BILL ANALYSIS

C.S.H.B. 903

By: Capriglione

Appropriations

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Noting the recent rate of returns on economic stabilization fund investments and the expected balance of the fund in the near future, interested parties contend that there is ample money in short-term assets to meet emergency needs and suggest changing the investment strategy for the fund to increase the fund's earnings potential. C.S.H.B. 903 seeks to address this issue.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 903 amends the Government Code to require the comptroller of public accounts to invest a percentage of the economic stabilization fund balance in a state fiscal biennium that exceeds the amount of the sufficient balance of the fund adopted for that biennium in accordance with the statutorily prescribed standard that, in the absence of a conflicting standard established by law, requires an investment to be made under the restrictions and procedures for making the investments that persons of ordinary prudence, discretion, and intelligence, exercising the judgment and care under the prevailing circumstances, would follow in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital. The bill establishes that the comptroller's investment of that percentage of the excess balance is not subject to any other limitation or other requirement provided by statutory provisions governing authorized investments of state funds.

C.S.H.B. 903 requires the comptroller to periodically adjust the investment portfolio of economic stabilization fund money to ensure that the balance of the fund is sufficient to meet the cash flow requirements of the fund and to include the fair market value of the investment portfolio of the fund in calculating the amount in the fund for purposes of constitutional provisions relating to the maximum authorized balance of the fund and statutory provisions relating to the adjustment of constitutional allocations to the economic stabilization fund and the state highway fund. The bill's provisions expire on the expiration date of statutory provisions relating to the determination of a sufficient balance of the economic stabilization fund.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2015.

COMPARISON OF ORIGINAL AND SUBSTITUTE

While C.S.H.B. 903 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.