LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 18, 2025 TO: Honorable Joan Huffman, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB1737 by Huffman (Relating to service retirement benefits payable by the Employees Retirement System of Texas to certain law enforcement officers and custodial officers.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1737, As Introduced: a negative impact of ($40,236,264) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2026($38,368,132)2027($1,868,132)2028($1,868,132)2029($1,868,132)2030($1,868,132)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGR Dedicated Accounts994 Probable Savings/(Cost) fromFederal Funds5552026($38,368,132)($38,360)($11,508)2027($1,868,132)($38,360)($11,508)2028($1,868,132)($38,360)($11,508)2029($1,868,132)($38,360)($11,508)2030($1,868,132)($38,360)($11,508) Fiscal AnalysisThe bill would amend the Government Code to make certain members of the Texas Juvenile Justice Department (TJJD), Comptroller of Public Accounts (CPA), and Office of the Attorney General (OAG) eligible to receive benefits in the Law Enforcement and Custodial Officer Supplemental Retirement Fund (LECOS). Under the provisions of the bill, the additional members added to LECOS from TJJD, the CPA, and the OAG hired before September 1, 2022 (Groups 1-3), and employed on December 1, 2024, would have previous service credit established in LECOS if the Employees Retirement System of Texas (ERS) was appropriated the funds required to cover the previous service credit. For those hired on or after September 1, 2022 (Group 4), LECOS service credit would be earned beginning September 1, 2025.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 18, 2025
TO: Honorable Joan Huffman, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB1737 by Huffman (Relating to service retirement benefits payable by the Employees Retirement System of Texas to certain law enforcement officers and custodial officers.), As Introduced
TO: Honorable Joan Huffman, Chair, Senate Committee on Finance
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: SB1737 by Huffman (Relating to service retirement benefits payable by the Employees Retirement System of Texas to certain law enforcement officers and custodial officers.), As Introduced
Honorable Joan Huffman, Chair, Senate Committee on Finance
Honorable Joan Huffman, Chair, Senate Committee on Finance
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB1737 by Huffman (Relating to service retirement benefits payable by the Employees Retirement System of Texas to certain law enforcement officers and custodial officers.), As Introduced
SB1737 by Huffman (Relating to service retirement benefits payable by the Employees Retirement System of Texas to certain law enforcement officers and custodial officers.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1737, As Introduced: a negative impact of ($40,236,264) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1737, As Introduced: a negative impact of ($40,236,264) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
2026 ($38,368,132)
2027 ($1,868,132)
2028 ($1,868,132)
2029 ($1,868,132)
2030 ($1,868,132)
All Funds, Five-Year Impact:
2026 ($38,368,132) ($38,360) ($11,508)
2027 ($1,868,132) ($38,360) ($11,508)
2028 ($1,868,132) ($38,360) ($11,508)
2029 ($1,868,132) ($38,360) ($11,508)
2030 ($1,868,132) ($38,360) ($11,508)
Fiscal Analysis
The bill would amend the Government Code to make certain members of the Texas Juvenile Justice Department (TJJD), Comptroller of Public Accounts (CPA), and Office of the Attorney General (OAG) eligible to receive benefits in the Law Enforcement and Custodial Officer Supplemental Retirement Fund (LECOS). Under the provisions of the bill, the additional members added to LECOS from TJJD, the CPA, and the OAG hired before September 1, 2022 (Groups 1-3), and employed on December 1, 2024, would have previous service credit established in LECOS if the Employees Retirement System of Texas (ERS) was appropriated the funds required to cover the previous service credit. For those hired on or after September 1, 2022 (Group 4), LECOS service credit would be earned beginning September 1, 2025.
Under the provisions of the bill, the additional members added to LECOS from TJJD, the CPA, and the OAG hired before September 1, 2022 (Groups 1-3), and employed on December 1, 2024, would have previous service credit established in LECOS if the Employees Retirement System of Texas (ERS) was appropriated the funds required to cover the previous service credit. For those hired on or after September 1, 2022 (Group 4), LECOS service credit would be earned beginning September 1, 2025.
Methodology
According to ERS, the bill would impact approximately 1,661 juvenile justice officers and peace officers, as shown in the table below. TJJD CPA OAG Total Groups 1-3 632 31 164 827 Group 4 793 <10 33 834 Total 1,425 39 197 1,661 According to the agency, the bill would increase the unfunded liabilities and the normal cost of the ERS plan, resulting in a one-time lump cost of $26,400,000 in General Revenue funds. The bill would also increase the unfunded liabilities of the LECOS plan, resulting in a one-time lump sum cost of $10,100,000 in General Revenue funds. In each year, state contribution costs to LECOS would increase by $1.9 million in General Revenue funds, $38,360 in General Revenue-Dedicated funds, and $11,508 in federal funds to cover the employer contribution rate of 1.75 percent of payroll.
TJJD CPA OAG Total Groups 1-3 632 31 164 827 Group 4 793 <10 33 834 Total 1,425 39 197 1,661
TJJD CPA OAG Total Groups 1-3 632 31 164 827 Group 4 793 <10 33 834 Total 1,425 39 197 1,661 TJJD CPA OAG Total Groups 1-3 632 31 164 827 Group 4 793 <10 33 834 Total 1,425 39 197 1,661
TJJD CPA OAG Total
Groups 1-3 632 31 164 827
Group 4 793 <10 33 834
Total 1,425 39 197 1,661
TJJD CPA OAG Total
Groups 1-3 632 31 164 827
Group 4 793 <10 33 834
Total 1,425 39 197 1,661
TJJD
CPA
OAG
Total
Groups 1-3
632
31
164
827
Group 4
793
<10
33
834
Total
1,425
39
197
1,661
According to the agency, the bill would increase the unfunded liabilities and the normal cost of the ERS plan, resulting in a one-time lump cost of $26,400,000 in General Revenue funds. The bill would also increase the unfunded liabilities of the LECOS plan, resulting in a one-time lump sum cost of $10,100,000 in General Revenue funds. In each year, state contribution costs to LECOS would increase by $1.9 million in General Revenue funds, $38,360 in General Revenue-Dedicated funds, and $11,508 in federal funds to cover the employer contribution rate of 1.75 percent of payroll.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 327 Employees Retirement System, 338 Pension Review Board
327 Employees Retirement System, 338 Pension Review Board
LBB Staff: b > td > JMc, KK, LCO, JPO, NV
JMc, KK, LCO, JPO, NV