LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 23, 2001
TO: Honorable James E. "Pete" Laney, Speaker of the House,
House of Representatives
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB877 by Flores (Relating to the benefits provided to
the surviving spouse and minor children of certain public
employees killed in the line of duty.), As Passed 2nd
House
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB877, As Passed 2nd House: negative impact of $(2,917,286) *
* through the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(1,529,047) *
* 2003 (1,388,239) *
* 2004 (1,405,631) *
* 2005 (1,564,823) *
* 2006 (1,432,215) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year General Revenue Fund Compensation to Victims of *
* 0001 Crime Account/ GR-Dedicated *
* 0469 *
* 2002 $(1,529,047) $(1,013,898) *
* 2003 (1,388,239) (920,026) *
* 2004 (1,405,631) (926,154) *
* 2005 (1,564,823) (1,032,282) *
* 2006 (1,432,215) (938,410) *
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Fiscal Analysis
The bill would modify the provisions in the Government Code relating to
benefits paid to survivors of law enforcement officers, fire fighters,
and other public safety workers killed in the line of duty. The bill
would increase the lump sum death benefit paid to a surviving spouse from
$50,000 to $250,000. If there is no surviving spouse, the $250,000
benefit is divided equally among all surviving children regardless of
age. If there are no surviving spouses or children, a $250,000 benefit
is paid to the surviving parent(s). The bill eliminates monthly benefits
for surviving minor children and benefits for surviving dependent
siblings.
The bill would exempt a surviving spouse or minor child who enrolls in an
institution of higher education from tuition and fees at that
institution, and from the cost of housing and food at that institution.
It would also pay to the student the cost of the student's books.
The bill would provide for a monthly payment to the surviving spouse of a
peace officer of the state or a political subdivision, or the spouse of
an employee of the institutional or state jail division of the Texas
Department of Criminal Justice, who was killed in the line of duty and
who had not qualified for an annuity under an employees' retirement plan.
The bill would also provide payment for funeral expenses of the deceased
officer or employee to the surviving spouse or, if a surviving spouse
does not exist, to the surviving minor children.
The bill would apply to deaths that occurs on or after September 1, 2000.
The Employees Retirement System (ERS) would be responsible for
administering the benefits.
Methodology
The estimated increased cost to the state for the lump sum payments to a
surviving spouse is $2,000,000 per year, based on the 1994-2000 average
of 10 deaths a year involving a payment to a spouse. ERS projects that
there will also be one $250,000 payment each year to surviving children
when there is no eligible surviving spouse, and one $250,000 payment to
surviving parents every three years where there is no surviving spouse or
children, based on past experience. There will be estimated savings of
$18,702 in fiscal year 2002, increasing to $93,510 in fiscal year 2006,
due to the elimination of the monthly benefits paid to surviving
children.
The cost for providing the proposed annuity benefits is estimated to be
$19,845 in fiscal year 2002, increasing to $155,925 in fiscal year 2006
as the number of survivors receiving benefits increases each year. ERS
estimates that an average of six deaths would occur each year that would
result in benefit payments under this legislation, and that the annual
cost for providing a full year of annuity benefits would be $5,670 per
survivor, and that the deaths would be evenly spaced throughout the year.
The average cost per funeral is estimated to be $5,600, based on
information from the Funeral Services Commission, resulting in an annual
cost for funeral expenses of $33,600.
Based on information on the ages of children receiving benefits under the
program, it is estimated that in the first year of the bill, 1 dependent
child will receive free tuition, fees, books, and room and board at a
public university. One additional child will be eligible every other
year, with 3 children eligible by fiscal year 2006. According to the
Higher Education Coordinating Board, the average cost per student for
these expenses is $8,200 per year at a public university. The resulting
cost to the institutions is estimated at $8,200 in fiscal year 2002,
increasing to $24,600 in fiscal year 2006. The bill specifies that these
costs will be paid from General Revenue appropriated to the
institutions.
The total additional cost of the increased benefits is estimated to be
$2,542,945 in fiscal year 2002, $2,308,265 in fiscal year 2003,
$2,331,785 in fiscal year 2004, $2,597,105 in fiscal year 2005, and
$2,370,625 in fiscal year 2006. The existing survivor benefit program
is currently funded with General Revenue, but benefits other than
education benefits for a death that is attributed to criminally
injurious conduct could potentially be funded using the Compensation to
Victims of Crime Fund. According to ERS estimates based on previous
claims, 40% of the deaths would be attributed to criminally injurious
conduct. Therefore, for this estimate, the method of financing reflects
both General Revenue and the Compensation to Victims of Crime Fund.
Local Government Impact
According to the Higher Education Coordinating Board, the average student
cost for tuition, fees, books and room and board at a community college
is $5,728 per year. Each year an additional one or two children will be
eligible to receive the increased benefits and may choose to attend a
community college.
Source Agencies: 327 Employees Retirement System, 781 Texas Higher
Education Coordinating Board
LBB Staff: JK, RB, SC