BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                          SB 1693  (Ortiz)
          
          Hearing Date:5/15/2000          Amended:As introduced  
          Consultant: Maureen Brooks          Policy Vote:P. E. & R.   
          3-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:   SB 1693 increases the minimum purchasing  
          power guarantee from the State Teachers' Retirement System'  
          (STRS) Supplemental Benefit Maintenance Account (SBMA) from  
          75% to 80% of the members initial monthly allowance.

                              Fiscal Impact (in thousands)
           
          Major Provisions            2000-01             2001-02              
           2002-03            Fund  
          
          Supplement pmt 
            Increase                      $30 million     $62.8 million        
          $69.4 million                      Special*

          *Supplemental Benefit Maintenance Account
          
          STAFF COMMENTS:  This bill meets the criteria to be placed  
          on the Suspense file.

          The SBMA is funded by a combination of a contribution from  
          the General Fund in an amount equal to 2.5% of annual  
          statewide teacher payroll, and payments from the sale or  
          use of federal school land grants.  There are currently  
          sufficient funds available in the SBMA to support this  
          increased supplemental payment for approximately 30 years.

          Under existing law, all STRS members and beneficiaries  
          receive an annual increase of 2% of the original allowance  
          (non-compounded COLA).  When the purchasing power of the  
          benefit, including the COLA, is determined to be less than  
          75% of the purchasing power of the initial STRS allowance,  
          the member or beneficiary receives a quarterly SBMA payment  
          to bring their allowance up to the 75% level.













          About 40,000 members and beneficiaries currently receive  
          the supplemental payments which restores the purchasing  
          power of their benefit to 75% of their initial monthly  
          allowance.    By increasing the supplemental payment to the  
          80% level, an additional 16,340 members will receive the  
          supplemental payments.

          SB 1026 (Schiff) Statutes of 1997 increased the purchasing  
          power protection from 68.2% to the current level of 75%.