LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 23, 2001
TO: Honorable Florence Shapiro, Chair, Senate Committee on
State Affairs
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1458 by Duncan (Relating to the duties of state
agencies and political subdivisions with regard to the
development of, access to, and utilization of electronic
information related to government services, programs,
and functions.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1458, As Introduced: positive impact of $202,533,228 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 Net Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $71,302,414 *
* 2003 131,230,814 *
* 2004 162,657,224 *
* 2005 192,041,224 *
* 2006 192,043,724 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Savings/(Cost) Savings/(Cost) Savings/(Cost) *
* Gain/(Loss) from General from from Federal *
* from General Revenue Fund Telecommunicat- Funds - Federal *
* Revenue Fund 0001 ions 0555 *
* 0001 Infrastructure *
* Fund *
* 0345 *
* 2002 $123,256,000 $(51,953,586) $(12,000,000) $0 *
* 2003 175,936,000 (44,705,186) (12,000,000) 0 *
* 2004 175,936,000 (13,278,776) (12,000,000) 0 *
* 2005 175,936,000 16,105,224 (12,000,000) 37,125,000 *
* 2006 175,936,000 16,107,724 (12,000,000) 37,125,000 *
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year All General Revenue Dedicated Employees from FY 2001 *
* Accounts *
* 2002 $0 10.0 *
* 2003 0 10.0 *
* 2004 0 13.0 *
* 2005 42,630,000 13.0 *
* 2006 42,630,000 13.0 *
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Technology Impact
Technology costs for the Department of Information Resources are as
follows:
* FY 2002 $3,627,500 design, implementation, hardware, software,
personal computers,
* FY 2003 $900,000 completion of design and implementation,
* FY 2004 $573,500 hardware and software, personal computers,
* FY 2005 $116,500 software license and support, personal computers,
* FY 2006 $89,000 software license and support.
Technology costs for the Comptroller of Public Accounts (CPA) would total
$2,522,000 for the 2002-03 biennium for 300 wireless modem-type devices,
the audit database, hardware and software costs, conversion costs,
license costs, and outside assistance. This includes annual modem and
system maintenance costs totaling $303,250 would begin in FY 2003, and
two additional scanners would need to be purchased in both FY 2005 and
FY 2006.
Fiscal Analysis
The bill would implement AFM5 from the CPA's E-Texas report. To enhance
the efficiency of audits and enforcement activities, the bill would
require the CPA to acquire and maintain wireless communication equipment,
and develop, implement and maintain an advanced audit database system.
(E-Texas: AFM5)
The bill would also fully or partially implement the following
recommendations from the CPA's E-Texas report: EG1, EG3, EG4, EG5, EG6,
EG8, EG10, CG3, CG4, GP4, HRM2, HHS22, and ENR2.
The bill would require the Department of Information Resources to do the
following:
* Develop and operate a One-stop Online service for new businesses in
the state. (E-Texas: EG3)
* Create an online system for listing state agency employment openings.
(E-Texas: HRM2)
* Perform a comprehensive examination of the state's reporting
requirements and compile a list of recommendations for streamlining
reporting requirements on cities and counties. (E-Texas: GP4)
* Develop functional specifications and make preparations for a
statewide electronic data clearinghouse. (E-Texas: EG5)
* Assess opportunities for allowing people to electronically file
information that agencies require to be reported, and develop and
implement a plan to adopt electronic reporting in certain areas of state
government. (E-Texas: ENR2, HHS22)
* Administer a common electronic occupational licensing system using the
Internet. (E-Texas: EG4)
* Establish an electronic government Program Management Office (PMO) to
guide, promote and facilitate the implementation of selected electronic
government projects. (E-Texas: EG1)
* Create a seat management division to conduct a study and make
recommendations. (E-Texas: CG3)
* Identify opportunities for state agencies to coordinate with each
other on information resources technology projects. (E-Texas: EG8)
The bill would also:
* Make political subdivisions in the state eligible to receive
Telecommunications Infrastructure Fund (TIF) grant funding, when
participating in TIF's Collaborative Community Networking Grant Program.
(E-Texas: EG10)
* Require the PMO to establish the Texas Online grant program enabling
cities, counties and school districts to provide government services
through the Texas Online portal. (E-Texas: EG6)
* Require the PMO to assess the functionality of the electronic
procurement marketplace and electronic commerce network maintained by
the General Services Commission (GSC), and determine whether the systems
should be enhanced, replaced or accessed through the TexasOnline portal.
DIR would implement an electronic procurement system based on the
results of the assessment. (E-Texas: CG4)
Methodology
Regarding the Comptroller's efficiency of audits and enforcement
activities:
* (AFM5) In its estimate regarding efficiency of audits and enforcement
activities, the CPA assumes that it would use the new authority to
contract for audit resources sufficient to allow audit coverage of 1
percent of taxpayers. Administrative costs for the CPA would total
$24,369,000 for the 2002-03 biennium, including technology costs. The CPA
would incur costs of $1,243,000 for each year of the biennium to
contract for a Special Audit Unit, composed of the equivalent of 13
full-time auditors, and $9,392,000 for each year of the biennium for the
equivalent of 100 contract auditors. An additional $288,000 in contract
assistance would be necessary each year of the biennium to support
implementation of the new technology. The projected increase in revenue
collections with full implementation is estimated at $123.3 million for
FY 2002, and $175.9 million in FY 2003 and thereafter. The $24.4 million
cost to implement this program is included in the Senate version of
Senate Bill 1. The Comptroller's office has indicated that it will
increase the 2002-03 revenue estimate by $199.2 million when this program
is implemented.
Regarding all other aspects of the bill:
* (EG3) According to DIR, the cost for One -Stop Service would be
$500,000 for professional services: $150,000 to study the existing
common permitting application and information required by the
licensing/regulation agencies that may require information for someone
starting a new business; and $350,000 for integration into the Texas
Online Portal and development of agency and online web forms.
* (HRM2) DIR estimates that creating an online system for listing state
agency employment openings would have a cost to General Revenue of
$1,000,000 in FY 2002, along with additional costs to hire a consultant
to review existing applications, develop a method of integration, and
integrate the existing state employment opening posting systems and DIR's
web portal.
* (GP4) According to the CPA's E-Texas report and DIR, compiling a list
of ways to streamline and reduce reporting requirements on cities and
counties would require DIR to employ one analyst, at a salary of $68,750,
including benefits, with a budget of $50,000.
* (EG5) The cost of development and implementation of the data
clearinghouse is estimated to be $1,034,000. The total does not include
the cost of staffing the data clearinghouse. In addition to the analyst
added in FY 2002, this estimate assumes that the PMO would employ three
analysts beginning in FY 2004 at the same salary to work with local
governments and state and federal agencies to ensure the effective
transfer of information. From FY 2005 on, software licenses and support
would cost an additional $89,000 per year.
* (ENR2, HHS22) DIR advises that it can perform the assessment
requirements of the electronic reporting with current staffing. Any
costs for implementation of the program would be determined as a part of
the study.
* (EG4) DIR would contract with a private vendor to implement the
common licensing system using the Internet. The contractor will incur all
costs for development, implementation and operational costs for this
project. All contractor costs will be recovered through appropriated
receipts (transaction fees and subscription fees). There are nine
regulatory agencies that do not own their own software and in order to
supply the automated licensing system to those nine agencies, there will
be anticipated costs for analysis, design and programming in the amount
of $18,400 per agency for a total of $165,600.
* (EG1) DIR estimates that the PMO would require $928,210 for
professional services in FY 2002 and $956,410 in FY 2003. After FY 2003,
the funding should come from a percentage of each project budget. In
addition, implementation would require an additional 6 FTEs estimated to
be $500,000, benefits included, annually.
* (CG3) DIR estimates that creating a seat management division would
cost $668,776 in FY 2002.
* (EG8) The Comptroller expects no fiscal impact from requiring DIR to
identify opportunities for state agencies to coordinate information
technology projects with each other
* (EG10) The bill would direct the Texas Infrastructure Fund (TIF) to
establish a goal of awarding political subdivisions funding of not less
than $12 million each year from the Qualifying Entities Account. The
estimated fiscal impact assumes that $12 million would be set aside for
local governments' costs to participate in community networking annually
until the TIF expired.
* (EG6) Putting the activities of existing grant programs online would
cost $1,800,000 over two years. It would also require one FTE at a cost
of approximately $70,000 a year, including benefits, and an additional
$5,000 a year for operating expenses. The FTE cost would increase in FY
2004 and again in FY 2006. There would be an additional $2,500 increase
in FY 2006 for computer upgrade. The CPA estimates that implementation
of the TexasOnline Grant Program would cost $59,000,000 to General
Revenue (GR) for the FY 2002-03 biennium. This funding would enable
approximately 700 cities, counties, and school districts in strategic
investment areas to provide selected government services online.
* (CG4) According to the CPA and DIR, the cost for implementing
electronic procurement would be $5.7 million in GR for the FY 2002-03
biennium. In FY 2002, $1.7 million would be used to purchase critical
hardware and software for the electronic procurement system and $1
million for interfacing financial and accounting systems of the 20
largest state agencies. The estimate assumes a need to contract for
professional services, costing $1.5 million in FY 2002 and FY 2003.
There would also be the need for one project manager at $70,000 per year,
benefits included.
According to the CPA and DIR, electronic procurement implementation
would result in savings by fiscal year 2005, as participation in the
system increased and purchases became more frequent. It is estimated
that savings would accrue at a conservative rate of 2 percent of actual
1999 purchases by all state agencies.
Based on purchases of $1.429 billion, the state would generate GR
savings of $28.58 million per year. Based on purchases of $1.86
billion, $37.13 million per year in federal funds would be saved. Based
on purchases of $2.13 billion, $42.6 million per year in dedicated
accounts funds would be saved.
Local Government Impact
There could be cost savings to local governments who use electronic
procurement. A savings on telecommunications costs would be realized for
those local governments participating in TIF's collaborative community
networking program.
Source Agencies: 592 State Soil & Water Conservation Board, 513
Texas Funeral Service Commission, 533 Executive
Council of Physical Therapy & Occupational Therapy
Examiners, 472 Texas Structural Pest Control
Board, 582 Texas Natural Resource Conservation
Commission, 313 Department of Information
Resources, 466 Office of Consumer Credit
Commissioner, 520 Board of Examiners of
Psychologists, 337 Board of Tax Professional
Examiners, 529 Health and Human Services
Commission, 329 Texas Real Estate Commission, 503
Texas State Board of Medical Examiners, 308 State
Auditor's Office, 329A Texas Appraiser Licensing
and Certification Board, 515 Texas State Board of
Pharmacy, 514 Texas Optometry Board, 502 State
Board of Barber Examiners , 551 Texas Department
of Agriculture, 212 Office of Court
Administration, 578 Texas Board of Veterinary
Medical Examiners, 367 Telecommunications
Infrastructure Fund Board, 554 Texas Animal Health
Commission, 507 Board of Nurse Examiners, 511
Board of Vocational Nurse Examiners, 504 State
Board of Dental Examiners, 580 Texas Water
Development Board, 204 Court Reporters
Certification Board, 474 Texas Polygraph Examiners
Board, 802 Texas Parks and Wildlife Department,
456 Texas State Board of Plumbing Examiners, 304
Comptroller of Public Accounts, 320 Texas
Workforce Commission, 505 Texas Cosmetology
Commission, 781 Texas Higher Education
Coordinating Board, 508 Texas Board of
Chiropractic Examiners, 303 General Services
Commission, 512 Texas State Board of Podiatric
Medical Examiners
LBB Staff: JK, RB, SK