LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 30, 2001
TO: Honorable Dale B. Tillery, Chair, House Committee on
Pensions & Investments
FROM: John Keel, Director, Legislative Budget Board
IN RE: HJR77 by Wilson (Proposing a constitutional amendment to
restore the traditional prudent person standard for
investment of the permanent university fund.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HJR77, As Introduced: negative impact of $(80,000) 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(80,000) *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year Available University Fund General Revenue Fund *
* 0011 0001 *
* 2002 $(7,100,000) $(80,000) *
* 2003 0 0 *
* 2004 0 0 *
* 2005 0 0 *
* 2006 0 0 *
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Fiscal Analysis
If passed, this resolution would propose an amendment to Section 116,
Article VII, Texas Constitution to restore the traditional "prudent
person" standard for investments of the Permanent University Fund (PUF).
This proposed constitutional amendment would be submitted to the voters
at an election to be held November 6, 2001.
Methodology
Based on analysis by The University of Texas System, the amendment would
result in additional transaction costs of $7.1 million to convert the
current asset mix of the PUF to the prudent person standard. In
addition, the Secretary of State estimates the cost to prepare,
translate and publish the constitutional amendment to be $80,000.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 307 Secretary of State, 720 The University of
Texas System, 781 Texas Higher Education
Coordinating Board, 710 The Texas A&M University
System, 304 Comptroller of Public Accounts
LBB Staff: JK, RB, DB, HM