LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 12, 2011 TO: Honorable Byron Cook, Chair, House Committee on State Affairs FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB3129 by Price (Relating to requiring employers to participate in the federal electronic verification of work authorization program, or E-verify; creating an administrative penalty.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3129, As Introduced: a negative impact of ($2,066,842) 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.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 12, 2011
TO: Honorable Byron Cook, Chair, House Committee on State Affairs FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB3129 by Price (Relating to requiring employers to participate in the federal electronic verification of work authorization program, or E-verify; creating an administrative penalty.), As Introduced
TO: Honorable Byron Cook, Chair, House Committee on State Affairs
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB3129 by Price (Relating to requiring employers to participate in the federal electronic verification of work authorization program, or E-verify; creating an administrative penalty.), 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
HB3129 by Price (Relating to requiring employers to participate in the federal electronic verification of work authorization program, or E-verify; creating an administrative penalty.), As Introduced
HB3129 by Price (Relating to requiring employers to participate in the federal electronic verification of work authorization program, or E-verify; creating an administrative penalty.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3129, As Introduced: a negative impact of ($2,066,842) 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.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3129, As Introduced: a negative impact of ($2,066,842) 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.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 ($1,409,208) 2013 ($657,634) 2014 ($657,799) 2015 ($657,977) 2016 ($658,192)
2012 ($1,409,208)
2013 ($657,634)
2014 ($657,799)
2015 ($657,977)
2016 ($658,192)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2011 2012 ($2,609,208) $1,200,000 17.2 2013 ($1,857,634) $1,200,000 17.2 2014 ($1,857,799) $1,200,000 17.2 2015 ($1,857,977) $1,200,000 17.2 2016 ($1,858,192) $1,200,000 17.2
Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2011 2012 ($2,609,208) $1,200,000 17.2 2013 ($1,857,634) $1,200,000 17.2 2014 ($1,857,799) $1,200,000 17.2 2015 ($1,857,977) $1,200,000 17.2 2016 ($1,858,192) $1,200,000 17.2
2012 ($2,609,208) $1,200,000 17.2
2013 ($1,857,634) $1,200,000 17.2
2014 ($1,857,799) $1,200,000 17.2
2015 ($1,857,977) $1,200,000 17.2
2016 ($1,858,192) $1,200,000 17.2
Fiscal Analysis
The bill would amend the Labor Code and define Commission, employee, employer, and E-verify program. The bill would require an employer to register and participate in the E-verify program to verify information of all new employees. The bill would authorize the Texas Workforce Commission (TWC) to assess an administrative penalty of not less than $5,000 for a first violation and $10,000 for each subsequent violation against an employer who violates this chapter or a rule or oder adopted under this chapter.
The bill would amend the Labor Code and define Commission, employee, employer, and E-verify program. The bill would require an employer to register and participate in the E-verify program to verify information of all new employees.
The bill would authorize the Texas Workforce Commission (TWC) to assess an administrative penalty of not less than $5,000 for a first violation and $10,000 for each subsequent violation against an employer who violates this chapter or a rule or oder adopted under this chapter.
Methodology
The following assumptions were included in this analysis based on information provided by TWC for fiscal year (FY) 2012: TWC projected the number of businesses affected (460,763); number of employers that would be inspected (9,215); number of employers that would be in compliance (8,293); number of employers that would not be in compliance (922); number of employers that would not appeal a determinaion order (93); number of employers that would appeal the determination hearing (832); number of cases in a determination hearing that would be dismissed (125); and number of cases that would be found adverse to the employer (707). For the purposes of this analysis, similar projects were made for subsequent years. Based on the analysis of TWC, it is assumed that additional staff would be needed to investigate employers, conduct hearing tribunals, and administer the appeals process. For the purposes of this analysis, additional staff that would be needed would include: 2.2 Account Examiners; 4 Attorneys; 6 Legal Assistants; 4 Hearing Officers; and 1 Administrative Assistant. Total costs for FY 2012 are estimated at $2,609,208 for the following: Salaries/Benefits ($1,316,191) + Other Operating Expenses ($1,087,137) + Administrative and Support Costs ($205,880). For the purposes of this analysis TWC estimates that 20 percent of penalties assessed would be collected; which is based on the collection rate of other penalties that go to hearing. The revenue gain shown only considers penalties assessed for first time violators. Revenue from penalties collected for subsequent violations cannot be determined because data regarding the number of these offenses does not exist.
The following assumptions were included in this analysis based on information provided by TWC for fiscal year (FY) 2012: TWC projected the number of businesses affected (460,763); number of employers that would be inspected (9,215); number of employers that would be in compliance (8,293); number of employers that would not be in compliance (922); number of employers that would not appeal a determinaion order (93); number of employers that would appeal the determination hearing (832); number of cases in a determination hearing that would be dismissed (125); and number of cases that would be found adverse to the employer (707). For the purposes of this analysis, similar projects were made for subsequent years.
Based on the analysis of TWC, it is assumed that additional staff would be needed to investigate employers, conduct hearing tribunals, and administer the appeals process. For the purposes of this analysis, additional staff that would be needed would include: 2.2 Account Examiners; 4 Attorneys; 6 Legal Assistants; 4 Hearing Officers; and 1 Administrative Assistant. Total costs for FY 2012 are estimated at $2,609,208 for the following: Salaries/Benefits ($1,316,191) + Other Operating Expenses ($1,087,137) + Administrative and Support Costs ($205,880).
For the purposes of this analysis TWC estimates that 20 percent of penalties assessed would be collected; which is based on the collection rate of other penalties that go to hearing. The revenue gain shown only considers penalties assessed for first time violators. Revenue from penalties collected for subsequent violations cannot be determined because data regarding the number of these offenses does not exist.
Technology
Modifications to the existing Unemployment Insurance system, mailing costs, and personal computers for employees would be required to implement the bill. TWC estimates this would cost appoximately $765,000 for the 2012-13 biennium and approximately $41,000 during subsequent fiscal years.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 320 Texas Workforce Commission
320 Texas Workforce Commission
LBB Staff: JOB, KJG, JI, KKR, MM
JOB, KJG, JI, KKR, MM