78R558 KKA-D

By:  Isett                                                        H.B. No. 955



A BILL TO BE ENTITLED

AN ACT

relating to a tax-exempt benefit plan for educational expenses of 
school district employees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter A, Chapter 22, Education Code, is 
amended by adding Section 22.007 to read as follows:
	Sec. 22.007.  EDUCATIONAL ASSISTANCE PLAN.  (a)  In this 
section, "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:
		(1)  tuition and fees charged by the institution; and                  
		(2)  costs for books, supplies, and equipment required 
for a course of instruction at the institution.
	(b)  If permitted by federal law, a school district shall 
provide to each employee as an optional benefit the right to 
participate in a plan to allow the employee to exclude from the 
employee's gross income subject to federal income tax amounts paid 
through the plan to cover the employee's eligible higher education 
expenses.  To the extent permitted by federal law, the plan must 
also permit a participating employee to include in the plan 
eligible higher education expenses of an immediate family member of 
the employee.
	(c)  The plan may be established as an educational assistance 
program under 26 U.S.C. Section 127 or other applicable federal 
law.
	SECTION 2.  This Act takes effect September 1, 2003, except 
that a school district is not required to offer an educational 
assistance plan to employees under Section 22.007, Education Code, 
as added by this Act, before January 1, 2004.