LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION March 31, 2023 TO: Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HJR2 by Bonnen (proposing a constitutional amendment authorizing the legislature to provide cost-of-living adjustments or other benefit enhancements to eligible annuitants of the Teacher Retirement System of Texas and providing a one-time transfer of funds for contributions, actuarially determined payments, and benefit enhancements.), Committee Report 1st House, Substituted No significant fiscal implication to the State is anticipated, other than the cost of publication. The cost to the state for publication of the resolution is $204,406. This resolution would propose an amendment to Section 67-a, Article XVI, of the Texas Constitution that would authorize the Legislature to provide a onetime or ongoing benefit enhancements to eligible annuitants of the Teacher Retirement System (TRS). The benefit enhancement would be contingent on an accompanying appropriation of funds sufficient to fully pay for the benefit enhancement.According to the Pension Review Board, TRS is considered actuarially sound, with an amortization period of 27 years as of August 31, 2023. Government Code, Section 821.006 defines actuarial soundness, for the purposes of making modifications to benefit and contribution levels, as less than 31 years. The benefit enhancement would take place only if the fund is considered actuarially sound. The approval of the proposed amendment to Section 67-a of Article XVI by voters would result in a cost to the state of $3.45 billion for the purposes of providing the benefit enhancements. Although the resolution is self-enabling, the fiscal impact is shown in the fiscal note for HB 600. These funds would be transferred to TRS in the 2024 fiscal year after the amendment takes effect and would not be considered an appropriation of state tax revenues. The proposed amendment would be submitted to voters at an election to be held November 7, 2023. Local Government ImpactNo fiscal implication to units of local government is anticipated. Source Agencies: b > td > 304 Comptroller of Public Accounts, 323 Teacher Retirement System LBB Staff: b > td > JMc, MOc, ASA, MMo
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
March 31, 2023
TO: Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HJR2 by Bonnen (proposing a constitutional amendment authorizing the legislature to provide cost-of-living adjustments or other benefit enhancements to eligible annuitants of the Teacher Retirement System of Texas and providing a one-time transfer of funds for contributions, actuarially determined payments, and benefit enhancements.), Committee Report 1st House, Substituted
TO: Honorable Giovanni Capriglione, Chair, House Committee on Pensions, Investments & Financial Services
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HJR2 by Bonnen (proposing a constitutional amendment authorizing the legislature to provide cost-of-living adjustments or other benefit enhancements to eligible annuitants of the Teacher Retirement System of Texas and providing a one-time transfer of funds for contributions, actuarially determined payments, and benefit enhancements.), Committee Report 1st House, Substituted
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
HJR2 by Bonnen (proposing a constitutional amendment authorizing the legislature to provide cost-of-living adjustments or other benefit enhancements to eligible annuitants of the Teacher Retirement System of Texas and providing a one-time transfer of funds for contributions, actuarially determined payments, and benefit enhancements.), Committee Report 1st House, Substituted
HJR2 by Bonnen (proposing a constitutional amendment authorizing the legislature to provide cost-of-living adjustments or other benefit enhancements to eligible annuitants of the Teacher Retirement System of Texas and providing a one-time transfer of funds for contributions, actuarially determined payments, and benefit enhancements.), Committee Report 1st House, Substituted
No significant fiscal implication to the State is anticipated, other than the cost of publication. The cost to the state for publication of the resolution is $204,406.
No significant fiscal implication to the State is anticipated, other than the cost of publication. The cost to the state for publication of the resolution is $204,406.
This resolution would propose an amendment to Section 67-a, Article XVI, of the Texas Constitution that would authorize the Legislature to provide a onetime or ongoing benefit enhancements to eligible annuitants of the Teacher Retirement System (TRS). The benefit enhancement would be contingent on an accompanying appropriation of funds sufficient to fully pay for the benefit enhancement.According to the Pension Review Board, TRS is considered actuarially sound, with an amortization period of 27 years as of August 31, 2023. Government Code, Section 821.006 defines actuarial soundness, for the purposes of making modifications to benefit and contribution levels, as less than 31 years. The benefit enhancement would take place only if the fund is considered actuarially sound. The approval of the proposed amendment to Section 67-a of Article XVI by voters would result in a cost to the state of $3.45 billion for the purposes of providing the benefit enhancements. Although the resolution is self-enabling, the fiscal impact is shown in the fiscal note for HB 600. These funds would be transferred to TRS in the 2024 fiscal year after the amendment takes effect and would not be considered an appropriation of state tax revenues. The proposed amendment would be submitted to voters at an election to be held November 7, 2023.
This resolution would propose an amendment to Section 67-a, Article XVI, of the Texas Constitution that would authorize the Legislature to provide a onetime or ongoing benefit enhancements to eligible annuitants of the Teacher Retirement System (TRS). The benefit enhancement would be contingent on an accompanying appropriation of funds sufficient to fully pay for the benefit enhancement.
According to the Pension Review Board, TRS is considered actuarially sound, with an amortization period of 27 years as of August 31, 2023. Government Code, Section 821.006 defines actuarial soundness, for the purposes of making modifications to benefit and contribution levels, as less than 31 years. The benefit enhancement would take place only if the fund is considered actuarially sound.
The approval of the proposed amendment to Section 67-a of Article XVI by voters would result in a cost to the state of $3.45 billion for the purposes of providing the benefit enhancements. Although the resolution is self-enabling, the fiscal impact is shown in the fiscal note for HB 600. These funds would be transferred to TRS in the 2024 fiscal year after the amendment takes effect and would not be considered an appropriation of state tax revenues.
The proposed amendment would be submitted to voters at an election to be held November 7, 2023.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 304 Comptroller of Public Accounts, 323 Teacher Retirement System
304 Comptroller of Public Accounts, 323 Teacher Retirement System
LBB Staff: b > td > JMc, MOc, ASA, MMo
JMc, MOc, ASA, MMo