LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 11, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3452 by Gallego (Relating to the continuation and
functions of the Texas Department of Economic Development
and the operation, funding, and administration of
economic development programs.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3452, As Engrossed: positive impact of $34,600 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 $17,300 *
* 2003 17,300 *
* 2004 17,300 *
* 2005 17,300 *
* 2006 17,300 *
****************************************************
All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year Savings/ Revenue Savings/ Savings/ Number of *
* (Cost) from Gain/(Loss) (Cost) from (Cost) from State *
* Smart Jobs from New New General General Employees *
* Fund General Revenue Revenue from FY 2001 *
* 0891 Revenue Dedicated- Fund *
* Dedicated- Smart Jobs 0001 *
* Smart Jobs *
* 2002 $100,286,987 $17,300 (11.0) *
* $(100,286, $(100,286, *
* 987) 987) *
* 2003 0 0 0 17,300 (22.0) *
* 2004 0 0 0 17,300 (22.0) *
* 2005 0 0 0 17,300 (22.0) *
* 2006 0 0 0 17,300 (22.0) *
***********************************************************************
Fiscal Analysis
The bill would add a provision that reduces the Texas Department of
Economic Development (TDED) board from nine to five members and would
require the Governor to appoint five new members as soon as possible
after the effective date of the bill. Reducing the board will result in
an administrative savings of approximately $17,300 each fiscal year.
The bill would transfer all unspent and unobligated funds related to
Smart Jobs, estimated to be $81,256,806, to the New General Revenue
Dedicated Account on September 1, 2001. It is assumed that half of the
encumbered amounts for contracts (estimated to be $19,030,181) were to be
paid back to TDED and transferred to the New General Revenue Dedicated
Account for a total of $100,286,987 in fiscal year 2002.
It is assumed that 11 of the 22 FTEs would be continued in fiscal year
2002 to administer the close out of contracts. It is also assumed that
in fiscal year 2003 the remaining FTEs would be eliminated.
The bill would take effect September 1, 2001.
Methodology
The bill would transfer all unobligated funds related to Smart Jobs,
estimated to be $81,256,806, to the New General Revenue Dedicated Account
on September 1, 2001. After TDED has performed all of its duties for
smart jobs contracts entered into before September 1, 2001, all of the
remaining money in the smart jobs fund, smart jobs holding fund, and
money set aside for administration of the program ($750,000) would
transfer to the New General Revenue Dedicated Account. Upon completion
of duties for all smart jobs contracts entered into before September 1,
2001, the number of FTEs dedicated to administering the Smart Jobs
Program would no longer be needed.
The bill authorizes the Texas Workforce Commission to request an
emergency transfer of money from the General Revenue Dedicated Account
Smart Jobs Fund if money in the unemployment insurance holding fund is
insufficient to prevent the unemployment insurance trust fund from
incurring a deficit tax. The Workforce Commission must receive approval
from the Legislative Budget Board and the Governor.
The bill would leave an estimated $38,810,362 in funds related to
outstanding contracts that are anticipated to be closed out in fiscal
year 2002. Included in that amount is $750,000 in funding for
administration (11 FTEs) for the purpose of closing out the contracts.
It is also assumed that no funding would be available in 2003 for
administration and any funds received as a result of the close out of
contracts would also be transferred to the New General Revenue Dedicated
Account.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies:
LBB Staff: JK, JO, ER