LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 8, 1999 TO: Honorable Florence Shapiro, Chair, Senate Committee on State Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB1438 by Duncan (Relating to a pilot project transferring certain professional and occupational licensing boards to self-directed semi-independent status; making an appropriation.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1438, As Introduced: negative impact of $(3,094,928) through * * the biennium ending August 31, 2001. * ************************************************************************** Appropriations: ***************************************************** * Fiscal Year Appropriation out of General * * Revenue Fund * * 0001 * * 2000 $6,142,917 * * 2001 0 * ***************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(1,552,773) * * 2001 (1,542,155) * * 2002 (1,569,155) * * 2003 (1,601,155) * * 2004 (1,617,155) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Revenue Savings/ Savings/ Revenue Number of * * Gain/(Loss) (Cost) from (Cost) from Gain/(Loss) State * * from General Other Funds from Other Employees * * General Revenue Funds from FY 1999 * * Revenue Fund * * Fund 0001 * * 0001 * * 2000 $6,727,227 $56,363 $0 (89.0) * * $(8,280,000) * * 2001 (8,352,000) 6,809,845 (117,427) 174,300 (89.0) * * 2002 (8,379,000) 6,809,845 (117,427) 174,300 (89.0) * * 2003 (8,411,000) 6,809,845 (117,427) 174,300 (89.0) * * 2004 (8,427,000) 6,809,845 (117,427) 174,300 (89.0) * *********************************************************************** ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * Scholarship Fund 5th Year Account * * Students Account/ GR-Dedicated * * 0106 * * 2000 $(578,000) * * 2001 (596,000) * * 2002 (596,000) * * 2003 (596,000) * * 2004 (596,000) * ***************************************************** Fiscal Analysis The bill would establish the Self-Directed Semi-Independent Agency Pilot Project and designate the State Board of Public Accountancy, the Board of Professional Engineers, the Board of Architectural Examiners, the Board of Tax Professional Examiners and the Board of Professional Land Surveying as part of the pilot project. The bill would remove the project agencies from the legislative budgeting process, allow the agencies to retain fees (except the $200 professional fee) in accounts outside the State Treasury and generally operate outside the provisions of the General Appropriations Act. On the first day of each regular legislative session, each agency would be required to submit a report to the Legislature and the Governor describing all of the agency's activities in the previous biennium. The bill would authorize each project agency to contract, sell and acquire property, borrow money and set their own fees with in the restrictions of its enabling legislation. Employees of the project agencies would remain members of the Employees Retirement System of Texas under Chapter 812 of the Government Code. The bill would require the State Auditor to contract with each agency to conduct financial and performance audits. The bill would also transfer all supplies, materials, records, equipment, and facilities used by each project agency to the respective agency in fee simple and allow the General Services Commission to charge agencies remaining in state owned buildings rent. The bill would take effect September 1, 1999. Provisions relating to the Sunset Act would apply and, unless continued, the Act would expire September 1, 2005. Methodology The revenue loss was estimated based on the Comptroller's 2000-01 Biennial Revenue Estimate. Because fees would be deposited outside the State Treasury, there would be a loss to the General Revenue Fund and to GR Account 106-Scholarship Fund for Fifth Year Accounting Students. The general revenue and other funds savings were estimated based on the historical legislative appropriations to the project agencies and employee benefit cost for the associated employees. It is assumed that the employees will remain members of the Employees Retirement System for retirement benefits only and that the project agencies will provide the employer contribution to the system. The State Auditor estimates the cost of audit work required by the bill would be approximately $35,000 per year per agency and require an additional 2 FTE's. It is assumed the agencies would pay for the audit services out of fees collected. The State Property Accounting Division of the Comptroller's Office, estimates the value of the assets that would be transferred to the project agencies at $1,367,723. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, SD, RT