SRC-EPT, JEC, JLB C.S.S.B. 1588 78(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 1588
78R12499 JSA-FBy: Whitmire
Jurisprudence
4/17/2003
Committee Report (Substituted)


DIGEST 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.  C.S.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. 

SECTION BY SECTION 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.