CHAPTER 204
H.P. 685 - L.D. 937
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 5 MRSA c. 67, first 2 lines are repealed and the following enacted in their place:
CHAPTER 67
TAX-DEFERRED ARRANGEMENT
Sec. 2. 5 MRSA �881, as amended by PL 1983, c. 791, �1, is repealed and the following enacted in its place:
�881. Tax-deferred arrangements
The State or any county, city, town or other political subdivision may, by contract, agree with any employee to defer or contribute a portion of that employee's compensation as part of a tax-deferred arrangement permitted for employees under the provisions of the Internal Revenue Code of 1986, as amended, and subsequently contract for, purchase or otherwise procure for the employee an investment product or products as permitted by applicable law, including, but not limited to, a fixed or variable life insurance or annuity contract from an insurance company licensed to contract business in this State, shares of an investment company registered under the federal Investment Company Act of 1940 or investment products offered by any state or national bank. Any tax deferral program offered by a firm must protect the benefits of employees to the full extent allowed by a plan authorized under the Internal Revenue Code of 1986, as amended. The State, pursuant to section 885, may offer to state employees and state employees may elect to participate in any tax-deferred arrangement established and made available by the Board of Trustees of the Maine State Retirement System pursuant to section 17103.
Sec. 3. 5 MRSA �882, as enacted by PL 1973, c. 491, is amended to read:
The director or the principal officer of each state agency, department, board, commission or institution is authorized to enter into such contractual agreements with employees of that particular state agency, department, board, commission or institution on behalf of the State to defer any portion of that employee's compensation as part of a tax-deferred arrangement under this chapter.
Sec. 4. 5 MRSA �883, as amended by PL 1985, c. 785, Pt. A, �39, is further amended to read:
Administration of a deferred compensation program tax-deferred arrangements under this chapter, within state agencies, departments, boards, commissions or institutions shall be, is under the direction of the Department of Finance Administrative and Financial Services. Each county, city, town or other political subdivision may designate an officer to administer a deferred compensation program tax-deferred arrangements. Payroll deductions shall must be made in each instance by the appropriate payroll officer.
Sec. 5. 5 MRSA �884, as amended by PL 1991, c. 780, Pt. Y, ��32 and 33, is further amended to read:
�884. Advisory Council on Tax-deferred Arrangements
The Advisory Council on Deferred Compensation Plans Tax-deferred Arrangements, established by section 12004-I, subsection 25, shall meet at least once a year, review the operations of the deferred compensation arrangements program and advise the Department of Administrative and Financial Services on matters of policy relating to the activities under the arrangements program. Members of the advisory council are entitled to compensation as provided in chapter 379. All appointed or elected members serve at the pleasure of their appointing or electing authorities. The advisory council consists of 7 6 members as follows.
1. Ex officio members; chair. The ex officio members of the Advisory Council on Deferred Compensation Plans Tax-deferred Arrangements are: the Commissioner of Administrative and Financial Services, or the commissioner's designee; the Superintendent of Insurance, or the superintendent's designee; and the Superintendent of Banking, or the superintendent's designee. The Commissioner of Administrative and Financial Services, or a designee, is the chair of the advisory council.
2. Retirement system representative. The retirement system representative of the advisory council is the Executive Director of the Maine State Retirement System.
3. Employee representatives. The employee representatives of the advisory council are 3 classified state employees appointed by the Governor as follows:
A. One employee recommended to the Governor by the Maine State Employees Association;
B. One employee recommended to the Governor by the American Federation of State and Municipal Employees; and
C. One employee recommended to the Governor by the Maine State Troopers Association.
Employee representatives are appointed for terms of 3 years, except that of the first appointments, one must be for one year, one for 2 years and one for 3 years.
4. Voting. All votes of the council must be one vote cast by labor and one vote cast by management. The labor vote must be cast by the labor cochair, who must be chosen by the labor members, and must represent the majority opinion of the labor members of the council. The management vote must be cast by the management cochair, who is the Commissioner of Administrative and Financial Services or the commissioner's designee.
Sec. 6. 5 MRSA ��885 and 887, as enacted by PL 1973, c. 491, are amended to read:
The advisory council shall select up to 3 7 firms for participation by state employees as the result of investigation and competitive bidding, as outlined in chapter 155. The advisory council may, at any time after the evaluation and study of new programs, replace any previously selected firm with another firm through the process of competitive bidding for the purpose of new enrollees. Participants in the plan retain the right to continue to invest with a previously selected firm with which they have already established an account in the State of Maine plan. Any firm selected by the advisory council in accordance with this section must be a registered investment advisor under the federal Investment Company Act of 1940 or a bank or insurance company authorized to receive or manage contributions as part of a tax-deferred arrangement under this chapter.
Any county, city, town or other political subdivision wishing to make use of any material relating to evaluation, or competitive bidding compiled by the advisory council, may receive copies on request.
�887. Payment of premiums; purchase of shares; investment products
Notwithstanding any other provision of law to the contrary, those persons designated to administer the deferred compensation program tax-deferred arrangements are authorized to make payment of premiums for the purchase of fixed or variable life insurance or annuity contracts and to purchase investment company shares under the deferred compensation program for investment products acquired as part of a tax-deferred arrangement. Such The payments shall are not be construed to be a prohibited use of the general assets of the State, county, city or other political subdivision.
Sec. 7. 5 MRSA �889, as enacted by PL 1973, c. 491, is repealed and the following enacted in its place:
The financial liability of the State, county, city, town or other political subdivision under a tax-deferred arrangement under this chapter is limited in each instance to the transmittal to the provider of the investment product or products selected by an employee of that portion of the employee's compensation deferred under the tax-deferred arrangement while the enrollee remains an employee of the State, county, city, town or other political subdivision enrolled in the tax-deferred arrangement, and only to the amount of the portion of the employee's compensation.
Sec. 8. 5 MRSA �12004-I, sub-�25, as enacted by PL 1987, c. 786, �5, is amended to read:
Advisory Council on |
Sec. 9. Report required. The Commissioner of Administrative and Financial Services shall issue a report to the joint standing committee of the Legislature having jurisdiction over state and local government matters no later than February 15, 1999. The report must include the following:
1. A list and addresses of firms that bid in accordance with the Maine Revised Statutes, Title 5, section 885;
2. A list and addresses of firms selected by the Advisory Council on Tax-deferred Arrangements; and
3. A statement that includes a rationale for decreasing, maintaining or expanding the number of firms eligible to participate in tax-deferred arrangements.
Effective September 19, 1997, unless otherwise indicated.
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