By Isett                                              H.B. No. 3596

         75R11869 CAS-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to providing a tax-exempt benefit plan to cover

 1-3     educational expenses to employees of state agencies.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Chapter 659, Government Code, is amended by

 1-6     adding Subchapter J to read as follows:

 1-7                     SUBCHAPTER J.  ADDITIONAL BENEFITS

 1-8           Sec. 659.201.  EDUCATIONAL ASSISTANCE PLAN.  (a)  Each state

 1-9     agency must provide to its employees as an optional benefit the

1-10     right to participate in a plan to allow the exclusion from the

1-11     gross income for federal income tax purposes of a state agency

1-12     employee amounts paid through the plan to cover eligible higher

1-13     education expenses of the employee.  To the extent permitted under

1-14     federal law, the plan must permit a participating employee to

1-15     include eligible higher education expenses of an immediate family

1-16     member of the employee in the plan.  The plan may be established as

1-17     an educational assistance program under 26 U.S.C. Section 127 or

1-18     other applicable federal law.

1-19           (b)  The state agency shall offer the plan in connection with

1-20     its employees health care plan or group insurance plan or as a

1-21     separate benefit, as determined by the Employees Retirement System

1-22     of Texas.

1-23           (c)  An employee of a state agency may authorize in writing a

1-24     deduction each pay period from the employee's salary or wage

 2-1     payment for coverage of the employee under the plan.  Sections

 2-2     659.104-659.109 apply to a deduction under this section.

 2-3           (d)  In this section:

 2-4                 (1)  "Eligible higher education expenses" means the

 2-5     following expenses incurred by a person attending an accredited

 2-6     public or private institution of higher education or other

 2-7     accredited postsecondary educational institution, including a

 2-8     technical or vocational institution:

 2-9                       (A)  tuition and fees charged by the institution;

2-10     and

2-11                       (B)  costs for books, supplies, and equipment

2-12     required for a course of instruction at the institution.

2-13                 (2)  "State agency" has the meaning assigned by Section

2-14     659.101.

2-15           SECTION 2.  This Act takes effect September 1, 1997, except

2-16     that a state agency is not required to offer an educational

2-17     assistance plan to its employees under Section 659.201, Government

2-18     Code, as added by this Act, before January 1, 1998.

2-19           SECTION 3.  The importance of this legislation and the

2-20     crowded condition of the calendars in both houses create an

2-21     emergency and an imperative public necessity that the

2-22     constitutional rule requiring bills to be read on three several

2-23     days in each house be suspended, and this rule is hereby suspended.