LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 30, 2001
TO: Honorable Jim Solis, Chair, House Committee on Economic
Development
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.), Committee Report 1st
House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3452, Committee Report 1st House, Substituted: 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. *
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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:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* Smart Jobs Fund Unemployment FY 2001 *
* 0891 Compensation *
* Clearance Account *
* 0936 *
* 2002 $(100,286,987) $100,286,987 (11.0) *
* 2003 0 0 (22.0) *
* 2004 0 0 (22.0) *
* 2005 0 0 (22.0) *
* 2006 0 0 (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 Unemployment Compensation
Clearence Account 0936 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 Unemployment Compensation
Clearence Account 0936 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 Unemployment Compensation Clearence
Account 0936 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 Unemployment Insurance Trust Fund. 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 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 Unemployment Compensation
Clearence Account 0936.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 116 Sunset Advisory Commission
LBB Staff: JK, JO, RT, ER