S.B. 1588 78(R)    BILL ANALYSIS


S.B. 1588
By: Whitmire
Pensions & Investments
Committee Report (Unamended)



BACKGROUND AND PURPOSE 

Currently, investments by Texans in Texas' two 529 college savings plans
enjoy creditor 
protection. However, no similar protection exists for Texans investing in
the 529 plans of other 
states. S.B. 1588 provides protection of college savings plans from
attachment, execution, 
and seizure to satisfy debt.


RULEMAKING AUTHORITY

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


ANALYSIS

SECTION 1. Amends Chapter 42, Property Code, by adding Section 42.0022, as
follows: 
 
 Sec. 42.0022. EXEMPTION FOR COLLEGE SAVINGS PLANS.  (a) Provides that in
 addition to the exemption prescribed by Section 42.001, a person's right
to the assets held 
 in or to receive payments or benefits under any of the following is
exempt from 
 attachment, execution, and seizure for the satisfaction of debts:
  
  (1) any fund or plan established under Subchapter F, Chapter 54,
Education 
  Code, including the person's interest in a prepaid tuition contract;
  
  (2) any fund or plan established under Subchapter G, Chapter 54,
Education 
  Code, including the person's interest in a savings trust account; or
  
  (3) any qualified tuition program of any state meeting the requirements
of Section 
  529, Internal Revenue Code of 1986, as amended.
  
  (b) Provides that if any portion of this section is held to be invalid
or preempted 
  by federal law in whole or in part or in certain circumstances, this
section remains 
  in effect in all other respects to the maximum extent permitted by law.

SECTION 2. (a) Effective date: September 1, 2003.
 
  (b) Provides that the change in law made by this Act applies to a
person's right to 
  the assets held in or to receive payments or benefits under any fund,
plan, or 
  program described by Section 42.0022, Property Code, as added by this
Act, on 
  and after the effective date of this Act without regard to whether any
money and 
  other property was contributed to or paid in connection with the fund,
plan, or 
  program to establish the person's right to those assets, payments, or
benefits 
  before, on, or after the effective date of this Act.


 EFFECTIVE DATE

September 1, 2003.