LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 27, 2001
TO: Honorable Elliott Naishtat, Chair, House Committee on
Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1161 by Eiland (Relating to the administration of the
Business Enterprises Program trust fund.), As Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1161, As Introduced: positive impact of $0 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. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year Business Enterprise Program / Business Enterprise Progam / GR *
* GR Dedicated Dedicated *
* 5043 5043 *
* 2002 $(7,605) $8,000 *
* 2003 (7,701) 8,000 *
* 2004 (7,797) 8,000 *
* 2005 (7,893) 8,000 *
* 2006 (7,989) 8,000 *
***************************************************************************
Fiscal Analysis
The bill would permit the Blind Commission to use professional management
services to administer the Business Enterprises Program Trust Fund to
maintain retirement or pension plans, health insurance, paid sick leave,
and vacation time for active and retired blind vendors in conformance
with the federal Randolph Shepard Act. In Texas, retirement and vacation
are currently the only elected benefits.
The costs of professional management services is expected to be offset by
eliminating annual expenditures for actuarial services.
Methodology
It is assumed that the number of actively employed managers will remain
constant at 2001 levels and that the number of retirees receiving
distributions will increase 5% each year from 2002 to 2007.
Management fees are estimated based on an average of the costs reported
by five representative companies providing 401k management services for a
small target market.
Management cost structure is assumed to be comprised of: a one time
startup fee of $920, an annual plan base fee of $1,360, an annual per
life (participant-active and retired) charge of $32, and an annual
distribution charge of $33 per retiree.
The FY2000 agency annual cost for retiree actuary expenses is $8,000.
Annual savings of $8,000 for actuarial services is assumed because the
service would be provided by the selected management firm, upon adoption
of the bill, as part of the stated management fee structure.
The Blind Commission estimates $2,500 (125 hours at $20 per hour) as
annual recurring costs for accounting, and administration of benefits and
pay equalization. It is assumed that enactment of the bill would reduce
the amount of staff time devoted to those activities, but not reduce
FTEs.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 318 Texas
Commission for the Blind, 327 Employees Retirement
System
LBB Staff: JK, HD, KF, GM