LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 15, 1997 TO: Honorable Rene Oliveira, Chair IN RE: House Bill No. 3512, Committee Report 1st House, Substituted Committee on Economic Development By: Greenberg House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB3512 ( Relating to assistance or benefits provided to state employees who lose their jobs as a result of a reduction in force or the privatization of state services or who retire.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB3512-Committee Report 1st House, Substituted No significant fiscal implication to the State is anticipated. Similar annual fiscal implications This bill would provide service retirement benefits from the Employees Retirement System (ERS) to any employee class member who is at least 50 years of age, whose position is eliminated by a reduction in workforce of more than 25 positions or the privatization of more than 25 positions, and who would be eligible for service retirement by adding three years of age. The retirement provision in the bill is only applicable during the 1998-99 biennium, and members must retire when first eligible during the incentive period. Once an employee retires, ERS would submit to the Comptroller's office information about the employee's monthly salary and the Comptroller's office would reduce appropriations to the agency by this amount times the number of months remaining in the biennium. It is not possible to estimate how many members would be eligible for this enhanced eligibility for service retirement because the number of positions that might be eliminated during the next biennium is not known. Furthermore, of the total number of employees that might be affected, not all would be eligible to retire or choose to retire. HB 3512, as substituted, provides that a state employee whose position is eliminated due to a reduction in force or privatization would receive preferential treatment in employment with other state agencies. The bill also directs the Texas Workforce Commission (TWC) to provide a variety a outplacement services to former employees of state agency that implemented a reduction in force or eliminated 25 or more positions due to privatization of certain services. The Texas Workforce Commission projects that there will be no fiscal impact from the provisions of this bill that apply directly to that agency. Most services called for by the bill are currently provided to all job-seekers, whether or not they are former state employees. No fiscal implication to units of local government is anticipated. Source: Agencies: 327 Employees Retirement System LBB Staff: JK ,TH ,SC ,RA