86R14946 NC-F
By: RodrÃguez S.B. No. 1167
A BILL TO BE ENTITLED
AN ACT
relating to the exemption for certain savings plans from
attachment, execution, or other seizure for a creditor's claim.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 42.0021, Property Code, is amended to
read as follows:
Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS
PLANS. (a) In this section, "qualified savings plan" means
[addition to the exemption prescribed by Section 42.001, a person's
right to the assets held in or to receive payments, whether vested
or not, under] any stock bonus, pension, annuity, deferred
compensation, profit-sharing, health, education, or similar plan
or account, to the extent the plan or account is exempt from federal
income tax or to the extent federal income tax on a person's
interest in the plan or account is deferred until actual payment of
benefits to the person. A plan or account that is subject to
federal income tax is considered to be exempt from federal income
tax for purposes of this section if the plan or account is subject
to the tax solely under Sections 511 through 514, Internal Revenue
Code of 1986. The term includes:
(1) a retirement plan sponsored by a private employer,
government, or church;
(2) [, including] a retirement plan for self-employed
individuals;
(3) [, or] a simplified employee pension plan;
(4) [,] an individual retirement account or
[individual retirement] annuity, including an inherited individual
retirement account or [, individual retirement] annuity;
(5) a [,] Roth IRA, including an [or] inherited Roth
IRA;
(6) [, or] a health savings account;
(7) a Coverdell education savings account;
(8) a plan or account established under Subchapter F,
Chapter 54, Education Code, including a prepaid tuition contract;
(9) a plan or account established under Subchapter G,
Chapter 54, Education Code, including a savings trust account;
(10) a qualified tuition program of any state that
meets the requirements of Section 529, Internal Revenue Code of
1986;
(11) a qualified ABLE program of any state that meets
the requirements of Section 529A, Internal Revenue Code of 1986;
and
(12) an [, and under any] annuity or similar contract
purchased with assets distributed from a [that type of] plan or
account described by this subsection.
(b) In addition to the exemption prescribed by Section
42.001 and except as provided by this section, a person's interest
in and right to receive payments from a qualified savings plan,
whether vested or not, is exempt from attachment, execution, and
seizure for the satisfaction of debts.
(c) An interest or right in a qualified savings plan that
was [to the extent the plan, contract, annuity, or account is exempt
from federal income tax, or to the extent federal income tax on the
person's interest is deferred until actual payment of benefits to
the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A,
457(b), or 501(a), Internal Revenue Code of 1986, including a
government plan or church plan described by Section 414(d) or (e),
Internal Revenue Code of 1986. For purposes of this subsection,
the interest of a person in a plan, annuity, account, or contract]
acquired by reason of the death of another person, whether as an
owner, participant, beneficiary, survivor, coannuitant, heir, or
legatee, is exempt to the same extent that the interest or right of
the decedent [person from whom the plan, annuity, account, or
contract was acquired] was exempt on the date of the decedent's
[person's] death.
(d) [If this subsection is held invalid or preempted by
federal law in whole or in part or in certain circumstances, the
subsection remains in effect in all other respects to the maximum
extent permitted by law.
[(b)] Contributions to a qualified savings plan that are
excess contributions under Section 4973, [an individual retirement
account that exceed the amounts permitted under the applicable
provisions of the] Internal Revenue Code of 1986, and any accrued
earnings on such contributions are not exempt under this section
unless otherwise exempt by law. [Amounts qualifying as nontaxable
rollover contributions under Section 402(a)(5), 403(a)(4),
403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before
January 1, 1993, are treated as exempt amounts under Subsection
(a). Amounts treated as qualified rollover contributions under
Section 408A, Internal Revenue Code of 1986, are treated as exempt
amounts under Subsection (a). In addition, amounts qualifying as
nontaxable rollover contributions under Section 402(c), 402(e)(6),
402(f), 403(a)(4), 403(a)(5), 403(b)(8), 403(b)(10), 408(d)(3), or
408A of the Internal Revenue Code of 1986 on or after January 1,
1993, are treated as exempt amounts under Subsection (a). Amounts
qualifying as nontaxable rollover contributions under Section
223(f)(5) of the Internal Revenue Code of 1986 on or after January
1, 2004, are treated as exempt amounts under Subsection (a).]
(e) [(c)] Amounts distributed from a qualified savings plan
are exempt from attachment, execution, and [plan, annuity, account,
or contract entitled to an exemption under Subsection (a) are not
subject to] seizure for a creditor's claim for 60 days after the
date of distribution. If [if] the amounts qualify as a [nontaxable]
rollover contribution under the Internal Revenue Code of 1986,
whether taxable or nontaxable, the amounts will continue to be
exempt thereafter under this section [Subsection (b)].
(f) A person's interest in a retirement plan that is solely
an unfunded, unsecured promise by an employer to pay deferred
compensation is not exempt under this section unless otherwise
exempt by law.
(g) A person [(d) A participant or beneficiary of a plan,
annuity, account, or contract entitled to an exemption under
Subsection (a), other than an individual retirement account or
individual retirement annuity,] is not prohibited by this section
from granting a valid and enforceable security interest in the
person's interest in or right [participant's or beneficiary's right
to the assets held in or] to receive payments from a qualified
savings plan to the extent permitted by, and in accordance with, the
Internal Revenue Code of 1986 and the terms of the qualified savings
plan [under the exempt plan, annuity, account, or contract] to
secure a loan to the person [participant or beneficiary] from the
qualified savings plan. The person's interest in or right [exempt
plan, annuity, account, or contract, and the right to the assets
held in or] to receive payments from the plan[, annuity, account, or
contract] is subject to attachment, execution, and seizure for the
satisfaction of the security interest or lien granted by the person
[participant or beneficiary] to secure the loan.
(h) [(e)] If any provision of this section is held
[Subsection (a) is declared] invalid or preempted by federal law,
in whole or in part or in certain circumstances, the remaining
provisions of this section remain [as applied to a person who has
not brought a proceeding under Title 11, United States Code, the
subsection remains] in effect, to the maximum extent permitted by
law[, as to any person who has filed that type of proceeding].
(i) [(f)] A reference in this section to the Internal
Revenue Code of 1986 or a specific provision of the Internal Revenue
Code of 1986 includes a subsequent amendment of that code or of the
substance of that provision.
SECTION 2. Section 42.005, Property Code, is amended to
read as follows:
Sec. 42.005. CHILD SUPPORT LIENS. (a) Except as provided
by Subsection (b), Sections 42.001, 42.002, and 42.0021 [of this
code] do not apply to a child support lien established under
Subchapter G, Chapter 157, Family Code.
(b) The exemption from attachment, execution, and seizure
for the satisfaction of debts provided under Section 42.0021 for a
plan or account described by Section 42.0021(a)(8), (9), or (10)
applies to a child support lien established under Subchapter G,
Chapter 157, Family Code.
SECTION 3. Section 42.0022, Property Code, is repealed.
SECTION 4. The changes in law made by this Act do not apply
to property that is, as of the effective date of this Act, subject
to a voluntary bankruptcy proceeding or to a valid claim of a holder
of a final judgment who has, by levy, garnishment, or other legal
process, obtained rights superior to those that would otherwise be
held by a trustee in bankruptcy if a bankruptcy petition were then
pending against the debtor. That property is subject to the law as
it existed immediately before the effective date of this Act, and
the prior law is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2019.