Assembly Bill No. 563–Committee on Government Affairs

 

March 26, 2001

____________

 

Referred to Committee on Government Affairs

 

SUMMARY—Authorizes additional deferred compensation plan for state employees and employees of political subdivisions. (BDR 23‑1345)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to public employees; authorizing an additional deferred compensation plan for state and employees and employees of political subdivisions; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1. NRS 287.270 is hereby amended to read as follows:

1-2    287.270  “Deferred compensation” means income which a state

1-3  employee or employee of the University and Community College System

1-4  of Nevada may legally set aside under 26 U.S.C. § 401(a), 401(k), 403(b)

1-5  or 457 and which, while invested under the program, is exempt from

1-6  federal income taxes on the employee’s contributions and interest,

1-7  dividends and capital gains.

1-8    Sec. 2.  NRS 287.320 is hereby amended to read as follows:

1-9    287.320  1.  The state may agree with any of its employees, and the

1-10  board of regents of the University of Nevada may agree with any of its

1-11  employees, to defer the compensation due to them in accordance with a

1-12  program approved by the committee and as authorized by 26 U.S.C. §

1-13  401(a), 401(k), 403(b) or 457. The board of regents may agree with any of

1-14  its employees to defer the compensation due to them as authorized by 26

1-15  U.S.C. § 403(b) without submitting the program to the committee for its

1-16  approval.

1-17    2.  The employer shall withhold the amount of compensation which an

1-18  employee has, by such an agreement, directed the employer to defer.

1-19    3.  The employer may invest the withheld money in any investment

1-20  approved by the committee or, in the case of deferred compensation under

1-21  26 U.S.C. § 403(b) for employees of the University and Community

1-22  College System of Nevada , by the board of regents of the University of

1-23  Nevada.

2-1    4.  The investments must be underwritten and offered in compliance

2-2  with all applicable federal and state laws and regulations, and may be

2-3  offered only by persons who are authorized and licensed under all

2-4  applicable state and federal regulations.

2-5    5.  All amounts of compensation deferred pursuant to the program, all

2-6  property and all rights purchased with those amounts and all income

2-7  attributable to those amounts, property or rights must, in accordance with

2-8  26 U.S.C. §  401(a) or 457(g), be held in trust for the exclusive benefit of

2-9  the participants in the program and their beneficiaries.

2-10    Sec. 3.  NRS 287.340 is hereby amended to read as follows:

2-11    287.340  1.  Deferrals of compensation may be withheld as deductions

2-12  from the payroll in accordance with the agreement between the employer

2-13  and a participating employee.

2-14    2.  The amount of deferred compensation set aside by the employer

2-15  under the program during any calendar year may not exceed the amount

2-16  authorized by 26 U.S.C. § 401(a), 401(k), 403(b) or 457.

2-17    Sec. 4.  NRS 287.350 is hereby amended to read as follows:

2-18    287.350  1.  No program becomes effective and no deferral may be

2-19  made until the program meets the requirements of 26 U.S.C. § 401(a),

2-20  401(k), 403(b) or 457 for eligibility.

2-21    2.  Income deferred during a period in which no income tax is imposed

2-22  by the state or a political subdivision may not be taxed when paid to the

2-23  employee.

2-24    Sec. 5.  NRS 287.401 is hereby amended to read as follows:

2-25    287.401  “Deferred compensation” means income which an employee

2-26  of a political subdivision may legally set aside under 26 U.S.C. § 401(a),

2-27  401(k) or 457 and which, while invested under the program, is exempt

2-28  from federal income taxes on the employee’s contributions and interest,

2-29  dividends and capital gains.

2-30    Sec. 6.  NRS 287.420 is hereby amended to read as follows:

2-31    287.420  1.  A political subdivision may agree with any of its

2-32  employees to defer the compensation due to them in accordance with a

2-33  program approved by the committee and as authorized by 26 U.S.C. §

2-34  401(a) or 457.

2-35    2.  The political subdivision shall withhold the amount of compensation

2-36  which an employee has, by such an agreement, directed the political

2-37  subdivision to defer.

2-38    3.  The political subdivision may invest the withheld money in any

2-39  investment permitted by law and approved by the committee.

2-40    4.  The investments must be underwritten and offered in compliance

2-41  with all applicable federal and state laws and regulations, and may be

2-42  offered only by persons who are authorized and licensed under all

2-43  applicable state and federal regulations.

2-44    Sec. 7.  NRS 287.430 is hereby amended to read as follows:

2-45    287.430  1.  The governing body of a political subdivision may create

2-46  an appropriate fund for administration of money and other assets resulting

2-47  from compensation deferred under the program.

2-48    2.  All amounts of compensation deferred pursuant to the program, all

2-49  property and rights purchased with those amounts, and all income

3-1  attributable to those amounts, property or rights must, in accordance with

3-2  26 U.S.C. § 401(a) or 457(g), be held in trust for the exclusive benefit of

3-3  the participants in the program and their beneficiaries.

3-4    Sec. 8.  NRS 287.450 is hereby amended to read as follows:

3-5    287.450  1.  Deferrals of compensation may be withheld as payroll

3-6  deductions in accordance with the agreement between the political

3-7  subdivision and a participating employee.

3-8    2.  The amount of deferred compensation set aside by the political

3-9  subdivision under the program during any calendar year may not exceed

3-10  the amount authorized by 26 U.S.C. § 401(a) or 457.

3-11    Sec. 9.  NRS 287.460 is hereby amended to read as follows:

3-12    287.460  1.  No program becomes effective and no deferral may be

3-13  made until the program meets the requirements of 26 U.S.C. § 401(a) or

3-14  457 for eligibility.

3-15    2.  Income deferred during a period in which no income tax is imposed

3-16  by the state or a political subdivision may not be taxed when paid to the

3-17  employee.

3-18    Sec. 10.  This act becomes effective upon passage and approval.

 

3-19  H