82(R) HB 3665 - House Committee Report version

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012	$6,093,285
2013	$3,594,285
2014	$3,544,285
2015	$3,594,285
2016	$3,544,285

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Probable Revenue Gain/(Loss) from General Revenue Fund 1	Probable Revenue Gain/(Loss) from Tx Preservation Trust Acc 664	Probable Revenue Gain/(Loss) from Telecommunications Revolving - IAC 8125
2012	$10,594	$6,082,691	$10,089,461	($2,550,000)
2013	($63,406)	$3,657,691	$0	$0
2014	$11,594	$3,532,691	$0	$0
2015	($63,406)	$3,657,691	$0	$0
2016	$11,594	$3,532,691	$0	$0

Fiscal Year	Change in Number of State Employees from FY 2011
2012	1.0
2013	1.0
2014	1.0
2015	1.0
2016	1.0

Article 1 of the bill would authorize state agencies to reduce or recover expenditures by taking action to consolidate reports, extend license, permit or registration periods, enter into contracts to carry out an agency's duties, adopt additional eligibility requirements for benefits, provide for electronic communication, and adopt and collect fees or charges to recover costs incurred by an agency.

Article 2 of the bill would implement recommendations from the report "Optimize the Use of State Parking Facilities" in the Legislative Budget Board's Government Effectiveness and Efficiency Report, submitted to the Eighty-second Texas Legislature, 2011. The bill would expand the Texas Facilities Commission (TFC)’s authority related to the operations of state-owned parking lots and garages by authorizing TFC to lease excess parking spaces, those not used by state employees, to public motorists. The bill would also authorize TFC to lease an entire parking facility, or a significant part of a facility, to an institution of higher education or local government. The bill would direct revenue received from leasing operations to be deposited to the General Revenue Fund. The bill would require TFC to report biennially on the use and effectiveness of leased parking operations. Article 2 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.

Article 3 of the bill would implement two recommendations from the report "Implement Strategies to Increase the Transparency of the State Constitutional Debt Limit" in the Legislative Budget Board's Government Effectiveness and Efficiency Report, submitted to the Eighty-second Texas Legislature, 2011. The bill would permit the Bond Review Board (BRB) to use common or standard debt issuance practices to make changes to the assumptions used for estimating debt service amounts for any unissued debt included in the constitutional debt limit (CDL) calculation. This could include changes to assumptions for interest rates, debt maturity, and debt service payment structures. The impact to the debt limit would depend upon what, if any, changes the BRB makes to the current assumptions it uses for unissued debt. The bill would also require the BRB to publish an explanation of how the CDL is calculated, including debt service amounts for issued and unissued debt and the assumptions regarding unissued debt. Article 3 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.

Article 4 of the bill would implement recommendations in the report, "Eliminate Paper Warrants by Using Direct Deposit or E-Pay Card," in the Legislative Budget Board's Government Effectiveness and Efficiency Report submitted to the Eighty-Second Texas Legislature, 2011. The bill would amend the Government Code to allow state employees and annuitants to choose either direct deposit or an electronic pay card to receive payment of state funds. This provision would eliminate the paper warrant option currently available to state employees and annuitants, unless a warrant process is determined to be less costly by the Comptroller of Public Accounts. Article 4 provisions would take effect January 1, 2012.

Article 5 of the bill would eliminate the publication and distribution of bound copies of the General and Special Laws of Texas (referred to as session law) by the Secretary of State following each session of the legislature, replacing such publications with the same information provided electronically on the agency’s website. This change would not apply to a contract for the publication of laws entered into prior to the effective date of the bill. Article 5 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.

Article 6 of the bill would authorize three specific fees for the Office of Attorney General (OAG): a reasonable fee for documents filed electronically with the agency; an administrative fee to review state agency invoices relating to the use of outside legal services; and a reasonable fee for review of the legal sufficiency of proposed comprehensive development agreements for toll projects in accordance with Texas Transportation Code Section 371.051. Article 6 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.

Article 7 of the bill would authorize money in the Preservation Trust Fund to be used on the operating expenses of the Texas Historical Commission (THC). The bill would eliminate references to distributions made to the account and repeal provisions authorizing the Comptroller of Public Accounts to manage the assets of the account under certain requirements and rules for investment and distribution of funds. The bill would require the Comptroller and THC to enter into a memorandum of understanding to facilitate the conversion of assets of the fund into cash for deposit into the state treasury using a method that provides for the lowest amount of revenue loss. Article 7 provisions would take effect November 1, 2011.

Article 8 of the bill would clarify the appropriate expenditure of revenue derived from the collection of fees imposed by the Department of Information Resources (DIR), including developing statewide information resources technology policies and planning and providing shared information resources technology services and network security services. The bill would require DIR to set a fee to cover the direct and indirect costs of providing these services. The bill would also direct the Comptroller of Public Accounts to transfer excess funds from the telecommunications revolving fund, as certified by the Department of Information Resources, to the credit of the General Revenue Fund. Article 8 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.

Article 9 would allow for increases to lobbyist registration fees up to amounts set by the General Appropriations Act.

The provisions of the bill would take effect September 1, 2011, unless otherwise noted.

The extent to which an agency would use the authority granted in Article 1 of the bill is unknown. Therefore, the impact of these changes is not included in the estimates shown above.

The LBB estimates that implementing the provisions contained in Article 2 of the bill would result in General Revenue gains of $887,471 per year. This estimate is based on leasing 40 percent of the estimated currently available excess parking spaces in the Capitol Complex to individual motorists at a rate of $50 per month and executing a revenue sharing long-term lease with the University of Texas for the use of state garages B and G. Because the exact implementation conditions (number of parking spaces to be leased and the contract least rate to be applied) are unknown, the Comptroller of Public Accounts was unable to provide a certifiable revenue estimate. Changes in the implementation of the program from the assumptions made above will alter projected revenue. For example, if demand is sufficient to support charging a higher monthly lease rate, additional revenues would be generated. The implementation of a program to lease specific parking spaces to individuals would require TFC to hire an additional employee due to the quantity of leases involved. TFC reports an additional employee and related expenses would carry a biennial cost of $127,812, including benefits. TFC could manage the lease of entire parking facilities within existing resources due to the limited number of opportunities for such a program.

This analysis assumes any additional costs related to the provisions of the bill contained in Article 3 could be absorbed within existing agency resources.

The extent to which the provisions contained in Article 4 of the bill would reduce CPA administrative costs cannot be determined until full implementation is achieved in fiscal year 2013. This analysis assumes that any administrative costs incurred from transitioning to electronic pay cards would be offset from savings that would be generated from requiring fewer resources to process paper warrants. Additionally, state agencies would also be expected to see savings as evidenced by other agencies that currently disburse benefits and payments via electronic pay card.

The Secretary of State estimates that implementing the provisions contained in Article 5 of the bill would result in General Revenue savings of $75,000 in each even-numbered year. These savings are assumed in CSHB 1.

The OAG estimates that the bill's Article 6 provisions will result in increased General Revenue fee collections of $1,969,220 per year. This revenue is assumed in CSHB 1.

This analysis assumes the bill’s provisions contained in Article 7 would result in a one-time gain to General Revenue-Dedicated funds of $10,089,461 in fiscal year 2012 from transfer of the agency’s investments managed by the Comptroller through the Safekeeping Trust Company. The value of related Safekeeping Trust assets, as of February 28, 2011, was $10,604,461, offset by anticipated regular distributions of $212,000 into the Preservation Trust Fund during the remainder of fiscal year 2011 and a projected loss of $303,000 from the transition of the investments to cash in preparation for transfer into the Preservation Trust Fund. This analysis assumes no further changes would be made with regard to the fund’s fair market value. This revenue gain is assumed in CSHB 1.

The provisions contained in Article 8 of the bill would transfer existing fund balances from the Department of Information Resources’ (DIR) telecommunications revolving fund to the General Revenue Fund. The estimated unexpended balance in the revolving fund for the fiscal year ending August 31, 2011 is $2,550,000. CSHB 1 appropriates the estimated fund balance to DIR.

The Texas Ethics Commission estimates that if lobbyist fees were increased to the maximum amount allowed by Article 9 provisions, the state would realize revenue gains of up to $1,477,000 in General Revenue during the 2012-13 biennium.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION


April 25, 2011

TO:	Honorable Jim Pitts, Chair, House Committee on Appropriations

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

IN RE:	HB3665 by Otto (relating to state fiscal matters related to general government.), Committee Report 1st House, Substituted