Assembly Bill No. 563–Committee on Government Affairs

 

CHAPTER..........

 

AN ACT relating to public employees; authorizing an additional deferred compensation plan for state 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:

 

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

   287.270  “Deferred compensation” means income which a state

employee or employee of the University and Community College System

of Nevada may legally set aside under the program, which may consist of

one or more plans authorized by 26 U.S.C. § 401(a), 401(k), 403(b) or

457 and which[,] income, while invested under the program, is exempt

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

dividends and capital gains.

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

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

board of regents of the University of Nevada may agree with any of its

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

program approved by the committee [andas] which may consist of one or

more plans authorized by 26 U.S.C. § 401(a), 401(k), 403(b) or 457. The

board of regents may agree with any of its employees to defer the

compensation due to them as authorized by 26 U.S.C. § 403(b) without

submitting the program to the committee for its approval. An employee

may defer compensation under one or more plans in the program.

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

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

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

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

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

College System of Nevada , by the board of regents of the University of

Nevada.

   4.  The investments must be underwritten and offered in compliance

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

offered only by persons who are authorized and licensed under all

applicable state and federal regulations.

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

property and all rights purchased with those amounts and all income

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

26 U.S.C. § 401(a) or 457(g), as applicable, be held in trust for the

exclusive benefit of the participants in the program and their beneficiaries.

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

   287.340  1.  Deferrals of compensation may be withheld as deductions

from the payroll in accordance with the agreement between the employer

and a participating employee.

   2.  The amount of deferred compensation set aside by the employer to a

plan under the program during any calendar year may not exceed the

amount authorized by 26 U.S.C. § 401(a), 401(k), 403(b) or 457 [.] , as

applicable.

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

   287.350  1.  No plan in the program becomes effective and no

deferral may be made until the [program] plan meets the requirements of

26 U.S.C. § 401(a), 401(k), 403(b) or 457 , as applicable, for eligibility.

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

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

employee.

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

   287.401  “Deferred compensation” means income which an employee

of a political subdivision may legally set aside under the program, which

may consist of one or more plans authorized by 26 U.S.C. § 401(a),

401(k) or 457 and which [,] income, while invested under the program, is

exempt from federal income taxes on the employee’s contributions and

interest, dividends and capital gains.

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

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

employees to defer the compensation due to them in accordance with a

program approved by the committee [and as] which may consist of one or

more plans authorized by 26 U.S.C. § 401(a) or 457. An employee may

defer compensation under one or more plans in the program.

   2.  The political subdivision shall withhold the amount of compensation

which an employee has, by such an agreement, directed the political

subdivision to defer.

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

investment permitted by law and approved by the committee.

   4.  The investments must be underwritten and offered in compliance

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

offered only by persons who are authorized and licensed under all

applicable state and federal regulations.

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

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

an appropriate fund for administration of money and other assets resulting

from compensation deferred under the program.

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

property and rights purchased with those amounts, and all income

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

26 U.S.C. § 401(a) or 457(g), as applicable, be held in trust for the

exclusive benefit of the participants in the program and their beneficiaries.

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

   287.450  1.  Deferrals of compensation may be withheld as payroll

deductions in accordance with the agreement between the political

subdivision and a participating employee.

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

subdivision to a plan under the program during any calendar year may not

exceed the amount authorized by 26 U.S.C. § 401(a) or 457 [.] , as

applicable.

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

   287.460  1.  No plan in the program becomes effective and no

deferral may be made until the [program] plan meets the requirements of

26 U.S.C. § 401(a) or 457 , as applicable, for eligibility.

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

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

employee.

   Sec. 10.  This act becomes effective upon passage and approval.

 

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