Bill Text: TX SB640 | 2015-2016 | 84th Legislature | Comm Sub

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Bill Title: Relating to automatic employee participation in and administration of a deferred compensation plan provided by certain hospital districts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2015-04-28 - Committee report printed and distributed [SB640 Detail]

Download: Texas-2015-SB640-Comm_Sub.html

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By: Garcia S.B. No. 640
(In the Senate - Filed February 19, 2015; February 24, 2015,
read first time and referred to Committee on State Affairs;
April 28, 2015, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 8, Nays 1; April 28, 2015,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 640 By: Nelson

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