The Legislative Budget Board met on August 29, 2018 to hear from the Texas Alcoholic Beverage Commission concerning the agency’s Legislative Appropriation Request for the 86th Session and key exceptional items.
This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing, but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
Agency Presentation
Adrian Nettles, Executive Director of the Texas Alcoholic Beverage Commission
- Since I have taken over as head of TABC, we have encouraged open and transparent engagement with the alcoholic beverage industry
- More than 53,000 locations are licensed to serve Texas
- With a projected increase in population, there is a clear need for the additional resources we have requested
- We are a general revenue funded agency, but are required by rider to fund ourselves through surcharges we collect
- Our baseline budget request is around $100 billion
- Exceptional Item 1
- Our technology system needs to be updated
- There is no user level differentiation – for example, a secretary has the same access as an officer to information
- Exceptional Item 2
- New licenses require more time and investigation to issue than renewed licenses
- Our current software program that we use to handle applications cannot meet the demand for new applications
- Exceptional Item 3
- We are asking for 64 new agents to get us back to the number we had in 2008
- Border security and public safety require these additional agents
- Exceptional Item 4
- Our vehicles do not meet the Office of Fleet Management’s standards for civilian vehicles – there is no standard for law enforcement
- More vehicles are needed to meet the new number of agents and to reduce the cost of vehicle maintenance
- Exceptional Item 5
- We are hit with cyber-attacks and attempts every day
- Additional funding is necessary to buff up cybersecurity
- Exceptional Item 6
- We are requesting an additional 2 FTEs and $300,000 to make the transition to the new mandatory HR program
- Exceptional Item 7
- This item concerns five additional riders
- We are requesting the authority to move money between years in the biennium
- Capital budget expenditure for federal awards
- If we receive a federal award but it does not come through, we must return to LBB and request the same money
- This would allow us to expend those items but not have to wait on approval for expenditure
- The third rider is disaster and emergency contingency
- In case of a natural disaster and with the approval of the LBB, we would be able to handle the surcharges in the industry
- Riders for litigation contingency are necessary to enable us to continue to defend state law while fighting litigation
- We had a situation recently where six pieces of litigation were filed against us by the same individual and that hampered our legal department’s ability to do anything else
- In rare circumstances like this, the rider would need to be approved by the LAG office before we could access it
- Walmart has sued us, and the case is currently in the Fifth Circuit
- If the Fifth Circuit rules against us, the number of stores where you can buy spirits in Texas will dramatically increase
- The amount of time to process licensing would also dramatically increase
- This rider would serve as a contingency to bring in additional people to process the potential surge of applications
Questions from Joint Legislative/LBB Panel
- Question – Relating to your technology exceptional items, what is the cost of upkeep of those systems?
- We expect a $1-2 million ongoing upkeep cost
- Question – Exceptional item 3 concerns additional FTEs. Who are these for?
- The plan is to use them as agents
- Question – Is the agency pursuing any legislative changes that may impact the budget?
- We are currently undergoing a sunset review and that may impact the budget