83(R) HB 12 - Engrossed version

TO:	Honorable Judith Zaffirini, Chair, Senate Committee on Government Organization

FROM:	Ursula Parks, Director, Legislative Budget Board

IN RE:	HB12 by Flynn (Relating to gifts and other consideration made to state agencies for state employee salary supplement or other purposes, and to publication by state agencies of staff compensation and related information.), As Engrossed

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2014	($198,000)
2015	($90,000)
2016	($90,000)
2017	($90,000)
2018	($90,000)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Change in Number of State Employees from FY 2013
2014	($198,000)	1.4
2015	($90,000)	0.6
2016	($90,000)	0.6
2017	($90,000)	0.6
2018	($90,000)	0.6

The bill would amend the Government Code to prohibit a state agency from accepting a gift to supplement an employee's salary unless certain criteria are met. The bill would require a state agency to post information on online regarding the amount of supplement donated and the methodology, including market analysis, to determine amount of supplement donated. The bill would require agencies to adopt rules relating to conflict of interest provisions on accepting gifts for salary supplements and post those rules on agency websites.

The bill would require state agencies to report to the State Auditor information on whether a donor is an individual or entity; what type of entity, including nonprofit status and classification by the Internal Revenue Service. The bill would require the State Auditor's Office to develop a schedule and form for the required information posting and to compile a report to the Legislature on gift and donor information submitted by agencies. The bill would require agencies to post on agency websites information relating to staffing and salaries, including the number of employees employed by the agency, appropriations, compensation methodology for executive staff, and the average compensation of non-executive staff. The bill takes effect immediately if it receives a vote of two-thirds of all the members elected to each house. Otherwise, it takes effect September 1, 2013.

The State Auditor's Office (SAO) estimated the total cost to comply with the provisions of the bill would be $198,000 in General Revenue in fiscal year 2014 and $90,000 in General Revenue in subsequent fiscal years. The SAO indicates that receiving and reporting information relating to agency salary supplement gifts and related donor information would require the development of a new automated system. The agency indicates that the system would need to have the capability to be queried and to send reminder emails to entities who have not submitted the required information and to produce reports. SAO estimates that initial development of reporting guidelines and the development of the new system would require 1,200 hours to complete. Based on the agency's current billing rate of $90 per hour, this would total $108,000 for fiscal year 2014. Additionally, SAO estimates it would take 1,000 hours per year, beginning in fiscal year 2014, to assist agencies in reporting the required information, to maintain the automated reporting system, and to compile and produce a report on an annual basis, with an estimated cost of $90,000 per year, beginning in fiscal year 2014. These costs include the addition of 1.4 auditor positions and salary costs of $127,600 in fiscal year 2014 and $58,000 and 0.6 FTEs in subsequent fiscal years.

A sample of agencies including the Office of the Attorney General, the Cancer Prevention and Research Institute, the Comptroller of Public Accounts, the Health and Human Services Commission, the Railroad Commission, the Department of Agriculture, the Texas Department of Insurance, and the Texas Workforce Commission anticipate any additional work resulting from the passage of the bill could be reasonably absorbed within current resources.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION


May 16, 2013