BILL ANALYSIS


                                                         S.B. 901
                                                    By: Henderson
                                                    State Affairs
                                                           5-5-95
                                     Committee Report (Unamended)
BACKGROUND

On February 9, 1995, the University of Texas System Board of
Regents voted to reduce the number of approved Optional Retirement
Program (ORP) vendors, that is, insurance and mutual fund
companies, for all new ORP contacts as of April 1, 1995.  Existing
relationships between higher education faculty and administrators
and their vendors are grandfathered.  The Chancellor of the Texas
State University System has been quoted as also being interested in
limiting the vendors for the faculty of the four universities in
that system.

PURPOSE

As proposed, S.B. 901 authorizes the Texas Higher Education
Coordinating Board to establish standards for companies to meet to
be eligible to offer an optional retirement program for state-supported institutions of higher education, but limits the board's
interference to setting minimum standards only.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 830.002, Government Code, by adding
Subsection (d), to authorize the Texas Higher Education
Coordinating Board to establish minimum standards that an insurance
or annuity company must meet to be eligible to offer a participant
an investment or retirement annuity in the optional retirement
program authorized under Subsection (a) and Section 830.004, but
may not otherwise restrict the insurance or annuity company with
whom a participant may do business or the participant's investment
or annuity.  

SECTION 2. Amends Section 830.004(a), Government Code, to prohibit
a governing board of a state-supported institution of higher
learning from restricting a participant's authorized choice of
investment or annuity.  Prohibits a governing board from
restricting the company with whom a participant may do business if
the company is eligible under the standards established under
Section 830.002(d).

SECTION 3. Emergency clause.
           Effective date: upon passage.