Bill Text: TX HB2477 | 2019-2020 | 86th Legislature | Enrolled
Bill Title: Relating to automatic employee participation in and administration of a deferred compensation plan provided by certain hospital districts.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2019-06-14 - Effective immediately [HB2477 Detail]
Download: Texas-2019-HB2477-Enrolled.html
H.B. No. 2477 |
|
||
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 three 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, or its designee, | ||
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, or its designee, | ||
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, 2020. | ||
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, 2019. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 2477 was passed by the House on April | ||
12, 2019, by the following vote: Yeas 140, Nays 3, 2 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 2477 on May 23, 2019, by the following vote: Yeas 142, Nays 0, | ||
1 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 2477 was passed by the Senate, with | ||
amendments, on May 19, 2019, by the following vote: Yeas 24, Nays | ||
7. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |