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.