LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
 
May 12, 2011

TO:
Honorable Jim Pitts, Chair, House Committee on Appropriations
 
FROM:
John S O'Brien, Director, Legislative Budget Board
 
IN RE:
SB1579 by Ogden (Relating to state fiscal matters related to general government.), As Engrossed



Estimated Two-year Net Impact to General Revenue Related Funds for SB1579, As Engrossed: a positive impact of $38,222,614 through the biennium ending August 31, 2013.

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



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012 $20,284,557
2013 $17,938,057
2014 $18,168,557
2015 $18,377,057
2016 $18,613,557




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
Tobacco Education/Enforce
5044
2012 $225,866 $20,058,691 $10,089,461 $20,121,694
2013 $151,866 $17,786,191 $0 $29,746,087
2014 $226,866 $17,941,691 $0 $0
2015 $151,866 $18,225,191 $0 $0
2016 $226,866 $18,386,691 $0 $0

Fiscal Year Probable Revenue Gain/(Loss) from
Children & Public Health
5045
Probable Revenue Gain/(Loss) from
Ems & Trauma Care Account
5046
Probable Revenue Gain/(Loss) from
DIR Clearing Fund Account - AR
8122
Probable Revenue Gain/(Loss) from
Telecommunications Revolving - AR
8123
2012 $10,060,847 $10,060,847 $272,351 $226,863
2013 $14,873,044 $14,873,044 $256,572 $221,938
2014 $0 $0 $0 $0
2015 $0 $0 $0 $0
2016 $0 $0 $0 $0

Fiscal Year Probable Revenue Gain/(Loss) from
DIR Clearing Fund Account - IAC
8124
Probable Revenue Gain/(Loss) from
Telecommunications Revolving - IAC
8125
Probable Revenue Gain/(Loss) from
Statewide Technology Account - IAC
8126
Probable Revenue Gain/(Loss) from
Employees Health Insurance and Benefits Trust (0973)
2012 $116,722 ($999,881) $365,729 $24,024,457
2013 $109,960 $1,506,890 $344,541 $24,024,457
2014 $0 $0 $0 $24,024,457
2015 $0 $0 $0 $24,024,457
2016 $0 $0 $0 $24,024,457

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

Fiscal Analysis

Article 1 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 1 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.
 
Article 2 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 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 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 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 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 4 provisions would take effect November 1, 2011.
 
Article 5 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 providing shared information resources technology services and network security services. The bill would also direct the Comptroller of Public Accounts to transfer excess funds from the telecommunications revolving fund, as certified by DIR, to the credit of the General Revenue Fund. 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 would require the Comptroller of Public Accounts (CPA) to deduct a 10 percent handling fee from each approved unclaimed property transaction of $100 or more, not to exceed $1,000. Revenue from the handling fee would be deposited to the credit of General Revenue, and the CPA would be authorized to use the proceeds to pay unclaimed property claims processing costs, subject to legislative appropriations.
 
Article 7 would direct the State Bar to credit an attorney with meeting the minimum continuing legal education requirements while employed full-time with the Office of the Attorney General, with the exception of requirements for ethics and professional responsibility courses. The bill requires the OAG to provide OAG attorneys with continuing legal requirement opportunities. These provisions would expire January 1, 2014.

Article 8 would increase lobbyist registration fees by 50 percent.
 
Article 9 of the bill would implement a recommendation from the report "Implement a Tobacco User Surcharge on Employees Retirement System Health Premiums" in the Legislative Budget Board's Government Effectiveness and Efficiency Report, submitted to the Eighty-second Texas Legislature, 2011. Article 9 would amend the Insurance Code to require the Employees Retirement System (ERS) to apply a monthly tobacco user premium differential to each participant covered under the state health plan that uses tobacco. The amount of the monthly tobacco user premium differential could be set in the General Appropriations Act (GAA). If the premium differential is not set in the GAA, the bill would give the ERS Board the authority to set the monthly user premium differential. The bill would require that the premium differential be implemented no later than January 1, 2012.
 
Article 10 makes changes to statutes governing the state's regional poison control centers. The bill allows the Commission on State Emergency Communications to standardize operations at the various centers and requires reports related to the implementation of management controls.
 
Article 11 would expand the use of three tobacco settlement funds, both earnings and corpus, to pay the principal or interest on a bond issued on behalf of the Cancer Prevention and Research Institute of Texas, including: the Permanent Fund for Health and Tobacco Education and Enforcement; the Permanent Fund for Children and Public Health; and the Permanent Fund for Emergency medical Services and Trauma Care. Article 11 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.
 
Article 12 would expand the allowable use of the Texas Enterprise Fund to include grant awards under the Texas homeless housing and services program, administered by the Texas Department of Housing and Community Affairs, and appropriations related to the Jobs and Education for Texans program, administered by the Comptroller of Public Accounts. The bill would also set reporting requirements for such uses. Article 12 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.
 
Article 13 would allow the Cancer Prevention and Research Institute of Texas (CPRIT) to fund multi-year projects after certification by the Texas Public Finance Authority (TPFA) of an amount of obligations sufficient to fund the projects. The bill would amend Health and Safety Code to clarify that appropriations made to the cancer prevention and research fund do not include related bond proceeds and that the fund may be used to pay debt service on related bonds. The bill would amend a requirement for the maintenance of escrow accounts for multi-year projects to an authorization for use of escrow accounts for multi-year projects to distribute money to a project as needed. Article 13 provisions would take immediate effect upon receiving two-thirds vote in both houses; otherwise, the provisions would take effect September, 1, 2011.
 
The provisions of the bill would take effect September 1, 2011, unless otherwise noted.


Methodology

The LBB estimates that implementing the provisions contained in Article 1 of the bill would result in a General Revenue gain 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 would 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.
 
The Secretary of State estimates that implementing the provisions contained in Article 2 of the bill would result in General Revenue savings of $75,000 in each even-numbered year.
 
The Office of the Attorney General (OAG) estimates that the bill's Article 3 provisions will result in increased General Revenue fee collections of $1,969,220 per year.
 
This analysis assumes the bill’s provisions contained in Article 4 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.
 
The provisions contained in Article 5 of the bill would transfer existing fund balances from the Department of Information Resources’ telecommunications revolving fund to the General Revenue Fund and expand the allowable expenditure of fund revenues to appropriate information technology fucntions. The estimated unexpended balance in the revolving fund, to be transfered to General Revenue, for the fiscal year ending August 31, 2011 is $2.6 million. This analysis estimates that the allowable expansion of fee expenditures would result in a $5.0 million gain to the respective technology accounts during the 2012-13 biennium, as shown in the tables above.
 
The Comptroller of Public Accounts estimates the provisions in Article 6 related to handling fees on unclaimed property claims processing would generate $28.8 million during the 2012-13 biennium.
 
The OAG estimates that Article 7 provisions would result in a biennial General Revenue savings of $430,543.

The Texas Ethics Commission estimates that Article 8 provisions would result in a revenue gain of $738,500 in General Revenue during the 2012-13 biennium.
 
The bill’s provisions in Article 9 would help defray the increased costs to the plan associated with tobacco users, reduce the need for appropriations to the health plan, and minimize the need for cost shifting to employees to fund the state health plan. ERS reports a total of 411,942 adults enrolled in the state health plan, as of February 2011. According to the Centers for Disease Control and Prevention, an estimated 18 percent of adult Texans smoke, resulting in an estimated 74,150 tobacco users in the ERS health plan. This analysis assumes that 90 percent of smokers (66,735 plan members) would pay the tobacco user premium differential, resulting in gross revenue of $24.0 million in All Funds per fiscal year, which would be deposited to the Employees Life, Accident, Health Insurance and Benefits Trust Account.
 
Article 10 would have no significant fiscal impact.

The provisions included in Article 11 related to expanding the use of three tobacco settlement funds to pay the principal or interest on a bond issued on behalf of the Cancer Prevention and Research Institute of Texas would result in a gain to General Revenue-Dedicated Funds of $40.2 million in fiscal year 2012 and $59.5 million in fiscal year 2013. The gain shown in the tables above is based on assumed appropriations for the 2012-13 biennium.

Article 12 related to grants for the Texas homeless housing and services program and the Jobs and Education for Texans program from the Texas Enterprise Fund do not specify a required funding level and would have no fiscal impact. The addition of these two programs could reduce the level of resources available to existing uses of the Texas Enterprise Fund.
 
Article 13 would have no significant fiscal impact. The state could realize savings to the extent that bond funds are not placed in escrow accounts by the Cancer Prevention and Research Institute of Texas, which would allow bonds to be issued as needed instead of in a lump sum.


Local Government Impact

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


Source Agencies:
477 Commission on State Emergency Communications, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 307 Secretary of State, 327 Employees Retirement System, 332 Department of Housing and Community Affairs, 347 Public Finance Authority, 356 Texas Ethics Commission, 537 State Health Services, Department of, 542 Cancer Prevention and Research Institute of Texas, 808 Historical Commission
LBB Staff:
JOB, KY, KK, JI, SD