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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 certain hospital |
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districts. |
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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 609.202 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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CERTAIN HOSPITAL DISTRICT EMPLOYEES |
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Sec. 609.201. APPLICABILITY OF SUBCHAPTER. (a) This |
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subchapter applies only to a hospital district created under |
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general or special law if the district offers a deferred |
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compensation plan to the district's employees under Subchapter B. |
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(b) A hospital district subject to this subchapter may, at |
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the district's option, elect to require automatic employee |
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participation in a deferred compensation plan under Section |
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609.202. |
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Sec. 609.202. AUTOMATIC PARTICIPATION; DEFAULT INVESTMENT |
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PRODUCT. (a) This section applies only to an employee of a |
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hospital district that elects under Section 609.201(b) to require |
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automatic employee participation in a deferred compensation plan |
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under this section. |
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(b) An employee automatically participates in a deferred |
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compensation plan provided by the hospital district unless the |
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employee 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 of the hospital district, elect to end |
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participation in the plan, to contribute to a different investment |
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product, to contribute a different amount to the plan, or to |
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designate all or a portion of the employee's contribution as a Roth |
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contribution subject to the availability of a Roth contribution |
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program. |
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(e) A hospital district to which this subchapter applies |
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shall ensure that, at the time of employment, each employee is |
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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 of the hospital district shall adopt rules to |
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implement the requirements of this section. The rules must ensure |
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that the operation of a deferred compensation plan under this |
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section conforms to the applicable requirements of any federal rule |
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that 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 hospital district shall |
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inform new employees of their automatic enrollment in a deferred |
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compensation plan and their right to opt out of enrollment. Using |
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existing resources, this information must be included as part of |
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the new employee orientation process. The district shall maintain |
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a record of a new employee's acknowledgment of receipt of |
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information regarding the ability to opt out of enrollment in a |
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deferred compensation plan. |
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Sec. 609.203. DISCRETIONARY TRANSFER. (a) A hospital |
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district may transfer an employee's deferred amounts and investment |
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income 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 hospital district is not required to give notice of |
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a 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 hospital 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. 609.204. 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, a hospital district may invest |
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deferred amounts and investment income in a qualified investment |
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product specifically designated by the district for that purpose. |
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Sec. 609.205. CONTRACTS FOR GOODS AND SERVICES. (a) A |
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hospital district may contract for necessary goods and consolidated |
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billing, accounting, and other services to be provided in |
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connection with a deferred compensation plan. |
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(b) In a contract under Subsection (a), the hospital |
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district may provide for periodic audits of the person with whom the |
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contract is 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 hospital district may contract with a private entity |
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to conduct an audit under Subsection (b). |
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SECTION 3. Section 609.202, Government Code, as added by |
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this Act, applies only to an employee of a hospital district subject |
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to that section who initially begins employment on or after January |
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1, 2016. |
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SECTION 4. (a) Except as provided by Subsection (b) of |
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this section, the acts of a hospital district created under general |
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or special law that relate to discretionary transfers of funds and |
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consolidation of billing and accounting for deferred compensation |
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plans provided by the district to the district's employees and that |
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occurred before the effective date of this Act are validated as if |
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the acts had 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. |
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* * * * * |