78R513 SGA-D

By:  Isett                                                        H.B. No. 954



A BILL TO BE ENTITLED

AN ACT

relating to providing a tax-exempt benefit plan to cover 
educational expenses to employees of state agencies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.   Chapter 659, Government Code, is amended by 
adding Subchapter M to read as follows:

SUBCHAPTER M.  ADDITIONAL BENEFITS
	Sec. 659.351.  EDUCATIONAL ASSISTANCE PLAN. (a)  In this 
section:     
		(1)  "Eligible higher education expenses" means the 
following expenses incurred by a person attending an accredited 
public or private institution of higher education or other 
accredited postsecondary educational institution, including a 
technical or vocational institution:
			(A)  tuition and fees charged by the institution; 
and               
			(B)  costs for books, supplies, and equipment 
required for a course of instruction at the institution.
		(2)  "State agency" has the meaning assigned by Section 
659.101.     
	(b)  Each state agency shall provide to its employees as an 
optional benefit the right to participate in a plan to allow the 
exclusion from the gross income for federal income tax purposes of a 
state agency employee the amounts paid through the plan to cover 
eligible higher education expenses of the employee. To the extent 
permitted under federal law, the plan must permit a participating 
employee to include eligible higher education expenses of an 
immediate family member of the employee in the plan.  The plan may 
be established as an educational assistance program under 26 U.S.C. 
Section 127 or other applicable federal law.
	(c)  The state agency shall offer the plan in connection with 
its employees health care plan or group insurance plan or as a 
separate benefit, as determined by the Employees Retirement System 
of Texas.
	(d)  An employee of a state agency may authorize in writing a 
deduction each pay period from the employee's salary or wage 
payment for coverage of the employee under the plan.  Sections 
659.104-659.109 apply to a deduction under this section.
	SECTION 2.   This Act takes effect September 1, 2003, except 
that a state agency is not required to offer an educational 
assistance plan to its employees under Section 659.351, Government 
Code, as added by this Act, before January 1, 2004.