TO:	Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	HJR2 by Bonnen (Proposing a constitutional amendment authorizing the legislature to provide one-time or ongoing benefit enhancements to eligible annuitants of the Teacher Retirement System of Texas, including a one-time transfer of funds for that purpose.), As Introduced

This resolution would propose an amendment to Section 51, Article III, of the Texas Constitution, to authorize the legislature to provide a onetime or ongoing benefit enhancements to eligible annuitants of the Teacher Retirement System (TRS). The benefit enhancement would be contingent on an accompanying appropriation of funds sufficient to fully pay for the benefit enhancement.

According to the Pension Review Board, TRS is considered actuarially sound, with an amortization period of 27 years as of August 31, 2023. Government Code, Section 821.006 defines actuarial soundness, for the purposes of making modifications to benefit and contribution levels, as less than 31 years. The benefit enhancement would take place only if the fund is considered actuarially sound. 

The approval of the proposed amendment to Section 51 of Article III by voters would result in a cost to the state of $3.45 billion for the purposes of providing the benefit enhancements. Although the resolution is self-enabling, the fiscal impact is shown in the fiscal note for HB 600. These funds would be transferred to TRS in the 2024 fiscal year after the amendment takes effect and would not be considered an appropriation of state tax revenues. 

The proposed amendment would be submitted to voters at an election to be held November 7, 2023.

Local Government Impact

No fiscal implication to units of local government is anticipated.