LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 6, 1997
TO: Honorable Kenneth Armbrister, Chair IN RE: Senate Bill No. 535
Committee on State Affairs By: Ellis
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB535 ( Relating
to the investments of participants in the optional retirement
program for faculty members employed in state-supported retirement
institutions of higher education.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by SB535-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(183,382) 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
The bill would require the Higher Education Coordinating Board
to establish minimum standards for investment options offered
under the Optional Retirement Program. Governing boards of
the institutions of higher education may also establish minimum
standards that a company, or the investment it offers, must
meet.
Methodolgy
The Higher Education Coordinating Board estimates that one additional
staff member would be hired to implement the provisions of this
bill as they relate to the Coordinating Board. The first year
cost is estimated to be $97,581 for all expenses, with annual
costs of $85,801 thereafter.
No fiscal implication is assumed
for the higher education institutions because the bill does
not mandate that they establish standards. Furthermore, higher
education institutions currently have the option of implementing
minimum standards.
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 ($97,581)
1998 (85,801)
2000 (85,801)
2001 (85,801)
2002 (85,801)
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 ($97,581)
1999 (85,801)
2000 (85,801)
2001 (85,801)
2002 (85,801)
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: Agencies: 323 Teacher Retirement System and Optional Retirement Program
781 Higher Education Coordinating Board
LBB Staff: JK ,JD ,SC