LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                             February 8, 1999
  
  
          TO:  Honorable Florence Shapiro, Chair, Senate Committee on
               State Affairs
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB82  by Brown, J.E. "Buster" (Relating to benefits
               payable by the Judicial Retirement System of Texas Plan
               Two.), As Introduced
  
**************************************************************************
*  Two-year Net Impact to General Revenue Related Funds for SB82, As     *
*  Introduced:  negative impact of $(12,157,000) through the biennium    *
*  ending August 31, 2001.                                               *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                         $(5,942,000)  *
          *       2001                          (6,215,000)  *
          *       2002                          (6,307,000)  *
          *       2003                          (6,490,000)  *
          *       2004                          (6,596,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
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*Fiscal    Probable Savings/(Cost) from    Probable Savings/(Cost) from   *
* Year         General Revenue Fund               Judicial Fund           *
*                      0001                            0573               *
*  2000                      $(5,942,000)                      $(967,000) *
*  2001                       (6,215,000)                     (1,012,000) *
*  2002                       (6,307,000)                     (1,027,000) *
*  2003                       (6,490,000)                     (1,056,000) *
*  2004                       (6,596,000)                     (1,074,000) *
***************************************************************************
  
Technology Impact
  
None.
  
  
Fiscal Analysis
  
The bill would change the retirement annuities for Judicial Retirement
Plan Two (JRS 2) members to be based on the state salary, as adjusted
from time to time, of a judge of the court on which the retiring member
last served.  Currently, retirement annuities are based on the state
salary being paid at the time of retirement without any later
adjustments.  The change applies to current and future JRS 2 annuitants.
  
  
Methodology
  
The increase in retirement annuities would increase the unfunded
liabilities of the JRS 2 fund by $39.8 million.  As a result, the
unfunded liability could not be amortized within the statutorily
required 31 years.  In order to meet this requirement, the state's
contribution rate would have to increase from the current 16.83% to
34.89%.
  
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   327   Employees Retirement Sys
LBB Staff:         JK, SD, SC