HBA-JEK C.S.S.B. 734 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 734 By: Duncan Pensions & Investments 5/9/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, state entities that invest state treasury funds typically issue an annual report regarding the performance of their funds. C.S.S.B. 734 requires the Legislative Budget Board to publish an annual report on the risk-adjusted performance of the state's major investment funds. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.S.B. 734 amends the Government Code to require the Legislative Budget Board (LBB) to evaluate and publish an annual report on the risk-adjusted performance of each state investment fund that contains a relatively large amount of assets belonging to or administered by the state. The bill requires the LBB in its report to compare the risk-adjusted performance of the funds and to examine the performance of similar asset classes and comparable portfolios within asset classes. The bill requires each state governmental entity or person that administers a state investment fund to provide information the LBB requests regarding the performance of the fund. The bill requires the LBB in its report to use terminology and a format that a person without technical investment expertise can understand. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 734 differs from the original bill by specifying that the Legislative Budget Board report on the performance of each state investment fund is to be based on the risk-adjusted performance of each fund. The substitute removes the provision that required the report to include information on any advisors and advisory committees to state investment funds.