SRC-CTC S.B. 606 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 606
2001S0263/1By: Sibley
Education
4/24/2001
As Filed


DIGEST AND PURPOSE 

Currently, employees of certain political subdivisions, including public
schools, may participate in taxsheltered annuity programs governed by
Section 403(b) of the Internal Revenue Code.  However, changes in state and
federal law over the past few years have added complexities to the offering
and administration of annuity programs.  As proposed, S.B. 606 amends
current statute to allow educators and school districts to protect
consumers and control the quality of vendors, to ensure that vendors are
selling plans that comply with federal and state laws, and to protect
school districts by allowing some district oversight of the plans. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 1, Chapter 22, Acts of the 57th Legislature, 3rd
Called Session, 1962, as amended by Section 8, Chapter 1340, Acts of the
75th Legislature, Regular Session, 1997, to add the boards of trustees of
school districts, the Texas School for the Blind and Visually Impaired and
certain political subdivisions to the list of entities to which this
section and Section 2 of this Act apply. Deletes wording relating to the
Local Boards of Education of the Public Schools of this State. Authorizes a
governmental entity covered by this section to enter into agreements with
its employees for the purchase of annuities or for contributions to any
type of investment for its employees as authorized in Section 403(b) of the
Internal Revenue Code of 1986, including subsequent amendments of that law,
rather than the Internal Revenue Code of 1954, as it existed on January 1,
1981. 

SECTION 2.  Amends Section 2, Chapter 22, Acts of the 57th Legislature, 3rd
Called Session, 1962, to authorize the comptroller or the governing board
of an employee's governmental entity to approve, with the input of
employees, a list of agents, brokers, or companies through which an annuity
or investment is to be purchased and whose annuity or investment product
meets the requirements of Section 403(b) of the Internal Revenue Code of
1986, including subsequent amendments of that law. Requires the employee,
if the comptroller or governing board has approved a list under this
section, to designate the agent, broker, or company from the applicable
list for an annuity or investment purchased after January 1, 2002.  Makes
conforming changes. 

SECTION 3.  Repealer: Section 1, Chapter 22, Acts of the 57th Legislature,
3rd Called Session, 1962, as amended by Section 7, Chapter 1341, Acts of
the 75th Legislature, Regular Session, 1997. 

SECTION 4.  Effective date: September 1, 2001.