The House Appropriations Committee on Articles I, IV, & V met to discuss House budget recommendations on a number of state agencies. This report only covers invited testimony from the Alcoholic Beverage Commission (TABC).
LBB Presentation – Texas Alcoholic Beverage Commission
- Staff Presentation – Link
- 2018-2019 LBB Recommendation: $97,789,982, Biennial Change -$3,596,410
- Recommendations include a reduction of $3,960,832 in General Revenue Funds in the agency's enforcement, licensing, compliance, ports of entry, central administration, information resources, and other support service functions, pursuant to the 4 percent reduction.
- CAPPS Reduction: TABC was appropriated $238,244 for 1.0 FTE and implementation costs for CAPPS by the Eighty-fourth Legislature, 2015. Recommendations eliminate this one-time funding and the associated FTE in the 2018–19 biennium.
- Data Center Services: Recommendations increase General Revenue by $601,128 to reflect current data center services estimates for the 2018-19 biennium.
- PC Replacement: Recommendations reduce funding for PC Replacement by $156,200.
- Recommendations increase salaries for certain Schedule C state employees by $20,678.
- Modified Rider 7: Appropriations Limited to Revenues Collections (ALRC) and Other Direct and Indirect Costs (ODIC) – Recommendations amend existing ALRC and ODIC riders for all affected agencies to update text and to remove non-ALRC information.New Riders
- New Rider 13: Judgments and Settlements – Recommendations include a new rider requiring payments including attorney’s fees and court costs resulting from actions or claims challenging the Texas Alcoholic Beverage Code and defended by the Office of the Attorney General or outside counsel to be paid from funds appropriated for that purpose and not from other appropriations to the Texas Alcoholic Beverage Commission.
Questions and Comments on LBB Presentation
- Rep. Giovanni Capriglione: On Data Center Services and the recommended “increase in General Revenue by $601,128 to reflect current data center services estimates for the 2018-19 biennium”, how much does TABC currently pay for these services?
- LBB Staff: I believe the agency might be able to answer that question. I will get back to the Committee with that information.
- Rep. Toni Rose: In regard to the new rider on legal fees, Rider #13, what is the need to hire outside counsel if the Attorney General’s Office can represent the agency?
- “Judgments and Settlements: Recommendations include a new rider requiring payments including attorney’s fees and court costs resulting from actions or claims challenging the Texas Alcoholic Beverage Code and defended by the Office of the Attorney General or outside counsel to be paid from funds appropriated for that purpose and not from other appropriations to the Texas Alcoholic Beverage Commission.”
- LBB Staff: The AG’s office can and does represent the agency on matters, however it was through their own request that this provision is in place.
Agency Presentation – Texas Alcholic Beverage Commission
Sherry Cook, Texas Alcoholic and Beverage Commission – Executive Director
Vanessa Mayo, Texas Alcoholic and Beverage Commission – Chief Financial Officer
- TABC expects to collect $600 million dollars over the next biennium.
- In composing our estimated budget, we applied principles using a zero based budget, using our agency’s historical expenditures to find out where to best reduce our budget by 4% as requested.
- TABC’s work is vital to reducing the number of public safety violations.
- 12-14% of undercover inspections reveal public safety violations and over the years the agency has greatly increased the number of undercover inspections.
- That said, these operations require multiple agents working in concert and budget cuts might affect the agency’s capabilities in this area.
- Notable Exceptional Items: Public Safety Positions – 41.0 FTEs including 2.0 Captains, 6.0 Sergeants, and 33.0 Agents within the Enforcement Division to conduct inspections, Case Management to replace and consolidate existing systems, Central Administration – CAPPS reduction in the agency's Central Administration strategy, Licensing services- 5.0 FTEs to process renewal and original license applications, Centralized Accounting and Payroll/Personnel System (CAPPS) HR – Salaries and wages and other personnel costs for 1.0 FTE for CAPPS HR, Vehicles – Funding and capital authority to purchase 30 additional vehicles over the agency's 2018-19 recommended funding for vehicles, Cybersecurity – Increased costs for cybersecurity infrastructure.
Questions and Comments on the Agency Presentation
- Rep. Oscar Longoria: Rep. Rose posed a question to the LBB in regard to Rider #13, as it relates to outside legal counsel. Could you comment further?
- S. Cook: Yes. The rider would allow us to drive down the amount of our budget that is spent on legal services. Currently, legal fees are taken from our general appropriations; with the new rider, legal service fees would be paid from funds appropriated for that specific purpose. We have 13 lawsuits that are still awaiting a final verdict, 3 of which that are being handled by outside counsel.
- Rep. Longoria: What are the legal petitions brought against the agency typically in relation to?
- S. Cook: Most of the claims brought against the agency challenge the three tiered system in the state or the beverage codes.
- Rep. Longoria: Are these claims brought in federal or state courts?
- S. Cook: Both.
- Rep. Longoria: I am assuming that matters that challenge the constitutionality are taken up in federal court.
- S. Cook: Correct.
- Rep. Toni Rose: I asked LBB staff this earlier, but it is probably a better question for the agency. If the Commission is a state entity, what is the purpose of seeking outside counsel?
- S. Cook: This was a recommendation from the Attorney General’s office.
- Rep. Oscar Longoria: How do we go about procuring who the state will hire as outside council?
- S. Cook: I’d have to go back to give you the extensive protocol we use, however there is a pretty heavy de-confliction process that goes on. Any history of representing an alcohol companies is typically disqualifying to a firm’s eligibility.
- Rep. Giovanni Capriglione: In regard to data center services, what percent increase is this from last year? Also, who is the payment made to?
- S. Cook: The payment is made to the Department of Information Resources. As far as the percent increase or change, I can get that to you soon.
- Rep. Capriglione: Could you comment further on what this PC replacement is for, why is necessary?
- S. Cook: Yes. Our systems are old and incompatible with each other. Moreover, the system as a whole doesn’t have the proper security requirements for our special investigation units.
- Rep. Oscar Longoria: Are we still doing operations in conjunction with the federal government?
- S. Cook: We are attached to quite a few task forces and work with federal, state and local law enforcement. Typically, we focus on the administrative side of things and leave the criminal element up to law enforcement, although we have the capacity to handle that side as well.
- Rep. Longoria: Do we get reimbursed for those joint programs?
- S. Cook: We do.
- V. Mayo: In fiscal year 2016, the TABC received $8,000 in federal reimbursement for overtime work.