LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 8, 2001 TO: Honorable Robert Junell, Chair, House Committee on Appropriations FROM: John Keel, Director, Legislative Budget Board IN RE: SB736 by Duncan (Relating to the operation of the self-directed semi-independent agency pilot project; making an appropriation.), Committee Report 2nd House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB736, Committee Report 2nd House, Substituted: positive impact * * of $111,975 through the biennium ending August 31, 2003. * ************************************************************************** Appropriations: ***************************************************** * Fiscal Year Appropriation out of General * * Revenue Fund * * 0001 * * 2002 $3,089,523 * * 2003 0 * ***************************************************** General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(1,452,274) * * 2003 1,564,249 * * 2004 0 * * 2005 0 * * 2006 0 * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Revenue Savings/ Revenue Savings/ Number of * * Gain/(Loss) (Cost) from Gain/(Loss) (Cost) from State * * from General from Other Other Funds Employees * * General Revenue Funds 0997 from FY 2001 * * Revenue Fund 0997 * * Fund 0001 * * 0001 * * 2002 $4,147,964 $1,161,514 $103,073 (85.0) * * $(5,600,238) * * 2003 (5,673,238) 7,237,487 1,266,514 (1,927) (83.0) * * 2004 0 0 0 0 0.0 * * 2005 0 0 0 0 0.0 * * 2006 0 0 0 0 0.0 * *********************************************************************** Fiscal Analysis The bill would amend Section 14, Article 8930, of the Self-Directed Semi-Independent Agency Project Act by directing all fees collected and any funds appropriated to a project agency to be deposited into the Texas Safekeeping Trust Company outside the Treasury. Any appropriations made by the bill are to be repaid to the General Revenue Fund as funds become available. The bill would take effect September 1, 2001. The adoption of this legislation would allow the project agencies to participate in the Self-Directed Semi-Independent Agency project adopted by the 76th Legislature. The Act established the Self-Directed Semi-Independent Agency Pilot Project and designated the State Board of Public Accountancy, the Board of Professional Engineers and the Board of Architectural Examiners as part of the pilot project. The Act removes the project agencies from the legislative budgeting process and generally allows them to operate outside the provisions of the General Appropriations Act. Each of the project agencies are required to annually remit certain amounts to the General Revenue Fund. On the first day of each regular legislative session, each agency is required to submit a report to the Legislature and the Governor describing all of the agency's activities in the previous biennium. In addition, the agency is required to report its two year expenses and revenue collections by November 1 of each year to the Legislature and Governor. Each agency can set their own fees with in the restrictions of its enabling legislation. Employees of the project agencies would remain members of the Employees Retirement System of Texas under Chapter 812 of the Government Code. The Act requires the State Auditor to contract with each agency to conduct financial and performance audits and allows the Attorney General to collect fees from the project agencies for legal services. The Act would also transfer all supplies, materials, records, equipment, and facilities used by each project agency to the respective agency in fee simple as long as the agency was covered by the Act and allow the General Services Commission to charge agencies remaining in state owned buildings rent. Methodology The Comptroller estimates the project agencies would collect fees in sufficient amounts to reimburse the General Revenue Fund for the appropriations made to them in fiscal 2002. The State Auditor estimates the cost of audit work required by the Act would be approximately $35,000 per year per agency and require an additional 2 FTE's. It is assumed the agencies would pay for the audit services out of fees collected. The General Services Commission estimates it would charge the project agencies $18.00 per square foot for debt service and indirect costs. It is assumed the project agencies would contract with the Employees Retirement Service for employee benefits and the General Services Commission for building services. The State Property Accounting Division of the Comptroller's Office and the General Land Office, estimates the value of the assets that would be transferred to the project agencies at $1,859,000. Source Agencies: 459 Texas Board of Architectural Examiners, 116 Sunset Advisory Commission, 460 Texas Board of Professional Engineers, 457 Texas State Board of Public Accountancy, 304 Comptroller of Public Accounts, 302 Office of the Attorney General, 303 General Services Commission, 308 State Auditor's Office LBB Staff: JK, SD, RT