LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                                May 3, 2001
  
  
          TO:  Honorable Dale B. Tillery, Chair, House Committee on
               Pensions & Investments
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB783  by Tillery (Relating to systems and programs
               administered by the Teacher Retirement System of Texas.),
               Committee Report 1st House, Substituted
  
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*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB783, Committee Report 1st House, Substituted:  negative impact      *
*  of $(275,000) through the biennium ending August 31, 2003.            *
*                                                                        *
*  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                *
          *       2002                           $(150,000)  *
          *       2003                            (125,000)  *
          *       2004                            (125,000)  *
          *       2005                            (125,000)  *
          *       2006                            (125,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
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*Fiscal    Probable Savings/(Cost) from     Change in Number of State     *
* Year         General Revenue Fund           Employees from FY 2001      *
*                      0001                                               *
*  2002                        $(150,000)                             2.0 *
*  2003                         (125,000)                             2.0 *
*  2004                         (125,000)                             2.0 *
*  2005                         (125,000)                             2.0 *
*  2006                         (125,000)                             2.0 *
***************************************************************************
  
Fiscal Analysis
  
The bill, as substituted, makes various changes to the retirement
programs administered  by the Teacher Retirement System (TRS).  The
provisions with a direct fiscal impact relate to new responsibilities
given to TRS to oversee 403(b) investment products offered to school
district employees.  TRS would be responsible for approving the
investment and annuity products before they could be marketed to school
district employees.
  
  
Methodology
  
It is estimated that 2 additional full-time-equivalent employees will be
needed by TRS to perform the new duties.  The associated cost is
estimated to be $150,000 in fiscal year 2002, and $125,000 in the
subsequent years.  According to TRS, the pension trust fund could not be
used to pay these costs, so general revenue funds would be needed.
  
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   323   Teacher Retirement System
LBB Staff:         JK, RB, SC