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A BILL TO BE ENTITLED
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AN ACT
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relating to automatic employee participation in and administration |
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of a deferred compensation plan provided by the Harris County |
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Hospital District. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 609.007(c), Government Code, is amended |
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to read as follows: |
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(c) Except as provided by Section 609.203 or 609.5025, to |
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participate in a deferred compensation plan, an employee must |
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consent in the contract to automatic payroll deductions in an |
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amount equal to the deferred amount. |
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SECTION 2. Chapter 609, Government Code, is amended by |
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adding Subchapter B-1 to read as follows: |
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SUBCHAPTER B-1. PARTICIPATION IN DEFERRED COMPENSATION PLAN BY |
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HARRIS COUNTY HOSPITAL DISTRICT EMPLOYEES |
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Sec. 609.201. DEFINITIONS. In this subchapter: |
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(1) "Board" means the board of hospital managers of |
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the Harris County Hospital District. |
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(2) "District" means the Harris County Hospital |
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District. |
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Sec. 609.202. APPLICABILITY OF SUBCHAPTER. This subchapter |
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applies only to the Harris County Hospital District if the district |
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offers a deferred compensation plan to the district's employees |
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under Subchapter B. |
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Sec. 609.203. AUTOMATIC PARTICIPATION; DEFAULT INVESTMENT |
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PRODUCT. (a) This section applies only to an employee of the |
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district. |
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(b) An employee automatically participates in a deferred |
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compensation plan provided by the district unless the employee |
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affirmatively elects not to participate in the plan. |
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Notwithstanding Sections 609.007(a) and (c), an employee is not |
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required to affirmatively contract for and consent to participation |
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in a plan under this section. |
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(c) An employee participating in a deferred compensation |
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plan under this section makes a contribution of one percent of the |
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compensation earned by the employee to a default investment product |
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selected by the plan administrator based on the criteria |
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established under Section 609.113 and the rules adopted under |
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Subsection (f). The contribution is made by automatic payroll |
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deduction. |
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(d) At any time, an employee participating in a deferred |
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compensation plan under this section may, in accordance with rules |
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adopted by the board, elect to end participation in the plan, to |
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contribute to a different investment product, to contribute a |
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different amount to the plan, or to designate all or a portion of |
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the employee's contribution as a Roth contribution subject to the |
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availability of a Roth contribution program. |
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(e) The district shall ensure that, at the time of |
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employment, each employee is informed of: |
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(1) the elections the employee may make under this |
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section; and |
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(2) the responsibilities of the employee under Section |
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609.010. |
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(f) The board shall adopt rules to implement the |
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requirements of this section. The rules must ensure that the |
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operation of a deferred compensation plan under this section |
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conforms to the applicable requirements of any federal rule that |
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provides fiduciary relief for investments in qualified default |
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investment alternatives or otherwise governs default investment |
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alternatives under participant-directed individual account plans. |
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(g) The amount deducted under this section from an |
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employee's compensation is not deducted for payment of a debt and |
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the automatic payroll deduction is not garnishment or assignment of |
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wages. |
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(h) Using existing resources, the district shall inform new |
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employees of their automatic enrollment in a deferred compensation |
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plan and their right to opt out of enrollment. Using existing |
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resources, this information must be included as part of the new |
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employee orientation process. The district shall maintain a record |
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of a new employee's acknowledgement of receipt of information |
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regarding the ability to opt out of enrollment in a deferred |
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compensation plan. |
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Sec. 609.204. DISCRETIONARY TRANSFER. (a) The district |
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may transfer an employee's deferred amounts and investment income |
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from a qualified investment product to the trust fund of the |
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deferred compensation plan in which the employee participates if |
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the district determines that the transfer is in the best interest of |
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the plan and the employee. |
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(b) The district is not required to give notice of a |
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transfer under Subsection (a) to the employee before the transfer |
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occurs. |
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(c) Promptly after a transfer under Subsection (a) occurs, |
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the district shall give to the employee a notice that: |
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(1) states the reason for the transfer; and |
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(2) requests that the employee promptly designate |
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another qualified investment product to receive the transferred |
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amount. |
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Sec. 609.205. ALTERNATIVE TO FUND DEPOSIT. Instead of |
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depositing deferred amounts and investment income in the trust fund |
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of the deferred compensation plan, the district may invest deferred |
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amounts and investment income in a qualified investment product |
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specifically designated by the district for that purpose. |
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Sec. 609.206. CONTRACTS FOR GOODS AND SERVICES. (a) The |
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district may contract for necessary goods and consolidated billing, |
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accounting, and other services to be provided in connection with a |
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deferred compensation plan. |
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(b) In a contract under Subsection (a), the district may |
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provide for periodic audits of the person with whom the contract is |
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made. An audit may cover: |
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(1) the proper handling and accounting of public or |
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trust funds; and |
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(2) other matters related to the proper performance of |
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the contract. |
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(c) The district may contract with a private entity to |
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conduct an audit under Subsection (b). |
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SECTION 3. Section 609.203, Government Code, as added by |
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this Act, applies only to an employee of the Harris County Hospital |
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District who initially begins employment on or after January 1, |
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2016. |
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SECTION 4. (a) Except as provided by Subsection (b) of this |
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section, the acts of the Harris County Hospital District that |
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relate to discretionary transfers of funds and consolidation of |
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billing and accounting for deferred compensation plans provided by |
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the district to the district's employees and that occurred before |
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the effective date of this Act are validated as if the acts had |
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occurred as authorized by law. |
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(b) This section does not validate an act that, under the |
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law of this state at the time the act occurred, was a misdemeanor or |
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felony. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |