LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                                May 9, 2001
  
  
          TO:  Honorable Dale B. Tillery, Chair, House Committee on
               Pensions & Investments
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB734  by Duncan (Relating to a report by the Legislative
               Budget Board on the performance of the state's major
               investment funds), Committee Report 2nd House,
               Substituted
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would require the Texas Legislative Budget Board (LBB) to
prepare and publish an annual report on certain state investment funds.
Funds contained in the report would be those that, in the opinion of the
board, contain a relatively large amount of assets and are (1)
established by statute or by the Texas Constitution or (2) administered
by or under contract with a public retirement system defined by Section
802.001 of the Government Code, an institution of higher education, or
any other entity of state government.  The report would compare the
risk-adjusted performance of the funds and, within and among the funds,
examine the performance of similar asset classes and comparable
portfolios within asset classes.

The LBB intends to contract with the State Auditor's Office (SAO) since
they have experience in this type of analysis.  The annual contracted
costs with the SAO would be approximately $35,000.  Additional FTE
requirements on the part of the LBB could be absorbed within existing
resources.
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   
LBB Staff:         JK, RB, WP