LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 5, 1995 TO: Honorable Ken Armbrister, Chair IN RE: Senate BillNo. 1116 Committee on State Affairs By: Leedom Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 1116 (Relating to the Texas Incentive and Productivity Commission and its operation of the state employee incentive program and the productivity bonus program.) this office has determined the following: 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 modify the way that suggestion savings are allocated under the State Employee Incentive Program (SEIP). The bill would authorize an administrative appropriation to the Texas Incentive and Productivity Commission (TIPC) from each state agency's appropriations. The bill would also re-create the Productivity Bonus Fund as an account within the General Revenue Fund. Current law allocates 40 percent of the total savings from each suggestion to the affected fund (ie to the state), 40 percent to the agency that employs the person who made the suggestion, and 20 percent to the Texas Incentive and Productivity Commission. Out of the 20 percent allocation, TIPC awards the lesser of 10 percent of the savings or $5,000 to the person who made the suggestion. TIPC keeps the remainder to cover its administrative costs -- subject to expenditure limits in the General Appropriations Act. State law allows a group of employees to submit suggestions and receive an award, subject to the same limit that applies for individual employees. The bill would alter this allocation policy so that all suggestion savings would be transferred into "state agency reinvestment accounts". Out of these accounts, state agencies, rather than the TIPC, would provide monetary awards to "suggestors" . The remainder of the savings would be used by the agency for employee training or capital expenditures to improve productivity. Because the state general revenue fund, and other affected funds, would no longer receive an allocation from suggestion savings, a loss of revenue to these funds would result from implementation of this bill. For fiscal year 1994, the state's share of the TIPC-reported savings of $1.7 million equals approximately $680,000 (allocated to all funds). The TIPC anticipates that more agencies will participate in the SEIP under the revised allocation policy provided by this bill. The fiscal impact of increased participation cannot be determined. Also, the bill would provide an administrative appropriation to the TIPC out of the appropriations made to each state agency. If agencies are not provided additional appropriations to help them cover this "administrative appropriation", then this provision would have no fiscal implications to the state. However, if agencies are provided additional appropriations, then this provision would result in increased costs. The fiscal implications of this provision, therefore, cannot be determined. The bill would re-create the Productivity Bonus Fund Account in the general revenue fund. Because the Comptroller did not show a revenue stream for this account in the 1996-1997 biennial revenue estimate, this provision is not expected to have any material fiscal implications. No fiscal implication to units of local government is anticipated. Source: Incentive and Productivity Commission LBB Staff: JK, RN, DF