LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 1, 1997
         
         
      TO: Honorable Barry Telford, Chair            IN RE:  Senate Bill No. 701, Committee Report 2nd House, as amended
          Committee on Pensions and Investments                              By: Armbrister
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB701 ( Relating 
to certain responsibilities of the comptroller relating to investment 
and management of funds.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB701-Committee Report 2nd House, as amended
         
The bill would amend the Government Code to expand the list 
of authorized investments for state funds, not deposited in 
state depositories, to include foreign currency for the sole 
purpose of facilitating investments by state agencies that have 
the authority to invest in foreign securities.  Any risk of 
gain or loss due to foreign currency exchange rate fluctuations 
would accrue to the agency that is the owner of the funds.  
Thus, there could be a gain or loss to the authorized agency. 
 However, the amount of gain or loss to the state would depend 
on foreign currency fluctuations.

The bill would also amend 
the Education Code and the Government Code to allow the custodians 
of the Permanent University Fund (PUF), the Permanent School 
Fund, the Teachers Retirement System and the Employees Retirement 
System to reinvest funds from investment transactions within 
one business day without depositing the funds into the State 
Treasury.  It will also allow the PUF investment income to be 
deposited once a month.  Currently, the PUF investment income 
is deposited within five days.  Although some administrative 
efficiencies should be realized, no significant fiscal impact 
is anticipated.

         

         
 
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,PE