LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session March 7, 1997 TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 701, Committee Report 1st House, Substituted Committee on Finance By: Armbrister Senate 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 1st House, Substituted 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: 720 University of Texas System Administration 304 Comptroller of Public Accounts LBB Staff: JK ,RR ,DB