SRC-CTC S.B. 490 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 490
77R641 ESH-DBy: Ellis, Rodney
Education
3/2/2001
As Filed


DIGEST AND PURPOSE 

Since 1990, the permanent school fund (PSF) has grown by over 100 percent
with a significant increase in both realized and unrealized capital gains.
However, the benefit to schools of the available school fund (ASF), which
consists of certain income deriving from PSF and motor fuels taxes,  has
recently remained flat, and appears to be declining.  As proposed, S.B. 490
allows PSF to be managed under a total return approach to allow the fund to
benefit from capital gains.  This increase in income is dedicated to
funding health insurance for school employees. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 43, Education Code, to read as follows:

CHAPTER 43.  New heading:  PERMANENT SCHOOL FUND, AVAILABLE SCHOOL FUND,
AND PUBLIC SCHOOL EMPLOYEE HEALTH INSURANCE FUND 

SECTION 2.  Amends Section 43.001, Education Code, to read as follows:

Sec. 43.001.  New heading: COMPOSITION OF PERMANENT SCHOOL FUND, AVAILABLE
SCHOOL FUND, AND PUBLIC SCHOOL EMPLOYEE HEALTH FUND. Provides an exception
to the composition of the permanent school fund.  Provides that the
available school fund consists of certain distributions from the permanent
school fund, rather than specific interest, dividends, and money arising or
derived from the permanent school fund. Provides that the public school
employee health insurance fund (insurance fund) consists of certain
distributions from the permanent school fund and certain appropriations
made by the legislature. 

SECTION 3.  Amends Section 43.002, Education Code, to read as follows:

Sec. 43.002.  New heading: TRANSFERS FROM PERMANENT SCHOOL FUND AND GENERAL
REVENUE FUND TO AVAILABLE SCHOOL FUND AND PUBLIC SCHOOL EMPLOYEE HEALTH
INSURANCE FUND.  Requires the comptroller to, on the first working day of
each month in a state fiscal year, transfer certain amounts from the
permanent school fund to the available school fund and the insurance fund. 

SECTION 4.  Amends Chapter 43, Education Code, by adding Section 43.020, as
follows: 

Sec. 43.020.  MANAGEMENT AND USE OF PUBLIC SCHOOL EMPLOYEE HEALTH INSURANCE
FUND.  Provides that the insurance fund is under the management of the
board of trustees of the Teacher Retirement System of Texas (TRS).
Authorizes TRS to use money in  the insurance fund only to provide and
administer the group health insurance under the Texas School Employees
Uniform Group Health Insurance Benefits Act (Article 3.50-7, Insurance
Code). 

SECTION 5.  Repealer: Section 43.008, Education Code (Treatment of Premium
and Discount). 

SECTION 6.  Effective date: September 1, 2002.  Makes application of this
Act contingent upon approval by the voters of the constitutional amendment
proposed by the 77th Legislature, Regular Session, 2001, relating to the
use of income and appreciation of the permanent school fund.