LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 9, 1997
         
         
      TO: Honorable Eddie Lucio, Jr., Chair            IN RE:  Senate Bill No. 1209, Committee Report 1st House, Substituted
          Committee on Intergovernmental Relations                              By: Barrientos
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1209 ( Relating 
to participating in the proportionate retirement program for 
public employees.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1209-Committee Report 1st House, Substituted
         
No significant fiscal implication to the State is anticipated.
         

         
 
Under current statutes, a retiree from the Employees Retirement 
System (ERS) who has a total of 10 years of credit under the 
proportionate retirement program is eligible to participate 
in the Uniform Group Insurance Program (UGIP) and receive a 
state contribution for health insurance with as little as one 
month of credit in the ERS.  This bill would expand the number 
of retirement systems eligible to participate in the proportionate 
retirement program.  As a result, there could be additional 
ERS members who qualify for state contributions for health insurance 
during retirement.  At current contribution rates, the average 
state contribution for coverage for each additional retired 
member would be $2,740 per year.

LOCAL GOVERNMENT

Participating 
systems incur actuarial losses when members retire under the 
proportionate retirement program.  The actuarial impact on a 
particular retirement system will not be known until the provisions 
of this legislation are utilized.  It is possible that a municipal 
retirement system that elected to join the proportionate retirement 
program would incur actuarial losses large enough to require 
an increase in contributions by the municipality that finances 
the system.
          
   Source:            Agencies:   327   Employees Retirement System
                                         304   Comptroller of Public Accounts
                                         323   Teacher Retirement System and Optional Retirement Program
                                         
                      LBB Staff:   JK ,TL ,SC