefits to
60	60	the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A,
61	61	457(b), or 501(a), Internal Revenue Code of 1986, including a
62	62	government plan or church plan described by Section 414(d) or (e),
63	63	Internal Revenue Code of 1986. For purposes of this subsection,
64	64	the interest of a person in a plan, annuity, account, or contract]
65	65	acquired by reason of the death of another person, whether as an
66	66	owner, participant, beneficiary, survivor, coannuitant, heir, or
67	67	legatee, is exempt to the same extent that the interest or right of
68	68	the decedent [person from whom the plan, annuity, account, or
69	69	contract was acquired] was exempt on the date of the decedent's
70	70	[person's] death.
71	71	(d) [If this subsection is held invalid or preempted by
72	72	federal law in whole or in part or in certain circumstances, the
73	73	subsection remains in effect in all other respects to the maximum
74	74	extent permitted by law.
75	75	[(b)] Contributions to a qualified savings plan that are
76	76	excess contributions under Section 4973, [an individual retirement
77	77	account that exceed the amounts permitted under the applicable
78	78	provisions of the] Internal Revenue Code of 1986, and any accrued
79	79	earnings on such contributions are not exempt under this section
80	80	unless otherwise exempt by law. [Amounts qualifying as nontaxable
81	81	rollover contributions under Section 402(a)(5), 403(a)(4),
82	82	403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before
83	83	January 1, 1993, are treated as exempt amounts under Subsection
84	84	(a). Amounts treated as qualified rollover contributions under
85	85	Section 408A, Internal Revenue Code of 1986, are treated as exempt
86	86	amounts under Subsection (a). In addition, amounts qualifying as
87	87	nontaxable rollover contributions under Section 402(c), 402(e)(6),
88	88	402(f), 403(a)(4), 403(a)(5), 403(b)(8), 403(b)(10), 408(d)(3), or
89	89	408A of the Internal Revenue Code of 1986 on or after January 1,
90	90	1993, are treated as exempt amounts under Subsection (a). Amounts
91	91	qualifying as nontaxable rollover contributions under Section
92	92	223(f)(5) of the Internal Revenue Code of 1986 on or after January
93	93	1, 2004, are treated as exempt amounts under Subsection (a).]
94	94	(e) [(c)] Amounts distributed from a qualified savings plan
95	95	are exempt from attachment, execution, and [plan, annuity, account,
96	96	or contract entitled to an exemption under Subsection (a) are not
97	97	subject to] seizure for a creditor's claim for 60 days after the
98	98	date of distribution. If [if] the amounts qualify as a [nontaxable]
99	99	rollover contribution under the Internal Revenue Code of 1986,
100	100	whether taxable or nontaxable, the amounts will continue to be
101	101	exempt thereafter under this section [Subsection (b)].
102	102	(f) A person's interest in a retirement plan that is solely
103	103	an unfunded, unsecured promise by an employer to pay deferred
104	104	compensation is not exempt under this section unless otherwise
105	105	exempt by law.
106	106	(g) A person [(d) A participant or beneficiary of a plan,
107	107	annuity, account, or contract entitled to an exemption under
108	108	Subsection (a), other than an individual retirement account or
109	109	individual retirement annuity,] is not prohibited by this section
110	110	from granting a valid and enforceable security interest in the
111	111	person's interest in or right [participant's or beneficiary's right
112	112	to the assets held in or] to receive payments from a qualified
113	113	savings plan to the extent permitted by, and in accordance with, the
114	114	Internal Revenue Code of 1986 and the terms of the qualified savings
115	115	plan [under the exempt plan, annuity, account, or contract] to
116	116	secure a loan to the person [participant or beneficiary] from the
117	117	qualified savings plan. The person's interest in or right [exempt
118	118	plan, annuity, account, or contract, and the right to the assets
119	119	held in or] to receive payments from the plan[, annuity, account, or
120	120	contract] is subject to attachment, execution, and seizure for the
121	121	satisfaction of the security interest or lien granted by the person
122	122	[participant or beneficiary] to secure the loan.
123	123	(h) [(e)] If any provision of this section is held
124	124	[Subsection (a) is declared] invalid or preempted by federal law,
125	125	in whole or in part or in certain circumstances, the remaining
126	126	provisions of this section remain [as applied to a person who has
127	127	not brought a proceeding under Title 11, United States Code, the
128	128	subsection remains] in effect, to the maximum extent permitted by
129	129	law[, as to any person who has filed that type of proceeding].
130	130	(i) [(f)] A reference in this section to the Internal
131	131	Revenue Code of 1986 or a specific provision of the Internal Revenue
132	132	Code of 1986 includes a subsequent amendment of that code or of the
133	133	substance of that provision.
134	134	SECTION 2. Section 42.005, Property Code, is amended to
135	135	read as follows:
136	136	Sec. 42.005. CHILD SUPPORT LIENS. (a) Except as provided
137	137	by Subsection (b), Sections 42.001, 42.002, and 42.0021 [of this
138	138	code] do not apply to a child support lien established under
139	139	Subchapter G, Chapter 157, Family Code.
140	140	(b) The exemption from attachment, execution, and seizure
141	141	for the satisfaction of debts provided under Section 42.0021 for a
142	142	plan or account described by Section 42.0021(a)(8), (9), or (10)
143	143	applies to a child support lien established under Subchapter G,
144	144	Chapter 157, Family Code.
145	145	SECTION 3. Section 42.0022, Property Code, is repealed.
146	146	SECTION 4. The changes in law made by this Act do not apply
147	147	to property that is, as of the effective date of this Act, subject
148	148	to a voluntary bankruptcy proceeding or to a valid claim of a holder
149	149	of a final judgment who has, by levy, garnishment, or other legal
150	150	process, obtained rights superior to those that would otherwise be
151	151	held by a trustee in bankruptcy if a bankruptcy petition were then
152	152	pending against the debtor. That property is subject to the law as
153	153	it existed immediately before the effective date of this Act, and
154	154	the prior law is continued in effect for that purpose.
155	155	SECTION 5. This Act takes effect September 1, 2019.