LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION April 18, 2023 TO: Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2406 by Geren (Relating to service retirement benefits payable by the Employees Retirement System of Texas to commissioned peace officers employed by the attorney general.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2406, As Introduced : a negative impact of ($7,493,593) through the biennium ending August 31, 2025. The Employees Retirement System (ERS) and the Office of the Attorney General (OAG) are required to implement a provision of the bill only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, ERS and OAG may, but are not required to, implement a provision of the bill using other appropriations available for that purpose. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2024($7,211,324)2025($282,269)2026($282,269)2027($282,269)2028($282,269)All Funds, Five-Year Impact: Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Probable (Cost) fromGR Dedicated Accounts994 Probable Savings/(Cost) fromFederal Funds5552024($7,211,324)($112,680)($31,484)2025($282,269)($5,913)($1,652)2026($282,269)($5,913)($1,652)2027($282,269)($5,913)($1,652)2028($282,269)($5,913)($1,652) Fiscal AnalysisThe bill would amend the Government Code to allow law enforcement officers commissioned by the OAG to participate in the Law Enforcement and Custodial Officer Supplemental (LECOS) Plan. The OAG would be required to certify to ERS the names of employees and other information necessary for the crediting of service and financing of benefits under the LECOS plan.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
April 18, 2023
TO: Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2406 by Geren (Relating to service retirement benefits payable by the Employees Retirement System of Texas to commissioned peace officers employed by the attorney general.), As Introduced
TO: Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB2406 by Geren (Relating to service retirement benefits payable by the Employees Retirement System of Texas to commissioned peace officers employed by the attorney general.), As Introduced
Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services
Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB2406 by Geren (Relating to service retirement benefits payable by the Employees Retirement System of Texas to commissioned peace officers employed by the attorney general.), As Introduced
HB2406 by Geren (Relating to service retirement benefits payable by the Employees Retirement System of Texas to commissioned peace officers employed by the attorney general.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2406, As Introduced : a negative impact of ($7,493,593) through the biennium ending August 31, 2025. The Employees Retirement System (ERS) and the Office of the Attorney General (OAG) are required to implement a provision of the bill only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, ERS and OAG may, but are not required to, implement a provision of the bill using other appropriations available for that purpose.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2406, As Introduced : a negative impact of ($7,493,593) through the biennium ending August 31, 2025. The Employees Retirement System (ERS) and the Office of the Attorney General (OAG) are required to implement a provision of the bill only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, ERS and OAG may, but are not required to, implement a provision of the bill using other appropriations available for that purpose.
The Employees Retirement System (ERS) and the Office of the Attorney General (OAG) are required to implement a provision of the bill only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, ERS and OAG may, but are not required to, implement a provision of the bill using other appropriations available for that purpose.
General Revenue-Related Funds, Five- Year Impact:
2024 ($7,211,324)
2025 ($282,269)
2026 ($282,269)
2027 ($282,269)
2028 ($282,269)
All Funds, Five-Year Impact:
2024 ($7,211,324) ($112,680) ($31,484)
2025 ($282,269) ($5,913) ($1,652)
2026 ($282,269) ($5,913) ($1,652)
2027 ($282,269) ($5,913) ($1,652)
2028 ($282,269) ($5,913) ($1,652)
Fiscal Analysis
The bill would amend the Government Code to allow law enforcement officers commissioned by the OAG to participate in the Law Enforcement and Custodial Officer Supplemental (LECOS) Plan. The OAG would be required to certify to ERS the names of employees and other information necessary for the crediting of service and financing of benefits under the LECOS plan.
Methodology
The Government Code states that a new monetary benefit may not be established for LECOS unless the fund is actuarially sound. According to ERS, the LECOS fund is not currently actuarially sound. According to information previously provided by ERS, an appropriation of approximately $825.7 million would be required in order to make the fund sound as of August 31, 2024. This amount is included in House Bill 1, as engrossed, and is in assumed in this analysis.ERS estimates that approximately 185 individuals from the OAG would be added to LECOS under the provisions of the bill. According to an actuarial review utilizing the February 28, 2023 limited actuarial valuation, the cost of prefunding the actuarial liabilities for adding these individuals to LECOS is estimated by ERS to be a one-time cost of $7.1 million in All Funds. ERS estimates there will be an increased annual state contribution to LECOS of approximately $289,834 per year in All Funds.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 302 Office of the Attorney General, 327 Employees Retirement System
302 Office of the Attorney General, 327 Employees Retirement System
LBB Staff: b > td > JMc, MOc, LCO, JPO, NV
JMc, MOc, LCO, JPO, NV