BILL ANALYSIS



H.B. 1559
By: Turner, Sylvester
04-12-95
Committee Report (Unamended)


BACKGROUND

Currently, active members of the Houston Police Officers Pension
System contribute at a rate of 8.75% of their base salary.  These
contributions come into the system on an after tax basis.  Federal
tax laws make provision for the contributions to be made on a pre-tax basis instead.  The net result of the latter approach is to
increase the take-home pay of the police force without an
additional cost to the city.

PURPOSE

Allows the city council to enact an ordinance to provide that
contributions by the members come into the System on a pretax
basis.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1:  Amends Section 6, Police Officers' Pension System in
cities of 1,200,000 or more, Article 6243g-1, V.T.C.S., by adding
Section 6A(a) and (b) as follows:
     
     (a) allows the governing body of the city, by ordinance or
resolution, to meet IRS requirements for the members' pension
contributions to be made on a pre-tax basis, and requires all
parties to act as soon as practical after the adoption of the
ordinance or resolution.
     
     (b) provides that, for pension purposes, the pension
contributions referred to in (a) will be treated as if they were
made by the member on the same basis as if the pretax plan were not
in effect.

SECTION 2:  Emergency Clause




Committee on Pensions & Investments

SUMMARY OF COMMITTEE ACTION

HB 1559 was considered by the committee in a public hearing held on
April 12, 1995.

Rep. Sylvester Turner testified as the bill's author.

The following person testified for the bill:
     John Lawson representing the Houston Police Officer's Pension
System

The bill was reported favorably without amendment with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars by a record vote of 5
ayes, 0 nays, 0 pnv & 4 absent.