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A BILL TO BE ENTITLED
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AN ACT
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relating to the exemption of certain retirement accounts from |
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access by creditors. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 42.0021(a), (c), and (d), Property |
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Code, are amended to read as follows: |
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(a) In addition to the exemption prescribed by Section |
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42.001, a person's right to the assets held in or to receive |
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payments, whether vested or not, under any stock bonus, pension, |
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annuity, deferred compensation, profit-sharing, or similar plan, |
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including a retirement plan for self-employed individuals, or a |
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simplified employee pension plan, an individual retirement account |
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or individual retirement annuity, including an inherited |
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individual retirement account or individual retirement annuity, or |
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a health savings account, and under any annuity or similar contract |
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purchased with assets distributed from that type of plan or |
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account, [and under any retirement annuity or account described by
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Section 403(b) or 408A of the Internal Revenue Code of 1986, and
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under any individual retirement account or any individual
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retirement annuity, including a simplified employee pension plan,
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and under any health savings account described by Section 223 of the
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Internal Revenue Code of 1986,] is exempt from attachment, |
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execution, and seizure for the satisfaction of debts to the extent |
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[unless] the plan, contract, annuity, or account is exempt from |
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federal income tax, or to the extent federal income tax on the |
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person's interest is deferred until actual payment of benefits to |
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the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A, |
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457(b), or 501(a), Internal Revenue Code of 1986, including a |
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government plan or church plan described by Section 414(d) or (e), |
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[does not qualify under the applicable provisions of the] Internal |
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Revenue Code of 1986. For purposes of this subsection, the interest |
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of a person in a plan, annuity, account, or contract acquired by |
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reason of the death of another person, whether as an owner, |
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participant, beneficiary, survivor, coannuitant, heir, or legatee, |
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is exempt to the same extent that the interest of the person from |
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whom the plan, annuity, account, or contract was acquired was |
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exempt on the date of the person's death. [A person's right to the
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assets held in or to receive payments, whether vested or not, under
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a government or church plan or contract is also exempt unless the
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plan or contract does not qualify under the definition of a
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government or church plan under the applicable provisions of the
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federal Employee Retirement Income Security Act of 1974.] If this |
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subsection is held invalid or preempted by federal law in whole or |
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in part or in certain circumstances, the subsection remains in |
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effect in all other respects to the maximum extent permitted by law. |
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(c) Amounts distributed from a plan, annuity, account, or |
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contract entitled to an [the] exemption under Subsection (a) are |
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not subject to seizure for a creditor's claim for 60 days after the |
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date of distribution if the amounts qualify as a nontaxable |
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rollover contribution under Subsection (b). |
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(d) A participant or beneficiary of a [stock bonus, pension,
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profit-sharing, retirement] plan, annuity, account, or contract |
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entitled to an exemption under Subsection (a), other than an |
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individual retirement account or individual retirement annuity, |
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[or government plan] is not prohibited from granting a valid and |
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enforceable security interest in the participant's or beneficiary's |
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right to the assets held in or to receive payments under the exempt |
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plan, annuity, account, or contract to secure a loan to the |
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participant or beneficiary from the exempt plan, annuity, account, |
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or contract, and the right to the assets held in or to receive |
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payments from the plan, annuity, account, or contract is subject to |
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attachment, execution, and seizure for the satisfaction of the |
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security interest or lien granted by the participant or beneficiary |
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to secure the loan. |
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SECTION 2. Section 42.0021, Property Code, as amended by |
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this Act, applies to an inherited individual retirement plan, |
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annuity, account, or contract without regard to whether the plan, |
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annuity, account, or contract was created before, on, or after the |
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effective date of this Act. |
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SECTION 3. The changes made by this Act are intended to |
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clarify rather than change existing law. |
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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, 2011. |