LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 20, 2001
TO: Honorable Kim Brimer, Chair, House Committee on Business
& Industry
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1203 by Brimer (Relating to the purchase of certain
insurance coverage by state agencies.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1203, As Introduced: positive impact of $2,200,000 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 $1,100,000 *
* 2003 1,100,000 *
* 2004 1,100,000 *
* 2005 1,100,000 *
* 2006 1,100,000 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Change in Number of *
* Year Savings/(Cost) from Savings/(Cost) from State Employees from *
* General Revenue Fund Interagency FY 2001 *
* 0001 Contracts *
* 0777 *
* 2002 $1,100,000 $(735,000) 12.0 *
* 2003 1,100,000 (610,000) 12.0 *
* 2004 1,100,000 (610,000) 12.0 *
* 2005 1,100,000 (610,000) 12.0 *
* 2006 1,100,000 (610,000) 12.0 *
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Fiscal Analysis
The legislation would expand the State Office of Risk Management's (SORM)
risk management responsibilities to include the Texas Tech University
System, Texas Department of Transportation, the Texas A&M University
System, and the University of Texas System into the risk management
duties of the agency. These institutions are currently exempt from
SORM's risk management duties due to Section 412.052 of the Labor Code,
which HB1203 proposes to repeal. The legislation would also expand
SORM's responsibilities by charging the agency to maintain and review
records of property, casualty, or liability insurance coverage purchased
by or for higher education institutions and state agencies. In acting as
a full-service insurance manager for state agencies, the office would
purchase insurance coverage for state agencies under any line of
insurance other than health or life insurance.
Methodology
SORM estimates it would need an additional FTE to implement the
full-service insurance management responsibility which the legislation
would create and an additional 11 FTEs to implement the additional risk
management responsibilities. The cost of the additional FTEs is estimated
by SORM to be $735,000 in fiscal year 2002 and approximately $610,000
every year thereafter. The FTE projections are based on the current ratio
of SORM risk management personnel to covered FTEs.
Currently, SORM estimates higher education institutions and state
agencies spend approximately $11.1 million a year for insurance
coverage. SORM estimates savings of approximately 10% each year from
centralizing and consolidating the purchase of insurance for an annual
savings of $1.1 million.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Texas Department of Insurance, 479 State
Office of Risk Management, 781 Texas Higher
Education Coordinating Board, 302 Office of the
Attorney General, 768 Texas Tech University
System, 720 The University of Texas System, 601
Texas Department of Transportation, 710 The Texas
A&M University System
LBB Staff: JK, JO, JC