LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 3, 2001 TO: Honorable Jim Solis, Chair, House Committee on Economic Development FROM: John Keel, Director, Legislative Budget Board IN RE: HB3178 by Solis, Jim (Relating to the requirement that certain persons associated with development corporations complete a training seminar on the operation and administration of development corporations; providing an administrative penalty.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3178, 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 Revenue Gain/(Loss) * * Year Appropriated Receipts from Appropriated Receipts * * 0666 0666 * * 2002 $(58,449) $58,449 * * 2003 (54,849) 54,849 * * 2004 (54,849) 54,849 * * 2005 (54,849) 54,849 * * 2006 (54,849) 54,849 * *************************************************************************** Fiscal Analysis The bill would require that certain persons associated with development corporations complete a training seminar on the operation and administration of development corporations and it provides for an administrative penalty. The bill would require the Texas Department of Economic Development (TDED), in conjunction with the Office of the Attorney General and the Comptroller, to develop a training seminar for municipalities or counties that have created corporations under the Development Corporation Act of 1979. The Department will ensure that certain city, county and corporation officials are trained at least once in a 24-month period. The Department would issue a certificate of completion to each person who completes the required training. Initial training certification must be obtained by January 1, 2004. The cost to the Department of Economic Development would be $58,449 in FY 2002 and $54,849 for each fiscal year thereafter for so long as the Act is in effect. Since the corporations may pay for the required training, the Department would charge each participant for the training and fund the expenses with Appropriated Receipts. This bill would take effect September 1, 2001. Methodology TDED estimates that one additional FTE, a Finance Program Specialist (B11), would be required to administer the program. It is assumed fees would cover all costs of the FTE. The roles and responsibilities of the FTE would include development of training materials, workshop coordination with local government officials, and the conducting of certification seminars in each region of the state. Travel expenses in the amount of $3,000 each fiscal year are anticipated. Travel is based on ten workshops being conducted annually. Estimated reimbursement for travel expenses is $300 per trip. Local Government Impact This bill requires members of an economic development corporation, created by local government, to seek training from the Texas Department of Economic Development on at least a bi-annual basis. The local authority is directed to reimburse the state for this training. It is assumed that 450 cities have economic development corporations and that two employees will be attending the training on a bi-annual basis. Training cost per participant was not disclosed; however, the department intends to recoup all of its cost, which would result in $58,000 divided by 450 participants each year. Based on these assumptions, the training costs do not represent a significant impact on units of local government. Source Agencies: 480 Department of Economic Development, 304 Comptroller of Public Accounts, 302 Office of the Attorney General LBB Staff: JK, JO, RT, ER, DW