Honorable Charles Perry, Chair, Senate Committee on Water, Agriculture and Rural Affairs
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB243 by Flores (Relating to the regulation of migrant labor housing facilities; changing the amount of a civil penalty.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB243, As Introduced: a negative impact of ($1,068,014) through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($538,132)
2027
($529,882)
2028
($529,882)
2029
($529,882)
2030
($529,882)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2025
2026
($538,132)
3.0
2027
($529,882)
3.0
2028
($529,882)
3.0
2029
($529,882)
3.0
2030
($529,882)
3.0
Fiscal Analysis
The bill would amend Chapter 2306 of Government Code to change the amount of the civil penalty to which owners and/or operators of migrant labor housing facilities may be subject should they violate rules and regulations regarding migrant labor housing facilities. The penalty would change from $200 per day of violation to $50 per day of violation for each occupant of the housing facility. The penalty would be credited to the General Revenue Fund and may be appropriated only to the Texas Department of Housing and Community Affairs (TDHCA) for the enforcement of a subchapter that the bill would add. The bill would require TDHCA to establish rules related to the process for complaint submission, determining if complaints may constitute a violation of law or rule, and the investigation, resolution, or dismissal of a complaint. The bill would require TDHCA to notify an owner and/or operator of a migrant labor housing facility of the substance of a complaint within five days of a complaint's receipt. The bill would require TDHCA to develop rules that establish a process by which owners and operators may submit visual evidence and a sworn affidavit of complaint remediation, and require TDHCA to inspect a housing facility as soon as possible following the 7th day after the owner and/or operator receives notice to verify remediation if the owner and/or operator does not submit proof of remediation. The bill would require TDHCA to establish rules for relocating facility occupants if remediation of a complaint would take longer than 30 days. The bill would allow an action to collect the civil penalty to be brought by either: TDHCA through a contested case hearing at the State Office of Administrative Hearings; the county attorney for the county in which the violation occurred; the Office of the Attorney General at the request of TDHCA; or a migrant agricultural worker if certain conditions are met. The bill would allow courts to award reasonable attorney's fees to the prevailing party in a suit brought under a subchapter the bill would create. The bill would require TDHCA to coordinate with other state agencies to assist TDHCA in identifying and locating unlicensed migrant labor housing facilities. The bill would require TDHCA to conduct certain outreach and education efforts directed at migrant agricultural workers and at persons associated with migrant labor housing facilities, and to conduct research on migrant labor housing facilities.
Note: This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either in, with, or outside the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.
The bill would take effect on September 1, 2025.
Methodology
According to analysis by TDHCA, based on existing trends, the agency anticipates completing 10 to 15 migrant labor housing facility inspections per year under the bill's provisions. TDHCA utilizes third-party services to conduct inspections of migrant labor housing facilities. At current billing rates, TDHCA would face estimated annual costs of $263,000 to procure third-party services for the estimated amount of additional inspections that would result from the bill's provisions. To conduct complaint investigations, education, outreach, research, and interagency coordination, TDHCA would require 2.0 additional Compliance Analyst I FTEs and 1.0 additional Investigator IV FTE. Each Compliance Analyst I would have an annual salary of $62,136 and benefits of $18,592. The Investigator IV would have an annual salary of $58,288 and benefits of $17,440. All of the 3.0 additional FTEs would be remote, field employees that travel for 25-50% of their work time. Travel costs are estimated at $21,780 per fiscal year. The 3.0 FTEs will generate an estimated $4,950 in miscellaneous operating expenses each fiscal year. TDHCA anticipates it can absorb the cost of producing education and outreach materials.
According to information provided by TDHCA and the Comptroller of Public Accounts (CPA), the currently civil penalty of $200 per day of violation has been assessed only once since 2012, resulting in a total penalty collection of $6,000. The CPA anticipates that the bill's change to the existing civil penalty amount would have no significant fiscal impact on the state.
The State Office of Administrative Hearings (SOAH) anticipates that the bill could increase that agency's contested caseload, resulting in increased costs. The average TDHCA case takes an average of 32.5 hours to resolve. At SOAH's current billing rate of $165 per Administrative Law Judge hour, the average TDHCA case at SOAH costs $5,363 to resolve. The fiscal impact on SOAH cannot be determined as the number of contested cases that might result from the bill's provisions is unknown.
Technology
According to TDHCA, each of the additional FTEs would require a smartphone and a laptop. Estimated equipment costs are $11,220 in one-time costs in fiscal year 2026, and $2,970 each subsequent fiscal year.
Local Government Impact
The bill would allow TDHCA to refer a complaint to a local authority for immediate inspection of a migrant labor housing facility, and would allow TDHCA to request county attorneys to bring an action to collect the civil penalty described in the bill. These provisions of the bill could have fiscal impacts on units of local government, but the extent of those impacts cannot be determined.
Source Agencies:
212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts, 332 Department of Housing and Community Affairs, 360 State Office of Administrative Hearings