Texas 2019 - 86th Regular

Texas Senate Bill SB1196 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	86R10365 KFF-F
1	2		By: Miles S.B. No. 1196
2		-	(In the Senate - Filed February 27, 2019; March 7, 2019,
3		-	read first time and referred to Committee on Intergovernmental
4		-	Relations; April 11, 2019, reported adversely, with favorable
5		-	Committee Substitute by the following vote: Yeas 7, Nays 0;
6		-	April 11, 2019, sent to printer.)
7		-	Click here to see the committee vote
8		-	COMMITTEE SUBSTITUTE FOR S.B. No. 1196 By: Menéndez
9	3
10	4
11	5		A BILL TO BE ENTITLED
12	6		AN ACT
13	7		relating to automatic employee participation in and administration
14	8		of a deferred compensation plan provided by certain hospital
15	9		districts.
16	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17	11		SECTION 1. Section 609.007(c), Government Code, is amended
18	12		to read as follows:
19	13		(c) Except as provided by Section 609.202 or 609.5025, to
20	14		participate in a deferred compensation plan, an employee must
21	15		consent in the contract to automatic payroll deductions in an
22	16		amount equal to the deferred amount.
23	17		SECTION 2. Chapter 609, Government Code, is amended by
24	18		adding Subchapter B-1 to read as follows:
25	19		SUBCHAPTER B-1. PARTICIPATION IN DEFERRED COMPENSATION PLAN BY
26	20		CERTAIN HOSPITAL DISTRICT EMPLOYEES
27	21		Sec. 609.201. APPLICABILITY OF SUBCHAPTER. (a) This
28	22		subchapter applies only to a hospital district created under
29	23		general or special law if the district offers a deferred
30	24		compensation plan to the district's employees under Subchapter B.
31	25		(b) A hospital district subject to this subchapter may, at
32	26		the district's option, elect to require automatic employee
33	27		participation in a deferred compensation plan under Section
34	28		609.202.
35	29		Sec. 609.202. AUTOMATIC PARTICIPATION; DEFAULT INVESTMENT
36	30		PRODUCT. (a) This section applies only to an employee of a
37	31		hospital district that elects under Section 609.201(b) to require
38	32		automatic employee participation in a deferred compensation plan
39	33		under this section.
40	34		(b) An employee automatically participates in a deferred
41	35		compensation plan provided by the hospital district unless the
42	36		employee affirmatively elects not to participate in the plan.
43	37		Notwithstanding Sections 609.007(a) and (c), an employee is not
44	38		required to affirmatively contract for and consent to participation
45	39		in a plan under this section.
46	40		(c) An employee participating in a deferred compensation
47	41		plan under this section makes a contribution of three percent of the
48	42		compensation earned by the employee to a default investment product
49	43		selected by the plan administrator based on the criteria
50	44		established under Section 609.113 and the rules adopted under
51	45		Subsection (f). The contribution is made by automatic payroll
52	46		deduction.
53	47		(d) At any time, an employee participating in a deferred
54	48		compensation plan under this section may, in accordance with rules
55		-	adopted by the board of the hospital district, ~~or its designee,~~
56		-	~~elect to end~~ participation in the plan, to contribute to a different
57		-	~~investment~~ product, to contribute a different amount to the plan,
58		-	~~or to~~ designate all or a portion of the employee's contribution as a
59		-	~~Roth~~ contribution subject to the availability of a Roth
60		-	~~contribution~~ program.
	49	+	adopted by the board of the hospital district, elect to end
	50	+	participation in the plan, to contribute to a different investment
	51	+	product, to contribute a different amount to the plan, or to
	52	+	designate all or a portion of the employee's contribution as a Roth
	53	+	contribution subject to the availability of a Roth contribution
	54	+	program.
61	55		(e) A hospital district to which this subchapter applies
62	56		shall ensure that, at the time of employment, each employee is
63	57		informed of:
64	58		(1) the elections the employee may make under this
65	59		section; and
66	60		(2) the responsibilities of the employee under Section
67	61		609.010.
68		-	(f) The board of the hospital district, or its designee,
69		-	shall adopt rules to implement the requirements of this section.
70		-	The rules must ensure that the operation of a deferred compensation
71		-	plan under this section conforms to the applicable requirements of
72		-	any federal rule that provides fiduciary relief for investments in
73		-	qualified default investment alternatives or otherwise governs
74		-	default investment alternatives under participant-directed
75		-	individual account plans.
	62	+	(f) The board of the hospital district shall adopt rules to
	63	+	implement the requirements of this section. The rules must ensure
	64	+	that the operation of a deferred compensation plan under this
	65	+	section conforms to the applicable requirements of any federal rule
	66	+	that provides fiduciary relief for investments in qualified default
	67	+	investment alternatives or otherwise governs default investment
	68	+	alternatives under participant-directed individual account plans.
76	69		(g) The amount deducted under this section from an
77	70		employee's compensation is not deducted for payment of a debt and
78	71		the automatic payroll deduction is not garnishment or assignment of
79	72		wages.
80	73		(h) Using existing resources, the hospital district shall
81	74		inform new employees of their automatic enrollment in a deferred
82	75		compensation plan and their right to opt out of enrollment. Using
83	76		existing resources, this information must be included as part of
84	77		the new employee orientation process. The district shall maintain
85	78		a record of a new employee's acknowledgment of receipt of
86	79		information regarding the ability to opt out of enrollment in a
87	80		deferred compensation plan.
88	81		Sec. 609.203. DISCRETIONARY TRANSFER. (a) A hospital
89	82		district may transfer an employee's deferred amounts and investment
90	83		income from a qualified investment product to the trust fund of the
91	84		deferred compensation plan in which the employee participates if
92	85		the district determines that the transfer is in the best interest of
93	86		the plan and the employee.
94	87		(b) The hospital district is not required to give notice of
95	88		a transfer under Subsection (a) to the employee before the transfer
96	89		occurs.
97	90		(c) Promptly after a transfer under Subsection (a) occurs,
98	91		the hospital district shall give to the employee a notice that:
99	92		(1) states the reason for the transfer; and
100	93		(2) requests that the employee promptly designate
101	94		another qualified investment product to receive the transferred
102	95		amount.
103	96		Sec. 609.204. ALTERNATIVE TO FUND DEPOSIT. Instead of
104	97		depositing deferred amounts and investment income in the trust fund
105	98		of the deferred compensation plan, a hospital district may invest
106	99		deferred amounts and investment income in a qualified investment
107	100		product specifically designated by the district for that purpose.
108	101		Sec. 609.205. CONTRACTS FOR GOODS AND SERVICES. (a) A
109	102		hospital district may contract for necessary goods and consolidated
110	103		billing, accounting, and other services to be provided in
111	104		connection with a deferred compensation plan.
112	105		(b) In a contract under Subsection (a), the hospital
113	106		district may provide for periodic audits of the person with whom the
114	107		contract is made. An audit may cover:
115	108		(1) the proper handling and accounting of public or
116	109		trust funds; and
117	110		(2) other matters related to the proper performance of
118	111		the contract.
119	112		(c) The hospital district may contract with a private entity
120	113		to conduct an audit under Subsection (b).
121	114		SECTION 3. Section 609.202, Government Code, as added by
122	115		this Act, applies only to an employee of a hospital district subject
123	116		to that section who initially begins employment on or after January
124	117		1, 2020.
125	118		SECTION 4. (a) Except as provided by Subsection (b) of this
126	119		section, the acts of a hospital district created under general or
127	120		special law that relate to discretionary transfers of funds and
128	121		consolidation of billing and accounting for deferred compensation
129	122		plans provided by the district to the district's employees and that
130	123		occurred before the effective date of this Act are validated as if
131	124		the acts had occurred as authorized by law.
132	125		(b) This section does not validate an act that, under the
133	126		law of this state at the time the act occurred, was a misdemeanor or
134	127		felony.
135	128		SECTION 5. This Act takes effect immediately if it receives
136	129		a vote of two-thirds of all the members elected to each house, as
137	130		provided by Section 39, Article III, Texas Constitution. If this
138	131		Act does not receive the vote necessary for immediate effect, this
139	132		Act takes effect September 1, 2019.
140		-	* * * * *