FISCAL NOTE

House Bill 379 as amended and reported by the Committee on Ways and Means Education would enact the Education Retirees' Trust Fund Funding Act of 2021, which provides for the creation of an irrevocable trust (the "Education Retirees' Trust Fund") to be managed and controlled by the members of the Teachers' Retirement System (TRS) Board of Control for the purpose of providing periodic bonus checks to education retirees and their beneficiaries. This bill provides that contributions to the trust may include the following: (1) investment income; (2) proceeds of any gifts, grants, or contributions; (3) revenue sources as directed by the Legislature; and (4) revenue sources other than direct appropriations by the Legislature. This bill further provides that in addition to providing periodic bonus checks, funds of the trust may only be used to (1) acquire permitted investments; (2) pay administrative expenses; and (3) pay the expenses of making and disposing of investments, legal expenses referable to a particular transaction, transfer taxes, and other customary transactional expenses with respect to a trust.

In addition, this bill provides that upon certification from the TRS actuary that the assets of the trust fund exceed $100 million and are sufficient to fund periodic bonus checks as provided for by legislation granting the periodic bonus checks, the trustees shall transfer the amount certified by the board of control to the TRS to fund those bonuses or increases.

This bill further provides that: (1) the Legislature may not appropriate the assets of the trust fund; (2) all assets and income of the trust are exempt from state taxation;, and (3) distributions from the trust are not considered taxable income to the retired employees or their beneficiaries.