LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 19, 1997
         
         
      TO: Honorable Barry Telford, Chair            IN RE:  Senate Bill No. 1923, As Engrossed
          Committee on Pensions and Investments                              By: Ratliff
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1923 ( relating 
to the use of state funds for certain investments) this office 
has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1923-As Engrossed
         
No significant fiscal implication to the State is anticipated.
         

         
 
The bill would amend the Government Code by prohibiting the 
Comptroller, state entities including institutions of higher 
education as defined by the Education Code, the Teacher Retirement 
System, the Employees Retirement System, the Texas County and 
District Retirement System, and the Texas Municipal Retirement 
System from investing in securities of a company that directly 
or indirectly through ownership of 10 percent or more of another 
corporation or business entity, writes, records, produces, advertises, 
markets, sells, or otherwise promotes any song, lyrics, or other 
musical work that explicitly describes, glamorizes, or advocates 
various behaviors specified in the bill.  An entity that owned 
an investment prohibited by this bill would be required to divest 
the investment as soon as practical considering protection of 
capital, but no later than January 1, 1999.

The investing 
entities would incur administrative costs in order to monitor 
the activities and ownership of companies in which state monies 
are invested.  These costs could be absorbed within available 
resources.

The funds would incur transactions costs associated 
with the divestment of the affected investments and the reinvestment 
of those proceeds in other investment vehicles.  The amount 
of these costs would depend on the amount of stock liquidated, 
and could vary substantially depending on the number of companies 
that are ultimately determined to fall under the prohibition 
contained in the bill. 
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   781   Higher Education Coordinating Board
                                         327   Employees Retirement System
                                         304   Comptroller of Public Accounts
                                         720   University of Texas System Administration
                                         701   Texas Education Agency - Administration
                                         323   Teacher Retirement System and Optional Retirement Program
                                         
                      LBB Staff:   JK ,PE ,SC