LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
March 6, 1995
TO: Honorable Ken Armbrister, Chair IN RE: Committee Substitute
Committee on State Affairs for Senate
Senate Bill No. 9
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
9 (relating to the functions and systems and programs
administered by the Teacher Retirement System of Texas) this
office has determined the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
The bill would implement the recommendations of the Sunset
Advisory Commission regarding the Teacher Retirement System.
Certain provisions of the bill would:
- Provide the greater of a post-retirement increase for TRS
retirees that would address 33.3 percent of the impact of
inflation and apply the retirement benefit provisions determined
under current law to the annuities of current annuitants OR raise
retirement annuities to the monthly minimum described below;
- Raise the monthly minimum benefit for future retired teachers
and librarians to a level that equals one-twelfth the minimum
annual salary for classroom teachers multiplied by 2 percent for
each year of service;
- Modify the governance of TRS;
- Modify certain management and reporting practices of the TRS;
- Provide for audits of the investment practices of TRS;
- Require the agency to comply with the state space allocation
standard, which would result in TRS leasing-out its excess space
and receiving rental income;
- Require the legislature to appropriate funds for the
administration of the retirement system. A cost to the state
general revenue fund would result from this provision. The TRS
board of trustees would be able to expend more than the amounts
appropriated in order to meet its fiduciary duties; and
-Establish a group insurance program for active employees of
public independent school districts. School districts and their
employees would pay the cost of insurance premiums. School
districts would pay the cost of TRS administrative expenses. The
current $10 annual fee paid by TRS members employed by school
districts would continue to be paid by those members through
fiscal year 1997. The legislature would be able to appropriate
funds for the purpose of expanding the program to active members.
All costs associated with implementing the provisions of the bill
are currently included as recommended appropriations in Senate
Bill 2 and House Bill 1 of the 74th Legislature (General
Appropriations Act).
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Cost Out Probable Savings
Year of General to the Teacher
Revenue Fund 001 Retirement System
Trust Fund No. 960
1996 $26,125,000 $26,125,000
1997 26,125,000 26,125,000
1998 26,125,000 26,125,000
1999 26,125,000 26,125,000
2000 26,125,000 26,125,000
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
No fiscal implication to units of local government is
anticipated.
Source: Sunset Advisory Commission
LBB Staff: JK, RN, DF