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A BILL TO BE ENTITLED
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AN ACT
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relating to property interests of spouses in connection with |
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certain separate and community property. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 3.007, Family Code, is amended by |
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amending Subsections (a), (b), and (d) and adding Subsection (a-1) |
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to read as follows: |
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(a) The community property interest [A spouse who is a
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participant] in a defined benefit retirement plan is the amount |
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equal to the product of the amount [has a separate property interest
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in the monthly accrued benefit] the spouse participating in the |
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plan would have [had] a right to receive on normal retirement age, |
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as defined by the plan, if the participant spouse had terminated |
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employment on the date of dissolution or termination of the |
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marriage, multiplied by the percentage resulting from dividing the |
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number of months of participation in the plan during the marriage by |
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the total number of months of participation in the plan as of the |
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date of dissolution or termination of the marriage. The amount |
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described by this subsection is determined as of the date of |
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dissolution or termination of the marriage, regardless of whether |
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the participant spouse's right to the benefit is [had] vested and |
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regardless of the percentage of vesting, if any. |
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(a-1) The community property interest, as determined under |
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Subsection (a), includes a portion of any additional amounts |
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resulting from adjustments, including cost-of-living adjustments, |
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made to the defined benefit retirement plan after the date of |
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dissolution or termination of the marriage, in proportion to the |
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percentage of the total benefit determined to be community property |
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under Subsection (a). |
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(b) The separate [community] property interest in a defined |
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benefit retirement plan is the portion of the benefit that is not |
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determined to be community property under Subsections (a) and (a-1) |
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[shall be determined as if the spouse began to participate in the
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plan on the date of marriage and ended that participation on the
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date of dissolution or termination of the marriage, regardless of
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whether the benefit had vested]. |
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(d) A spouse who is a participant in an employer-provided |
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stock option plan or an employer-provided restricted stock plan has |
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a separate property interest in the options or restricted stock |
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granted to the spouse under the plan as follows: |
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(1) if the option or stock was granted to the spouse |
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before marriage but required continued employment during marriage |
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before the grant could be exercised or the restriction removed, the |
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spouse's separate property interest is equal to the fraction of the |
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option or restricted stock in which: |
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(A) the numerator is the period from the date the |
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option or stock was granted until the date of marriage and, if the |
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option or stock also required continued employment following the |
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date of dissolution or termination of the marriage before the grant |
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could be exercised or the restriction removed, the period from the |
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date of dissolution or termination of the marriage until the date |
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the grant could be exercised or the restriction removed; and |
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(B) the denominator is the period from the date |
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the option or stock was granted until the date the grant could be |
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exercised or the restriction removed; and |
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(2) if the option or stock was granted to the spouse |
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during the marriage but required continued employment following the |
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date of dissolution or termination of the [after] marriage before |
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the grant could be exercised or the restriction removed, the |
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spouse's separate property interest is equal to the fraction of the |
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option or restricted stock in which the numerator is the period from |
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the date of dissolution or termination of the marriage until the |
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date the grant could be exercised or the restriction removed and the |
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denominator is the period from the date the option or stock was |
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granted until the date the grant could be exercised or the |
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restriction removed. |
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SECTION 2. Section 3.007(f), Family Code, is repealed. |
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SECTION 3. The change in law made by this Act applies to: |
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(1) a suit for dissolution of a marriage pending |
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before a trial court on or filed on or after the effective date of |
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this Act; and |
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(2) the estate of a person who dies on or after the |
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effective date of this Act. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |