LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          April 19, 1995



 TO:     Honorable Ken Armbrister, Chair        IN RE:  Senate Bill No.
         Committee on State Affairs             1116,
         Senate                                               as amended
         Austin, Texas                                  By: Leedom









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:   LBB Staff: JK, BR, DF
               Texas Incentive and Productivity Commission