HBA-NMO H.B. 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 76
By: Solomons
Financial Institutions
5/18/1999
Enrolled



BACKGROUND AND PURPOSE 

Currently, traditional IRAs are protected from creditors in this state,
while Roth IRAs are not.   The Roth IRA was 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 a
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 (relating to the Roth IRA), 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.
Provides 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).   Provides 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.  Makes
conforming changes. 

SECTION 2.  Effective date: September 1, 1999.
Makes application of this Act retroactive.

SECTION 3.  Emergency clause.