LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 26, 1997
TO: Honorable Ron Wilson, Chair IN RE: Senate Bill No. 432, Committee Report 2nd House, Substituted
Committee on Licensing & Administrative Procedures By: Lucio
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB432 ( relating
to the regulation and operation of bingo.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by SB432-Committee Report 2nd House, Substituted FN Revision 1
Implementing the provisions of the bill would result in a net
negative impact of $(5,213,446) to General Revenue Related Funds
through the biennium ending August 31, 1999.
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 amend the Government Code to
create the Texas Gaming Commission (gaming commission), which
would be composed of the members of the Texas Lottery Commission,
the members of the Texas Racing Commission, the Texas Bingo
Commissioner, the Comptroller, the State Auditor, and the presiding
officer of the Public Safety Commission. The Comptroller, the
State Auditor, and the presiding officer of the Public Safety
Commission, would serve as non-voting members.
Fiscal Analysis
The commission would be created to perform various functions
for the Texas Lottery Commission, the Texas Racing Commission,
and the newly-created Texas Bingo Commission. The gaming commission
would be required to hold at least six meetings per year.
The bill provides for offices in Austin and other areas as needed.
The bill would take effect September 1, 1997.
Both the new
gaming commission and the new bingo commission would become
subject to the Texas Sunset Act and would be abolished, unless
continued, September 1, 2003. The Governor would designate
one member of the gaming commission as presiding officer. The
bill sets certain eligibility standards for the bingo commissioner,
who would be appointed by and serve at the pleasure of the Governor.
The bill authorizes both the gaming commission and the bingo
commission to employ executive directors as at-will employees.
The executive directors of the two new agencies are authorized
to employ personnel as necessary. All employees would be employed
as at-will employees. The bill delineates the duties of the
two executive directors and sets eligibility requirements for
employees.
The Attorney General would be required to designate
a member of the Attorney General's staff to counsel, advise,
and represent the bingo commission. The gaming commission and
the bingo commission would file annual reports, detailing commission
activities, to the presiding officer of each house of the Legislature,
the Governor, and the Legislative Budget Board.
Methodolgy
The Comptroller of Public Accounts estimates the bill would
have no direct fiscal impact on the state. Potentially the
gaming commission could require additional support staff for
its initial start-up phase. However, for this estimate, no
new support staff costs are assumed for implementing provisions
of the bill. Also, it is assumed that compensation for the
new executive directors and bingo commissioner, would be set
at amounts comparable to other agencies of similar staffing
and budget size.
For purposes of this fiscal note, it is
assumed that the new gaming commission structure would function
similarly to that of the Finance Commission and its component
regulatory agencies. No new staff costs have been included and
it is assumed that many of the support functions could be conducted
by the existing personnel currently supporting the individual
regulatory functions. Any consolidation of the current regulatory
services or functions by the gaming commission executive director,
as authorized by the bill, could result in an actual reduction
of FTE's.
It is estimated the initial cost of consolidating
the commissions' automated support systems, ranging from $2.5
to $6.5 million, would be the greatest potential cost factor
of the bill. Costs associated with the systems consolidation
would include costs for conversion and training to ensure the
various systems would maintain individual operating integrity
and would be made compatible with the other systems.
Administrative
activities, licensing functions and personnel transfers or allocations
under the new structure would require a corresponding transfer
in appropriations, which is not directed by the bill, but which
could be implemented by a memorandum of understanding as authorized
in the bill, or interagency contract(s).
Under this estimate,
the costs that would be incurred for the new gaming commission
include, the executive director (Exempt Group 3, up to $92,070
plus $5,000 support costs), and some travel expenses. Since
the new agencies would be home based in Austin, travel costs
related to meetings could be minimized if meetings of the gaming
commission were timed to coincide with the meetings of the member
commissions. Costs would be expected for the new bingo commissioner's
salary (Exempt Group 4, up to $109,080), the executive director's
salary (Exempt Group 2, up to $77,760) and related support costs
for those positions ($5,000 each).
The gaming commission
and the bingo commission are authorized to rent space in Austin
and establish other branches as needed. However, this estimate
assumes there is adequate space currently available in the existing
operations of the Lottery Commission and Racing Commission to
house the small number of staff required under the new organizational
structure, and no immediate new space would be required.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Change in Number
Savings/(Cost) of State
from General Employees from
Revenue Fund FY 1997
0001
1998 ($4,864,223) 3.0
1998 (349,223) 3.0
2000 (349,223) 3.0
2001 (349,223) 3.0
2002 (349,223) 3.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($4,864,223)
1999 (349,223)
2000 (349,223)
2001 (349,223)
2002 (349,223)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 476 Racing Commission
LBB Staff: JK ,TH ,PH