LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 17, 1997
         
         
      TO: Honorable Barry Telford, Chair            IN RE:  House Bill No. 1638
          Committee on Pensions and Investments                              By: Kuempel
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB1638 ( Relating 
to participation and credit in, contributions to, and benefits 
and administration of the Texas County and District Retirement 
System.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB1638-As Introduced
         
No fiscal impact to the state is anticipated.
         

         
 
          
Passage of House Bill 1638 would allow the Texas County and 
District Retirement System (TCDRS) to change asset investment 
policies, change the maximum amortization period for a municipality's 
actuarial liabilities, make technical changes intended to comply 
with federal law, and allow more flexibility in contribution 
rates. The changes in asset investment policies would allow 
for investment in equities which would be expected to increase 
the rate of return with only a slight increase (or possible 
decrease) in risk. Without this change the TCDRS actuary would 
recommend a lower investment return which would result in increased 
costs to participating employers . 

The provision to allow 
employers to contribute more than is currently allowed could 
increase costs for some employers, but only at their discretion. 
Decreasing the amortization rate for overfunded actuarial liabilities 
would result in some cost savings for certain employers. For 
example, TCDRS estimates Polk County would save $13,024 annually 
and McCullough County would save $1,424 annually. Decreasing 
the allowable amortization period for unfunded actuarial liabilities 
could either result in additional costs for certain employers, 
or in reduced benefits, depending on the preferences and actions 
of the employer.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,PE ,WM