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 ************************************************************************** * 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: *************************************************************************** *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