By Bailey H.B. No. 3471
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to tax-exempt benefits for county employees.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter C, Chapter 155, Local Government Code,
1-5 is amended to read as follows:
1-6 SUBCHAPTER C. [CAFETERIA PLAN] SALARY REDUCTIONS TO FINANCE
1-7 CERTAIN BENEFIT OPTIONS
1-8 Sec. 155.041. DEFINITION. In this subchapter, "county
1-9 employee" means a person who receives compensation for service
1-10 performed, other than as an independent contractor, for a county,
1-11 for a precinct or other unit of a county, or for a county officer
1-12 acting in an official capacity.
1-13 Sec. 155.042. BENEFIT [CAFETERIA PLAN] PROGRAM. The
1-14 commissioners court of a county by order or resolution may
1-15 establish a program to provide benefits that qualify for [qualifies
1-16 as] a cafeteria plan or a bona fide compensation reduction
1-17 arrangement under [Section 125 of] the federal Internal Revenue
1-18 Code of 1986 [(26 U.S.C. Section 125)] and regulations adopted
1-19 under that code [section].
1-20 Sec. 155.043. SALARY REDUCTION AGREEMENTS. (a) If the
1-21 commissioners court establishes a [cafeteria plan] program under
1-22 this subchapter, the court shall authorize county employees to
1-23 enter into voluntary agreements with the county to reduce the
1-24 periodic compensation paid the employees by the county by amounts
2-1 to be used to finance benefit options provided under the program
2-2 [cafeteria plan]. An authorization under this section must be made
2-3 available to all employees of the county.
2-4 (b) Amounts by which a county employee's compensation is
2-5 reduced under an agreement under this section are excluded from the
2-6 computation of contributions and other payments governed by federal
2-7 law to the extent authorized by federal law, including withholding
2-8 payments for federal income taxes and contributions to the federal
2-9 old age and survivors insurance program, but are not excluded in
2-10 the computation of contributions to and benefits from the Texas
2-11 County and District Retirement System and other retirement programs
2-12 governed by state law.
2-13 Sec. 155.044. RULES. The commissioners court may adopt
2-14 rules, consistent with this subchapter and federal [cafeteria plan]
2-15 requirements, for participation in and administration of the
2-16 program authorized by this subchapter.
2-17 SECTION 2. (a) This Act takes effect immediately if it
2-18 receives a vote of two-thirds of all the members elected to each
2-19 house, as provided by Section 39, Article III, Texas Constitution.
2-20 If this Act does not receive the vote necessary for immediate
2-21 effect, this Act takes effect September 1, 2001.
2-22 (b) The change in law made by this Act applies to a benefit
2-23 under Section 155.042, Local Government Code, that is provided
2-24 before, on, or after the effective date of this Act.