LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION Revision 1 March 23, 2011 TO: Honorable Byron Cook, Chair, House Committee on State Affairs FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB2499 by Cook (Relating to the continuation and functions of the Department of Information Resources.), As Introduced No significant fiscal implication to the State is anticipated. The bill would amend statute relating to the continuation and operation of the Department of Information Resources (DIR). DIR is subject to the Sunset Act and will be abolished on September 1, 2011, unless continued by the Legislature. The bill would continue DIR for six years and would take effect on September 1, 2011. Sections 2 and 36: The bill would continue the operation of DIR for six years, until September 1, 2017. The bill would take effect September 1, 2011. Sections 3, 6, 8, 32, and 33: The bill would amend various sections of Chapter 2054 of theGovernment Code related to the composition of DIRs governing board; create a Customer AdvisoryCommittee that is made up of customers of DIRs key programs; and add alternative dispute resolutionprovisions. The bill would require the Governor to appoint the new board members by September 1,2011. Section 7: The bill would require DIR to adopt processes to determine the administrative fee chargedto administer its programs, including fees for the statewide technology centers andtelecommunications. The bill would require DIR to report to the Legislative Budget Board (LBB) alladministrative fees charged by DIR; the methodology used to determine the fees; and post on itswebsite each administrative fee DIR charges. Section 9: The bill would require DIRs board to appoint an internal auditor and establish an auditsubcommittee. Sections 10, 14, 15, and 20: The bill would require DIR's board to provide additional oversight whichincludes adopting a policy to set a strategic direction for DIR and to regularly evaluate DIR'soperations. The bill would require DIR to: develop clear criteria for its use of consultants and outsidestaff; develop a consistent method to measure costs and progress of an information resourcestechnology consolidations initiative; work with any entity involved in an information resourcestechnology consolidation initiative to determine baseline costs, and evaluate actual costs and costssavings related to the consolidation; and report annually to the board, the LBB, the customers of theconsolidation initiative, and post on its website, the results of the evaluation of costs and savings. The bill would require DIRs board by rule to: define what constitutes a major outsourced contract,including statewide technology and telecommunications contracts; approve new, or amendments toexisting, contracts; establish one or more committees to monitor DIRs major outsourced contracts;establish board approval requirements for all other contracts before the contract may be executed;implement conflict of interest provisions; and train staff on the requirements of these provisions. The bill would require DIR to: create a management plan for each major outsourced contract, asdefined by its Board; to specify procedures to administer, monitor, and oversee each major contract; establish procedures to ensure customer involvement regarding each major outsourcedcontract; develop a contract management training policy; establish training requirements for all staffinvolved in contract management; and update the guide periodically. The bill would require the boardto adopt rules as necessary to develop and update the contract management guide. Section 11: The bill would require DIR, upon request, to provide technical assistance to a state agencyto determine the agencys information resources technology needs and to solve the agencystechnology problems. Sections 12, 13, 16, 17, 18, 21, 22, 23, 24, 27, 28, 29, 30, 31, and 34: These provisions relatetransferring the responsibility for the statewide purchase of information technology commodity itemsfrom DIR to the Comptroller; require the Comptroller to provide training in contract negotiation;manage and use planned procurement schedules; coordinate technology training; establish rules toadminister the IT commodity contract program; and transfer all powers, duties, money, contracts,memoranda of understanding, records, leases, and rights of DIR related to the purchase of informationtechnology commodity items from DIR to the Comptroller. Sections 19 and 26: The bill would require the Comptroller to establish in the state treasury: theStatewide Technology Account under the purview of DIR, for the operation and management of astatewide technology center or for any other purpose specified by the legislature; and the ClearingFund under the purview of the Comptroller, for the administration of the purchase of informationtechnology commodity items or for any other purpose specified by the legislature. Section 25: The bill would require the Comptroller to adopt processes to determine the administrativefee charged to administer its programs. The bill would require the Comptroller to report to the LBB administrative fees charged by the Comptroller; the methodology used to determine the fees; and post on its website each administrative fee the Comptroller charges. ASSUMPTIONS Sections 7, 9, 11, and 20: DIR reported that to implement certain provisions in these sections of thebill, additional full-time equivalent positions (FTEs) and funding would be required. However, it isanticipated that any additional costs associated with implementation of the legislation could beabsorbed within existing resources. Sections 12, 13, 16, 17, 18, 21, 22, 23, 24, 27, 28, 29, 30, 31, and 34: Although not expresslyidentified, it is assumed that appropriations and FTEs funded by the administrative fee charged toagencies and local governments that use the information technology (IT) commodity contracts wouldtransfer from DIR to the Comptroller. Approximately 57.3 FTEs were budgeted in fiscal year 2011 to be funded by fees from the ITCommodity Contracts program. Of these FTEs, it is estimated that 32 FTEs would transfer to theComptroller to administer the IT Commodity Contracts program; 21.6 FTEs would remain at DIR; and3.7 FTEs would be reduced from DIRs FTE cap. In addition to the transfer of 32 FTEs, the Comptroller estimates that approximately $2,339,000 would be needed each fiscal year to administer the IT Commodity Contracts program. It is assumed this funding would be provided by the administrative fee charged to users of the states IT commoditycontracts out of the Clearing Fund. It is anticipated that the 21.6 FTEs identified above and $4,012,947 for related salaries and operatingcosts previously funded from the Clearing Fund would be needed by DIR to administer contractsrelated to telecommunications, statewide technology services, and for statewide IT planning andsecurity initiatives. It is also anticipated that these costs would be funded out of the revenues from theTelecommunications and/or Statewide Technology services. DIR may need to adjust its fees to coverthese additional costs. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies:116 Sunset Advisory Commission, 301 Office of the Governor, 304 Comptroller of Public Accounts, 313 Department of Information Resources LBB Staff: JOB, KJG, MS, EP, SD, KY, RC
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
Revision 1
March 23, 2011
Revision 1
Revision 1
TO: Honorable Byron Cook, Chair, House Committee on State Affairs FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB2499 by Cook (Relating to the continuation and functions of the Department of Information Resources.), As Introduced
TO: Honorable Byron Cook, Chair, House Committee on State Affairs
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB2499 by Cook (Relating to the continuation and functions of the Department of Information Resources.), As Introduced
Honorable Byron Cook, Chair, House Committee on State Affairs
Honorable Byron Cook, Chair, House Committee on State Affairs
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
HB2499 by Cook (Relating to the continuation and functions of the Department of Information Resources.), As Introduced
HB2499 by Cook (Relating to the continuation and functions of the Department of Information Resources.), As Introduced
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
The bill would amend statute relating to the continuation and operation of the Department of Information Resources (DIR). DIR is subject to the Sunset Act and will be abolished on September 1, 2011, unless continued by the Legislature. The bill would continue DIR for six years and would take effect on September 1, 2011. Sections 2 and 36: The bill would continue the operation of DIR for six years, until September 1, 2017. The bill would take effect September 1, 2011. Sections 3, 6, 8, 32, and 33: The bill would amend various sections of Chapter 2054 of theGovernment Code related to the composition of DIRs governing board; create a Customer AdvisoryCommittee that is made up of customers of DIRs key programs; and add alternative dispute resolutionprovisions. The bill would require the Governor to appoint the new board members by September 1,2011. Section 7: The bill would require DIR to adopt processes to determine the administrative fee chargedto administer its programs, including fees for the statewide technology centers andtelecommunications. The bill would require DIR to report to the Legislative Budget Board (LBB) alladministrative fees charged by DIR; the methodology used to determine the fees; and post on itswebsite each administrative fee DIR charges. Section 9: The bill would require DIRs board to appoint an internal auditor and establish an auditsubcommittee. Sections 10, 14, 15, and 20: The bill would require DIR's board to provide additional oversight whichincludes adopting a policy to set a strategic direction for DIR and to regularly evaluate DIR'soperations. The bill would require DIR to: develop clear criteria for its use of consultants and outsidestaff; develop a consistent method to measure costs and progress of an information resourcestechnology consolidations initiative; work with any entity involved in an information resourcestechnology consolidation initiative to determine baseline costs, and evaluate actual costs and costssavings related to the consolidation; and report annually to the board, the LBB, the customers of theconsolidation initiative, and post on its website, the results of the evaluation of costs and savings. The bill would require DIRs board by rule to: define what constitutes a major outsourced contract,including statewide technology and telecommunications contracts; approve new, or amendments toexisting, contracts; establish one or more committees to monitor DIRs major outsourced contracts;establish board approval requirements for all other contracts before the contract may be executed;implement conflict of interest provisions; and train staff on the requirements of these provisions. The bill would require DIR to: create a management plan for each major outsourced contract, asdefined by its Board; to specify procedures to administer, monitor, and oversee each major contract; establish procedures to ensure customer involvement regarding each major outsourcedcontract; develop a contract management training policy; establish training requirements for all staffinvolved in contract management; and update the guide periodically. The bill would require the boardto adopt rules as necessary to develop and update the contract management guide. Section 11: The bill would require DIR, upon request, to provide technical assistance to a state agencyto determine the agencys information resources technology needs and to solve the agencystechnology problems. Sections 12, 13, 16, 17, 18, 21, 22, 23, 24, 27, 28, 29, 30, 31, and 34: These provisions relatetransferring the responsibility for the statewide purchase of information technology commodity itemsfrom DIR to the Comptroller; require the Comptroller to provide training in contract negotiation;manage and use planned procurement schedules; coordinate technology training; establish rules toadminister the IT commodity contract program; and transfer all powers, duties, money, contracts,memoranda of understanding, records, leases, and rights of DIR related to the purchase of informationtechnology commodity items from DIR to the Comptroller. Sections 19 and 26: The bill would require the Comptroller to establish in the state treasury: theStatewide Technology Account under the purview of DIR, for the operation and management of astatewide technology center or for any other purpose specified by the legislature; and the ClearingFund under the purview of the Comptroller, for the administration of the purchase of informationtechnology commodity items or for any other purpose specified by the legislature. Section 25: The bill would require the Comptroller to adopt processes to determine the administrativefee charged to administer its programs. The bill would require the Comptroller to report to the LBB administrative fees charged by the Comptroller; the methodology used to determine the fees; and post on its website each administrative fee the Comptroller charges. ASSUMPTIONS Sections 7, 9, 11, and 20: DIR reported that to implement certain provisions in these sections of thebill, additional full-time equivalent positions (FTEs) and funding would be required. However, it isanticipated that any additional costs associated with implementation of the legislation could beabsorbed within existing resources. Sections 12, 13, 16, 17, 18, 21, 22, 23, 24, 27, 28, 29, 30, 31, and 34: Although not expresslyidentified, it is assumed that appropriations and FTEs funded by the administrative fee charged toagencies and local governments that use the information technology (IT) commodity contracts wouldtransfer from DIR to the Comptroller. Approximately 57.3 FTEs were budgeted in fiscal year 2011 to be funded by fees from the ITCommodity Contracts program. Of these FTEs, it is estimated that 32 FTEs would transfer to theComptroller to administer the IT Commodity Contracts program; 21.6 FTEs would remain at DIR; and3.7 FTEs would be reduced from DIRs FTE cap. In addition to the transfer of 32 FTEs, the Comptroller estimates that approximately $2,339,000 would be needed each fiscal year to administer the IT Commodity Contracts program. It is assumed this funding would be provided by the administrative fee charged to users of the states IT commoditycontracts out of the Clearing Fund. It is anticipated that the 21.6 FTEs identified above and $4,012,947 for related salaries and operatingcosts previously funded from the Clearing Fund would be needed by DIR to administer contractsrelated to telecommunications, statewide technology services, and for statewide IT planning andsecurity initiatives. It is also anticipated that these costs would be funded out of the revenues from theTelecommunications and/or Statewide Technology services. DIR may need to adjust its fees to coverthese additional costs.
The bill would amend statute relating to the continuation and operation of the Department of Information Resources (DIR). DIR is subject to the Sunset Act and will be abolished on September 1, 2011, unless continued by the Legislature. The bill would continue DIR for six years and would take effect on September 1, 2011.
Sections 2 and 36: The bill would continue the operation of DIR for six years, until September 1, 2017. The bill would take effect September 1, 2011.
Sections 3, 6, 8, 32, and 33: The bill would amend various sections of Chapter 2054 of theGovernment Code related to the composition of DIRs governing board; create a Customer AdvisoryCommittee that is made up of customers of DIRs key programs; and add alternative dispute resolutionprovisions. The bill would require the Governor to appoint the new board members by September 1,2011.
Section 7: The bill would require DIR to adopt processes to determine the administrative fee chargedto administer its programs, including fees for the statewide technology centers andtelecommunications. The bill would require DIR to report to the Legislative Budget Board (LBB) alladministrative fees charged by DIR; the methodology used to determine the fees; and post on itswebsite each administrative fee DIR charges.
Section 9: The bill would require DIRs board to appoint an internal auditor and establish an auditsubcommittee.
Sections 10, 14, 15, and 20: The bill would require DIR's board to provide additional oversight whichincludes adopting a policy to set a strategic direction for DIR and to regularly evaluate DIR'soperations. The bill would require DIR to: develop clear criteria for its use of consultants and outsidestaff; develop a consistent method to measure costs and progress of an information resourcestechnology consolidations initiative; work with any entity involved in an information resourcestechnology consolidation initiative to determine baseline costs, and evaluate actual costs and costssavings related to the consolidation; and report annually to the board, the LBB, the customers of theconsolidation initiative, and post on its website, the results of the evaluation of costs and savings.
The bill would require DIRs board by rule to: define what constitutes a major outsourced contract,including statewide technology and telecommunications contracts; approve new, or amendments toexisting, contracts; establish one or more committees to monitor DIRs major outsourced contracts;establish board approval requirements for all other contracts before the contract may be executed;implement conflict of interest provisions; and train staff on the requirements of these provisions.
The bill would require DIR to: create a management plan for each major outsourced contract, asdefined by its Board; to specify procedures to administer, monitor, and oversee each major contract; establish procedures to ensure customer involvement regarding each major outsourcedcontract; develop a contract management training policy; establish training requirements for all staffinvolved in contract management; and update the guide periodically. The bill would require the boardto adopt rules as necessary to develop and update the contract management guide.
Section 11: The bill would require DIR, upon request, to provide technical assistance to a state agencyto determine the agencys information resources technology needs and to solve the agencystechnology problems.
Sections 12, 13, 16, 17, 18, 21, 22, 23, 24, 27, 28, 29, 30, 31, and 34: These provisions relatetransferring the responsibility for the statewide purchase of information technology commodity itemsfrom DIR to the Comptroller; require the Comptroller to provide training in contract negotiation;manage and use planned procurement schedules; coordinate technology training; establish rules toadminister the IT commodity contract program; and transfer all powers, duties, money, contracts,memoranda of understanding, records, leases, and rights of DIR related to the purchase of informationtechnology commodity items from DIR to the Comptroller.
Sections 19 and 26: The bill would require the Comptroller to establish in the state treasury: theStatewide Technology Account under the purview of DIR, for the operation and management of astatewide technology center or for any other purpose specified by the legislature; and the ClearingFund under the purview of the Comptroller, for the administration of the purchase of informationtechnology commodity items or for any other purpose specified by the legislature.
Section 25: The bill would require the Comptroller to adopt processes to determine the administrativefee charged to administer its programs. The bill would require the Comptroller to report to the LBB administrative fees charged by the Comptroller; the methodology used to determine the fees; and post on its website each administrative fee the Comptroller charges.
ASSUMPTIONS
Sections 7, 9, 11, and 20: DIR reported that to implement certain provisions in these sections of thebill, additional full-time equivalent positions (FTEs) and funding would be required. However, it isanticipated that any additional costs associated with implementation of the legislation could beabsorbed within existing resources.
Sections 12, 13, 16, 17, 18, 21, 22, 23, 24, 27, 28, 29, 30, 31, and 34: Although not expresslyidentified, it is assumed that appropriations and FTEs funded by the administrative fee charged toagencies and local governments that use the information technology (IT) commodity contracts wouldtransfer from DIR to the Comptroller.
Approximately 57.3 FTEs were budgeted in fiscal year 2011 to be funded by fees from the ITCommodity Contracts program. Of these FTEs, it is estimated that 32 FTEs would transfer to theComptroller to administer the IT Commodity Contracts program; 21.6 FTEs would remain at DIR; and3.7 FTEs would be reduced from DIRs FTE cap.
In addition to the transfer of 32 FTEs, the Comptroller estimates that approximately $2,339,000 would be needed each fiscal year to administer the IT Commodity Contracts program. It is assumed this funding would be provided by the administrative fee charged to users of the states IT commoditycontracts out of the Clearing Fund.
It is anticipated that the 21.6 FTEs identified above and $4,012,947 for related salaries and operatingcosts previously funded from the Clearing Fund would be needed by DIR to administer contractsrelated to telecommunications, statewide technology services, and for statewide IT planning andsecurity initiatives. It is also anticipated that these costs would be funded out of the revenues from theTelecommunications and/or Statewide Technology services. DIR may need to adjust its fees to coverthese additional costs.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 116 Sunset Advisory Commission, 301 Office of the Governor, 304 Comptroller of Public Accounts, 313 Department of Information Resources
116 Sunset Advisory Commission, 301 Office of the Governor, 304 Comptroller of Public Accounts, 313 Department of Information Resources
LBB Staff: JOB, KJG, MS, EP, SD, KY, RC
JOB, KJG, MS, EP, SD, KY, RC