Bill Text: TX HB2779 | 2019-2020 | 86th Legislature | Enrolled


Bill Title: Relating to the exemption for certain savings plans from attachment, execution, or other seizure for a creditor's claim.

Spectrum: Bipartisan Bill

Status: (Passed) 2019-05-31 - Effective on 9/1/19 [HB2779 Detail]

Download: Texas-2019-HB2779-Enrolled.html
 
 
  H.B. No. 2779
 
 
 
 
AN ACT
  relating to the exemption for certain savings plans from
  attachment, execution, or other seizure for a creditor's claim.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 42.0021, Property Code, is amended to
  read as follows:
         Sec. 42.0021.  ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS
  PLANS. (a)  In this section, "qualified savings plan" means
  [addition to the exemption prescribed by Section 42.001, a person's
  right to the assets held in or to receive payments, whether vested
  or not, under] any stock bonus, pension, annuity, deferred
  compensation, profit-sharing, health, education, or similar plan
  or account, to the extent the plan or account is exempt from federal
  income tax or to the extent federal income tax on a person's
  interest in the plan or account is deferred until actual payment of
  benefits to the person. A plan or account that is subject to
  federal income tax is considered to be exempt from federal income
  tax for purposes of this section if the plan or account is subject
  to the tax solely under Sections 511 through 514, Internal Revenue
  Code of 1986.  The term includes:
               (1)  a retirement plan sponsored by a private employer,
  government, or church;
               (2)  [, including] a retirement plan for self-employed
  individuals;
               (3)  [, or] a simplified employee pension plan;
               (4)  [,] an individual retirement account or
  [individual retirement] annuity, including an inherited individual
  retirement account or [, individual retirement] annuity;
               (5)  a [,] Roth IRA, including an [or] inherited Roth
  IRA;
               (6)  [, or] a health savings account;
               (7)  a Coverdell education savings account;
               (8)  a plan or account established under Subchapter F,
  Chapter 54, Education Code, including a prepaid tuition contract;
               (9)  a plan or account established under Subchapter G,
  Chapter 54, Education Code, including a savings trust account;
               (10)  a qualified tuition program of any state that
  meets the requirements of Section 529, Internal Revenue Code of
  1986;
               (11)  a qualified ABLE program of any state that meets
  the requirements of Section 529A, Internal Revenue Code of 1986;
  and
               (12)  an [, and under any] annuity or similar contract
  purchased with assets distributed from a [that type of] plan or
  account described by this subsection.
         (b)  In addition to the exemption prescribed by Section
  42.001 and except as provided by this section, a person's interest
  in and right to receive payments from a qualified savings plan,
  whether vested or not, is exempt from attachment, execution, and
  seizure for the satisfaction of debts.
         (c)  An interest or right in a qualified savings plan that
  was [to the extent the plan, contract, annuity, or account is exempt
  from federal income tax, or to the extent federal income tax on the
  person's interest is deferred until actual payment of benefits to
  the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A,
  457(b), or 501(a), Internal Revenue Code of 1986, including a
  government plan or church plan described by Section 414(d) or (e),
  Internal Revenue Code of 1986.     For purposes of this subsection,
  the interest of a person in a plan, annuity, account, or contract]
  acquired by reason of the death of another person, whether as an
  owner, participant, beneficiary, survivor, coannuitant, heir, or
  legatee, is exempt to the same extent that the interest or right of
  the decedent [person from whom the plan, annuity, account, or
  contract was acquired] was exempt on the date of the decedent's
  [person's] death.  
         (d)  [If this subsection is held invalid or preempted by
  federal law in whole or in part or in certain circumstances, the
  subsection remains in effect in all other respects to the maximum
  extent permitted by law.
         [(b)]  Contributions to a qualified savings plan that are
  excess contributions under Section 4973, [an individual retirement
  account that exceed the amounts permitted under the applicable
  provisions of the] Internal Revenue Code of 1986, and any accrued
  earnings on such contributions are not exempt under this section
  unless otherwise exempt by law.  [Amounts qualifying as nontaxable
  rollover contributions under Section 402(a)(5), 403(a)(4),
  403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before
  January 1, 1993, are treated as exempt amounts under Subsection
  (a).     Amounts treated as qualified rollover contributions under
  Section 408A, Internal Revenue Code of 1986, are treated as exempt
  amounts under Subsection (a).     In addition, amounts qualifying as
  nontaxable rollover contributions under Section 402(c), 402(e)(6),
  402(f), 403(a)(4), 403(a)(5), 403(b)(8), 403(b)(10), 408(d)(3), or
  408A of the Internal Revenue Code of 1986 on or after January 1,
  1993, are treated as exempt amounts under Subsection (a).     Amounts
  qualifying as nontaxable rollover contributions under Section
  223(f)(5) of the Internal Revenue Code of 1986 on or after January
  1, 2004, are treated as exempt amounts under Subsection (a).]
         (e) [(c)]  Amounts distributed from a qualified savings plan
  are exempt from attachment, execution, and [plan, annuity, account,
  or contract entitled to an exemption under Subsection (a) are not
  subject to] seizure for a creditor's claim for 60 days after the
  date of distribution. If [if] the amounts qualify as a [nontaxable]
  rollover contribution under the Internal Revenue Code of 1986,
  whether taxable or nontaxable, the amounts will continue to be
  exempt thereafter under this section [Subsection (b)].
         (f)  A person's interest in a retirement plan that is solely
  an unfunded, unsecured promise by an employer to pay deferred
  compensation is not exempt under this section unless otherwise
  exempt by law.
         (g)  A person [(d)     A participant or beneficiary of a plan,
  annuity, account, or contract entitled to an exemption under
  Subsection (a), other than an individual retirement account or
  individual retirement annuity,] is not prohibited by this section
  from granting a valid and enforceable security interest in the
  person's interest in or right [participant's or beneficiary's right
  to the assets held in or] to receive payments from a qualified
  savings plan to the extent permitted by, and in accordance with, the
  Internal Revenue Code of 1986 and the terms of the qualified savings
  plan [under the exempt plan, annuity, account, or contract] to
  secure a loan to the person [participant or beneficiary] from the
  qualified savings plan. The person's interest in or right [exempt
  plan, annuity, account, or contract, and the right to the assets
  held in or] to receive payments from the plan[, annuity, account, or
  contract] is subject to attachment, execution, and seizure for the
  satisfaction of the security interest or lien granted by the person
  [participant or beneficiary] to secure the loan.
         (h) [(e)]  If any provision of this section is held
  [Subsection (a) is declared] invalid or preempted by federal law,
  in whole or in part or in certain circumstances, the remaining
  provisions of this section remain [as applied to a person who has
  not brought a proceeding under Title 11, United States Code, the
  subsection remains] in effect, to the maximum extent permitted by
  law[, as to any person who has filed that type of proceeding].
         (i) [(f)]  A reference in this section to the Internal
  Revenue Code of 1986 or a specific provision of the Internal Revenue
  Code of 1986 includes a subsequent amendment of that code or of the
  substance of that provision.
         SECTION 2.  Section 42.005, Property Code, is amended to
  read as follows:
         Sec. 42.005.  CHILD SUPPORT LIENS. (a)  Except as provided
  by Subsection (b), Sections 42.001, 42.002, and 42.0021 [of this
  code] do not apply to a child support lien established under
  Subchapter G, Chapter 157, Family Code.
         (b)  The exemption from attachment, execution, and seizure
  for the satisfaction of debts provided under Section 42.0021 for a
  plan or account described by Section 42.0021(a)(8), (9), or (10)
  applies to a child support lien established under Subchapter G,
  Chapter 157, Family Code.
         SECTION 3.  Section 42.0022, Property Code, is repealed.
         SECTION 4.  The changes in law made by this Act do not apply
  to property that is, as of the effective date of this Act, subject
  to a voluntary bankruptcy proceeding or to a valid claim of a holder
  of a final judgment who has, by levy, garnishment, or other legal
  process, obtained rights superior to those that would otherwise be
  held by a trustee in bankruptcy if a bankruptcy petition were then
  pending against the debtor. That property is subject to the law as
  it existed immediately before the effective date of this Act, and
  the prior law is continued in effect for that purpose.
         SECTION 5.  This Act takes effect September 1, 2019.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2779 was passed by the House on April
  24, 2019, by the following vote:  Yeas 145, Nays 0, 2 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2779 was passed by the Senate on May
  15, 2019, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor       
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