Honorable Angie Chen Button, Chair, House Committee on Economic & Small Business Development
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
SB208 by Campbell (Relating to the continuation and functions of the Texas Workforce Commission.), Committee Report 2nd House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for SB208, Committee Report 2nd House, Substituted: a negative impact of ($6,759,168) through the biennium ending August 31, 2017.
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
2016
$0
2017
($6,759,168)
2018
($6,281,068)
2019
($6,281,068)
2020
($6,281,068)
Fiscal Year
Probable (Cost) from General Revenue Fund 1
Probable Savings from General Revenue Fund 1
Probable Savings from Federal Funds 555
Probable Revenue Gain from Unempl Comp Sp Adm Acct 165
2016
$0
$0
$0
$0
2017
($6,931,368)
$172,200
$2,085,619
$0
2018
($6,931,368)
$650,300
$3,852,119
$510,376
2019
($6,931,368)
$650,300
$3,852,119
$427,055
2020
($6,931,368)
$650,300
$3,852,119
$363,109
Fiscal Year
Probable Revenue Gain from Employment/Trng Investment Assmnt 5128
Probable Revenue Gain from UNEMPLOYMENT TRST FND ACCT 938
Change in Number of State Employees from FY 2015
2016
$0
$0
0.0
2017
$0
$47,742,354
(6.0)
2018
$48,137
$38,542,318
(27.0)
2019
$43,322
$31,959,881
(27.0)
2020
$40,466
$27,699,077
(27.0)
Fiscal Analysis
The bill would amend the Education Code, Government Code, Human Resources Code, Labor Code, and Property Code relating to the continuation and functions of the Texas Workforce Commission (TWC).
The bill would require TWC to include information regarding any formal enforcement action taken by the commission against a career school or college on its current directory of schools.
The bill would allow TWC to receive criminal history record information from the Department of Public Safety (DPS) for certain individuals associated with the administration of vocational rehabilitation services and other programs under Subtitle C, Title 4 of the Labor Code.
The bill would transfer the powers and duties under Chapters 91, 111, and 117 of the Human Resources Code from the Department of Assistive and Rehabilitative Services (DARS) to TWC. The bill would amend the Texas Labor Code by adding Title 4, Subtitle C regarding the transfer of the Vocational Rehabilitation (VR), Business Enterprises of Texas, Older Blind Independent Living Services, and the Criss Cole Rehabilitation Center programs from DARS to TWC on September 1, 2016 subject to federal approval of the transfer. The bill would require TWC to create a designated state unit for VR services to comply with federal regulations, and to integrate the two unique vocational rehabilitation programs into a single program no later than October 1, 2017.
The bill would create a Legislative Oversight Committee to facilitate the transfer of VR and other services and programs to reduce potential negative effects on the delivery of services to clients.
The bill transfers the powers and duties of the Human Rights Commission to the TWC three-member commission and streamlines the Civil Rights Division functions.
The bill would require the agency to develop risk-assessment criteria in determining the circumstances of providing additional reviews of the personnel policies and procedures of state agencies, and to set the related reimbursement rates at a level necessary to recover such expenses.
In addition, the bill authorizes TWC to participate in the federal Treasury Offset Program; requires TWC to collect and report on information regarding employment discrimination complaints; adds reporting requirements for TWC related to the effectiveness of their subsidized child care programs; and eliminates statutes enabling the Civil Rights Division's review of Fire Department tests, Rehabilitation Council of Texas, and the Human Rights Commission.
Except as otherwise specified, this bill would take effect September 1, 2015.
Methodology
According to TWC, DPS, and the Texas Department of Criminal Justice all of the duties and responsibilities associated with implementing the provisions of the bill relating to career schools and colleges, criminal history records, the Texas Rising Star program, the Civil Rights Division, the federal Treasury Offset Program, and participation in the Legislative Oversight Committee could be accomplished by utilizing existing agency resources.
The costs relating to the transfer of the Vocational Rehabilitation, Business Enterprises of Texas, Older Blind Independent Living Services, and the Criss Cole Rehabilitation Center programs from DARS to TWC totals approximately $309.1 million in each fiscal year beginning in fiscal year 2017. However, as it is assumed that any additional costs to TWC would correspond to equivalent cost savings at DARS, the net effect of this transfer is $0 and 0.0 FTEs and is not shown in the tables above.
According to information provided by DARS, the agency would have an additional cost of $1.9 million annually related to the loss of federal VR grant funds. As the federal grant does not allow these funds to transfer to any agency that is not administering the VR program, DARS would require General Revenue for Deaf and Hard of Hearing programs that had previously been funded with these federal grant dollars.
According to the Health and Human Services Commission (HHSC), the transfer of programs from DARS would impact the provision of administrative and enterprise support services performed by the agency. The five health and human services agencies currently use the approved cost allocation plans to ensure maximization of Federal Funds for these functions. The five agencies pay HHSC to perform these functions. DARS' allocated share is approximately four percent, or $1,268,034 in General Revenue, $17,639,421 million in All Funds, of the total cost allocation plan in fiscal year 2015. Assuming that associated regional lease costs for programs that will be transferred to TWC are removed from this total and that the remainder would be reallocated to the other health and human services agencies, there is a projected cost of $5,013,368 in General Revenue for DARS to discontinue paying HHSC oversight costs. This analysis assumes the total cost allocation plan remains the same as in fiscal year 2015 and HHSC will be required to redistribute the costs across the other enterprise agencies. A reduction in the total cost allocation plan would result in reduced General Revenue cost.
According to TWC, there would be cost savings of $2,257,819 and 6.0 FTEs in fiscal year 2017 and $4,502,419 and 27.0 FTEs each subsequent fiscal year related to the consolidation of the two unique VR programs and the integration of regional VR staff into TWC's local workforce development centers.
Based on information provided by TWC, it is estimated that participation in the federal Treasury Offset Program would result in additional revenue to the state of $1,300,540 in General Revenue-Dedicated Fund 165, $131,925 in General Revenue-Dedicated Fund 5128, and $145,943,630 in Other Fund 938 over the next five years. Estimates of fiscal impact assume a 12 percent collection rate from participation in the federal Treasury Offset Program on projected uncollected and covered contributions to unemployment compensation debt. The agency anticipates that any costs associated with the implementation of the program can be absorbed in the current federal Unemployment Insurance grant.
This analysis assumes that all costs related to the implementation of the bill are compared to current agency structures and costs. Analysis does not take into consideration any pending legislation related to appropriations or sunset recommendations.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
116 Sunset Advisory Commission, 529 Health and Human Services Commission, 405 Department of Public Safety, 538 Assistive and Rehabilitative Services, Department of, 539 Aging and Disability Services, Department of, 696 Department of Criminal Justice, 304 Comptroller of Public Accounts, 320 Texas Workforce Commission