BILL ANALYSIS
BILL ANALYSIS
Office of House Bill Analysis H.B. 76
By: Solomons
Financial Institutions
3/4/1999
Committee Report (Amended)
BACKGROUND AND PURPOSE
Currently, traditional IRAs are protected from creditors in this state, while Roth IRAs are not. Roth IRAs were created by the Taxpayer Relief Act of 1997. Unlike a traditional IRA, an individual cannot deduct contributions made to a Roth IRA from the individual’s taxable income. H.B. 76 exempts the Roth IRA from attachment, execution, or seizure by creditor.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Sections 42.0021(a) and (b), Property Code, to provide that Section 408A, in addition to Section 403(b), Internal Revenue Code of 1986, describes a retirement annuity or account that is exempt from seizure for the satisfaction of debts. Makes conforming changes.
SECTION 2. Makes application of this Act prospective.
SECTION 3. Emergency clause.
Effective date: upon passage.
EXPLANATION OF AMENDMENTS
Committee Amendment #1
SECTION 1. Amends Section 42.0021(b), Property Code, to provide that contributions to a Roth IRA described in Section 408A of the Internal Revenue Code of 1986 are exempt under this section (Additional Exemption for Retirement Plan). Amends Section 42.0021(b), Property Code, to provide that amounts treated as a qualified rollover contributions under Section 408A of the Internal Revenue Code of 1986 are treated as exempt amounts under this section.
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