LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 31, 1997
TO: Honorable Barry Telford, Chair IN RE: House Bill No. 862
Committee on Pensions and Investments By: Chisum
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB862 ( Relating
to credit in the Employees Retirement System of Texas for service
as a peace officer.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB862-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(966,240) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
HB 862 would allow law enforcement and custodial officer members
of the Employees Retirement System (ERS) to purchase service
credit for previous service as a commissioned peace officer
that is not credited to another system. The member may purchase
up to 60 months of previous peace officer service and can purchase
the service over a five year period. The member must contribute
an amount based on the member contribution rate and the salary
paid to the member for the service to be established, accumulated
at 5% interest. The state must also make a contribution, at
6.0% of salary, at the time the service is purchased.
Methodolgy
The cost to the state for the state's contribution for the service
purchases is estimated to be $483,120 per year. There are an
estimated 1,000 members with an average of 2.64 years of previous
service who would be eligible. The actuary for the ERS assumes
that the average salary per member is $15,250, and that all
eligible members purchase credit for the previous service over
a five year period.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from General
Revenue Fund
0001
1998 ($483,120)
1998 (483,120)
2000 (483,120)
2001 (483,120)
2002 (483,120)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($483,120)
1999 (483,120)
2000 (483,120)
2001 (483,120)
2002 (483,120)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect, although at a decreased
cost because only newly hired employees would be making the
service purchases.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 327 Employees Retirement System
LBB Staff: JK ,PE ,SC