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The bill would remove the outdated investment list of possible investments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.