80(R) HB 3889 - Introduced version

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION


March 26, 2007

TO:	Honorable Bill Callegari, Chair, House Committee on Government Reform

FROM:	John S. O'Brien, Director, Legislative Budget Board

IN RE:	HB3889 by Gattis (Relating to the creation of the office of inspector general; providing penalties.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB3889, As Introduced: a negative impact of ($700,288) through the biennium ending August 31, 2009.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

House Bill 3889 would create an independent Office of Inspector General (OIG) by adding Chapter 422, Government Code, titled Office of Inspector General. The OIG would be responsible for the detection, investigation, and prevention of fraud, waste, and abuse in the state’s implementation or administration by a state agency of a state or federally-funded program. The new OIG would be granted rulemaking and subpoena authority and would be authorized to employ and commission peace officers.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008	($366,249)
2009	($334,039)
2010	($334,039)
2011	($334,039)
2012	($334,039)

All Funds, Five-Year Impact:

Fiscal Year	Probable (Cost) from GENERAL REVENUE FUND 1	Change in Number of State Employees from FY 2007
2008	($366,249)	4.3
2009	($334,039)	4.3
2010	($334,039)	4.3
2011	($334,039)	4.3
2012	($334,039)	4.3

The OIG would coordinate with the Office of the Attorney General (OAG) and develop a memorandum of understanding concerning processing of all cases; would jointly prepare and submit a semiannual report, and defense of the OIG would be provided by the attorney general.

The bill would provide that the Inspector General could designate deputy inspectors general for state agencies that implement or administer federal programs.

Any potential revenue impact from expanded enforcement and investigation has not been estimated by the affected state agencies and is not included above.

The fiscal impact results from new Chapter 422.108 requirements related to the following:

The OAG estimates an increase in referrals to its Administrative Law Division, with an increased workload of 200-300 hours per year, which equates to 0.3 full-time equivalents per year.

The OAG estimates an impact on its Criminal Law Enforcement Division, to initiate prosecutions with the consent of local county and district attorneys. This would require an increase of 1.5 full-time equivalents.

Additionally, a fiscal impact results from an anticipated increase in the number of civil rights and employment cases that the Law Enforcement Defense Division at the OAG would need to defend on behalf of the OIG. This is due to the bill's requirement (Chapter 422.101) to investigate fraud in any state or federally-funded program, which could result in a significant number of lawsuits against the OIG, its staff and commissioned officers, as well as other state agencies and employees. This would require 2.5 full-time equivalents per year.

The bill's provisions related to deputy inspectors general (Chapter 422.060, and Sec. 32) would require the transfer from certain agencies to the office of inspector general, all personnel, vacant full-time equivalent positions, and assets engaged in the performance of or support of agency functions relating to the detection, investigation, and prevention of fraud, waste, and abuse. To implement these provisions of the bill, the General Appropriations Act would need to provide for these transfers. Is is assumed that there would be no net increase in expenditures or FTE levels.

The OAG estimates a one-time technology impact of $7,897 in fiscal year 2008 for network stations and software.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.