SBW H.B. 803 75(R)BILL ANALYSIS PENSIONS & INVESTMENTS H.B. 803 By: Kuempel 2-26-97 Committee Report (Unamended) BACKGROUND The Statewide Volunteer Fire Fighters' Act covers 146 volunteer fire departments throughout the state. In Section 14 of the act, the statute contains a specific list of investments in which the board of trustees can invest. Virtually every retirement system in the nation has had these specific lists of investments deleted from their statutes and replaced them with the industry standard for investment funds -- The Prudent Person Rule. The Prudent Person Rule grants the boards of trustees, who use professional fund managers, the flexibility to develop maximum portfolio returns for their retirees. PURPOSE The bill would remove the outdated investment list of possible investments from the Statewide Volunteer Fire Fighters' Act and allow the board of trustees to work under the industry standard Prudent Person Rule. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 14(b), Texas Statewide Volunteer Fire Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil Statutes) by the addition of the language which specifies the manner in which the commissioner and state board of trustees may make investments of the fund. They are to make judgements as if they were managing their own affairs. This section also strikes language which gave a more specific account of the types of items in which investments could be made. SECTION 2. Emergency Clause.