Hundreds of bills are filed in the Texas Legislature every time it meets. Only a few make it to the Governor’s desk. Here are a few that have and have not been well publicized. Following a brief explanation of each bill, you’ll find a link to the bill on the Texas Legislature’s website.
Expanded Exemptions for Savings Plans. HB 2779 expands the exemptions (from creditors) for savings plans under Section 42.0021 of the Texas Property Code. In addition to stock bonus, pension, annuity, deferred compensation, profit-sharing and similar plans, the Legislature has added health and education plans, so long as the plan is either exempt from federal income tax or to the extent federal income tax on a person’s interest in the plan is deferred until actual payment of the benefits. The list of new plans included are retirement plans sponsored by a private employer, government or church, a Coverdell education savings account, one of the plans for prepaid tuition and education savings trusts under the Texas Education Code, a Section 529 qualified tuition program, and a qualified ABLE program. The statute clarifies that a person’s interest in and right to receive payments from a qualified savings plan, whether vested or not, is exempt from attachment, execution and seizure. It also makes clear that an interest in a qualified savings plan acquired by reason of the death of another is exempt. Excess contributions (under Section 4973 of the Internal Revenue Code) are not exempt.
Amounts distributed from a qualified savings plan are exempt from attachment, execution and seizure for 60 days if the amounts qualify as a rollover contribution under the Internal Revenue Code, whether taxable or not. By contrast, a person’s interest in a retirement plan that is solely an unfunded, unsecured promise by an employer to pay deferred compensation is not exempt.
https://capitol.texas.gov/tlodocs/86R/billtext/pdf/HB02779F.pdf#navpanes=0
Trust Advisors are Fiduciaries. HB 2246 amends Section 114.0031 of the Texas Property Code (Trust Code) and says that if the terms of a trust give a person the authority to direct, consent to, or disapprove a trustee’s actual or proposed investment decisions, distribution decisions, or other decisions, the person is an advisor. It goes on to say an advisor is a fiduciary regardless of trust terms to the contrary. There are two exceptions when an advisor is not a fiduciary: (1) where the only power is to remove and appoint trustees, advisors, trust committee members or other protectors; or (2) the advisor does not exercise that power to appoint the advisor’s self to a position described in (1). The bill goes on to add a new subsection (e-1) which says the foregoing does not prohibit the exercise of the power in a non-fiduciary capacity as required by the Internal Revenue Code for a grantor or other person to be treated as the owner of any portion of the trust for federal income tax purposes.
https://capitol.texas.gov/tlodocs/86R/billtext/pdf/HB02246F.pdf#navpanes=0
Disaster Replacement Property – Homestead. Texas has experienced some significant disasters. SB 812 says that if a homeowner is participating in a disaster recovery program administered by the General Land Office or by a political subdivision of the state which is funded with community development block grant disaster recovery money authorized by federal law, then a replacement structure is not considered to be a “new improvement” even if the square footage exceeds that of the replaced structure, or the exterior of the replacement structure is of a higher quality construction and composition than the replaced structure, as long as the changes in the size, etc., is to satisfy the requirements of the disaster recovery program.
https://capitol.texas.gov/tlodocs/86R/billtext/pdf/SB00812F.pdf#navpanes=0