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The Senate Committee on Finance met on February 3rd to hear LBB and agency presentations on the Article I agencies below:

  • Commission on the Arts
  • Library and Archives Commission
  • Veterans Commission
  • State Preservation Board
  • Office of the Governor & Trusteed Programs within the Office of the Governor
  • Office of the Attorney General
  • Secretary of State
  • Facilities Commission
  • Revenue Bonds for Lease Payments
  • Public Finance Authority & General Obligation (GO) Bond Debt Service
  • Bond Review Board
  • Department of Information Resources
  • State Office of Risk Management
  • Ethics Commission

A video archive of the hearing can be found here.

This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions 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.

 

Opening Comments

  • Hinojosa – Had to rearrange hearings, Art II invited moved to next Friday Feb 10th, public testimony moved to Feb 21st

 

SB 1 (Huffman) General Appropriations Bill.

 

Library and Archives Commission LBB Presentation

  • Link to presentation
  • $11m decrease from last biennium
  • Decrease of Federal Funds due to expenditure of one-time ARPA funds for library funds, also a decrease of capital funds related to Sam Houston Center, TX Digital Archive, and membership fees, others
  • $8.3m in one-time ARPA funds for grants for broadband & tech updates
  • Riders incl. datacenter updates, library innovation rider deleted due to fully awarded grant
  • 5 exceptional items incl. salary increases, archival storage building to be included in supplemented bill
  • Hinojosa – Some items were added to supplemental?
    • Just for the construction of the new archival facility in Pflugerville, item 5

 

Library and Archives Commission Agency Presentation

Gloria Meraz, LBB

  • Appreciates funding in SB 1 & funding allocated for new archival storage facility, will allow for many years of storage
  • Appreciates base funding for salary increases; asking for additional amounts in exceptional items, TSLAC employees earn only 71% of salary of similar Art. I agency employees
  • Other items are for new staff, for critical positions like IT, business division staff like budget analyst, facilities manager, staff attorney
  •  Exceptional item for $4.4m for rural libraries serving populations of 12k and under for IT support
  • Perry – On the salary increase, how many is this going to?
    • Hope is to go as broadly with as many positions as possible, prioritizing professional positions and lowest earners
  • Perry – What is the standard for your competitive wage?
    • Basing on other Art I agencies, $15-$20 for lowest earners, others @$60k/year; currently TSLAC is at $54k
  • Perry – Authorized for >170 FTEs, how many do you have?
    • 156 FTEs currently
  • Bettencourt – Have any stats on public interface? Keeping stats?
    • Can get this to you
  • Zaffirini – You’re asking for salary increase in addition to any across the board increase?
    • Yes
  • Zaffirini – How would increasing broadband in rural areas impact your exceptional item requests?
    • Makes it more important to make sure TSLAC has qualified staff to help communities navigate IT needs
    • In conversations with Broadband Development Office over additional project staff as more funding becomes available
  • Flores – On facilities manager exceptional item, who does the function now?
    • CFO currently serves also as facilities manager
  • Flores – No other agency doing this for you?
    • We do coordinate with TFC, but staff coordinates with that office
  • Flores – Wondering if there was another person in another agency to do all of this & why we couldn’t move that funding and FTE towards you; don’t want to double fund
  • Hall – Over the last year, libraries are flooded with extremely graphic books; only there because of the ill-conceived education exemption
    • Parents, communities, and TSLAC all have the same goal
    • TSLAC has been working with SBOE to update standards; TSLAC doesn’t have oversight over local libraries or enforcement jurisdictions, but does maintain a set of voluntary standards districts may choose to use
    • Have been meeting over what a policy should look like, building policy in concert with communities and parents
    • Focusing on transparency, accessibility of catalogue, etc.
    • TSLAC’s role is to work with TEA and SBOE and put that forward
  • Hall – But this is voluntary on their part and all you can do is suggest?
    • Yes
  • Hall – Is it adequate to get these books out of libraries?
    • Can’t speak to that, many districts have followed voluntary standards in the past; some do not because they either don’t have capacity or are unable to
  • Hall – Anything legislature can do to make sure you have more teeth and enforcement over these libraries?
    • Will happily abide by any mandates legislature sends us, do not have any enforcement capacity
  • Hall – Happy to talk afterwards to make sure there are teeth
  • Campbell – You manage the archives; what libraries do you have jurisdiction over?
    • Not any, no enforcement over public or school libraries
  • Campbell – Part of your jurisdiction? Disconnected?
    • No jurisdiction, have a role in supporting capacity and providing guidance
  • Campbell – So you run the archives?
    • We run archives and have statewide programs, also run Talking Book Program
  • Paxton – Can you provide copy of guidance to my office?
    • Yes
  • Paxton – Does your guidance includes redress/complaints process for community?
    • Yes, front & center of guidance built last year; key was reconsideration policy

 

Commission on the Arts LBB Presentation

  • Link to presentation
  • $23.4m All Funds, decrease from 2022-23 biennium
  • No fiscal and policy issues to discuss
  • Zaffirini – Asks after salary increases
    • Provided an update to their original request
    • Commission on the Arts is requesting an additional salary increase

 

Commission on the Arts Agency Presentation

Gary Gibbs, TCA

  • Have seen a 30% increase in grant requests recently; $3m over biennium will get us back to 2014 level of impact of grants; majority of agency budget goes to these grants
  • Second item goes to cultural district program, sue arts to support eco dev in local communities; asking for $5m to help meet need of requests
  • Appreciates legislature for including staff salary increases, asking for additional funds for salary to keep competitive with nonprofit arts industry
  • Hinojosa – Very supportive of the arts, part of life & culture, but also good for business
  • Zaffirini – Do you have data on economic multiplier effect of dollars invested?
    • Last biennium it was $6.6b in eco activity and $360m in tax dollars to state, new numbers coming out next week
  • Hinojosa – Cultural districts are packed with people in my district

 

Veterans Commission LBB Presentation

  • Link to presentation
  • $125.8m All Funds
  • Mental Health Department funding shifted from HHSC; similar decrease in HHSC budget to reflect shift
  • 7 riders have been modified, most reflecting title changes
  • Exceptional items total $1.2m, mostly additional FTEs for program support

 

State Preservation Board LBB Presentation

  • Link to presentation
  • $121.5m, increase of $33m compared to last biennium, increase FTE levels by 4
  • $7.5m total in exceptional items, 8 FTEs for the Texas Mall

 

State Preservation Board Agency Presentation

Rod Welsh, SPB

  • Previous exceptional items 1 and 5 have been covered in introduced bill, LAR reflects this, remaining total is $7.5m
  • Exceptional items for replacement of roof & boiler system at Texas State History Museum are the most important
  • $1.7m to complete buildout of Museum’s Austin Room
  • Remaining include gift shop renovation, landscaping, parking garage, etc.; aside from landscaping, the items cover revenue generating items
  • $540k for free field trips for schoolchildren
  •  $553k to cover increased costs of IT services
  • Hinojosa – Seems like the Texas State History Museum is about to fall apart, lot of damage being done by leaks in the roof
    • Museum was built in 2001, museum and other properties are aging at the same rate, 20-25 years
  • Hinojosa – So if roof is not fixed, could possibly damage artifacts in the Museum?
    • Yes
  • Zaffirini – Field trips are free admission to exhibits?
    • Expense is outpacing revenue
  • Zaffirini – Not asking to fund the field trip, just the admission?
    • Yes, the cost to manage the program
  • Bettencourt – One of the boilers has failed completely? Critical M&O, no reserve fund, haven’t gone to LBB? Just an exceptional item?
    • Yes
    • Asking for it as an exceptional item, have been nursing it along with repairs but most cost-effective method is to replace
  • Huffman – Original to the museum?
    • Yes
  • Bettencourt – Original system that cannot be repaired?
    • Repairs and maintenance would cost more than replacement
  • Bettencourt – Mechanical equipment should be able to be repaired; you have one of two boilers down; don’t understand how this isn’t critical M&O that hasn’t been addressed until it is an exceptional item
  • Huffman – We had planned to fund in the supplemental to get this fast-forwarded, have a sticky note rider and have told them we would fund this to help it get going
  • Bettencourt – Trying to understand why it wouldn’t have been already handled
  • Huffman – Can’t just write them a check
  • Bettencourt – you’ve an IT service line item, what are you getting for $553k?
    • Not only software upgrades, but staff time, etc.
  • Bettencourt – Can you send the detail over?
    • Yes
  • Kolkhorst – How long are we going to endure the roof damage? New roof?
    • Roof replacement, first time since 1949; replacement would be a two year project, 85k sq ft of copper on the existing roof
  • Kolkhorst – How long do you project the roof is going to last? Sometimes we’re not funding maintenance properly to save money now; what do you need to ensure a boiler makes it longer than 23 years?
    • Early on after restoration everything was brand new, try to take care of things as they age
  • Kolkhorst – Roof currently being replaced on the Capitol?
    • Appropriated funds last session
  • Huffman – I think its ARPA money
  • Kolkhorst – Scaffolding will be down when?
    • Hope it will be down by 2025, doing it in sections, on the East Side now
  • Kolkhorst – Late 2024?
    • That would be our hope

 

Office of the Attorney General LBB Presentation

  • Link to presentation
  • $1.3b in All Funds, $7.8m decrease
  • Reduction of $2.9m in GR related to swap in federal funds for the Child
  • Decrease of $14.3m due to projected decrease in collection from court costs and attorneys fees
  • Crime Victims Compensation account has seen decline in revenues from court costs, if current funding maintained will be $21m at end of 2024-25; expecting to have GR-federal funding swaps that will solve issue; Sexual Assault services Program Grants account has a similar issue; amounts detailed on Pg 6 of presentation
  • Outside Legal Counsel for anti-trust Google litigation, case is proceeding to discovery, trial expected 2024; recommendations do not include request to amend Rider 32 to allow carry forward of original amounts
  • Child Support IT Modernization Project, recommendations do not include agency request for $53m for Phase III
  • Rider highlights on Pg 9, rider deletions on Pg 10, 2 new riders on unexpended balance for federal asset forfeitures, fee from sexually oriented businesses
  • $150.6m in exceptional items, incl. salary increases for critical staff, additional funding for Criminal Investigations Division, and Phase III of Child Support Modernization Project
  • Agency is no longer requesting modification for border security and deletion of Human Trafficking Prevention rider
  • Hinojosa – AG’s Office has declined to provide representation to certain state agencies, is funding for the agency to hire counsel transferred from AG’s Office or is there another budget?
    • Would be drawn from the state agency’s budget
  • Hinojosa – Will ask AG’s Office, sometimes an unexpected cost when AG’s Office won’t represent
  • Hinojosa – On Border Security rider, AG’s Office was not able to provide clear answer on funds spent, would the rider modification solve this?
    • Rider modification would have deleted them from reporting requirements, but agency is no longer requesting a change to the reporting requirement
  • Zaffirini – Are there criteria or a process to determine when an agency could secure outside counsel?
    • Would defer to agency; will have to follow up

 

Office of the Attorney General Agency Presentation

Ken Paxton, Attorney General

  • Provides overview of agency operations & ongoing litigation
  • Involved in Medicaid 1115 waiver, Hazelwood, etc.
  • OAG provides substantial return on dollars invested, roughly $3 per every $1 appropriated
  • Appreciates inflationary salary increase, thankful for support on Victims Assistance Grants
  • Exceptional items incl. support for litigation against Google, Criminal Investigations Unit, IT projects, and extension of funding for appropriations under supplemental bill for certain programs
  • Campbell – You recovered billions from the opioid settlement?
    • $2.9b, working with other states, other states would’ve wanted to put companies in bankruptcy which would not have helped state
  • Campbell – Dollars needed to go through committee & there is a delay; how do these dollars flow
    • 15% for local govs, other portion controlled by Opioid Abatement Council
    • Hope in getting money quickly was for quick dispersal
  • Campbell – Other dollars that you recover, is this how they usually flow? Do they come into GR?
    • Usually goes to GR, some exceptions
    • In order to get negotiation agreed to, companies insisted it goes to opioid prevention
  • Campbell – Time limit on getting those dollars out?
    • Time limit is based on Council making decision to get that money out
  • Flores – On the border funding, constituents in rural areas are left with the bill; victim compensation is for violent crimes and victims of sexual abuse, but could the umbrella cover rural citizens? Additional fund that could cover this?
    • Very open to this; very constrained by statute, property damage is specifically not covered and legislature could direct us to do this
  • Flores – Don’t want to take away from victims of violent crimes, but fiscal cost to ranchers is huge
  • Flores – What amount of assistance does the AG provide to local prosecutors whose systems are overwhelmed by crime?
    • OAG is dependent on prosecutors in each county to refer cases to us, OAG has no original jurisdiction
    • Some DAs enforce laws, some don’t; some have nullified law on some crimes; only way to fix this is to give us jurisdiction or some other agency
  • Flores – Civil remedy for those DAs that fail to enforce laws of the state?
    • Yes, have seen bills filed on this, could potentially remove DAs failing to enforce laws
  • Flores – What would be your thoughts on something similar to RICO Act?
    • Will have more trouble in the future with cartels, would need to see how it is drafted, but open to other methods of enforcement against cartels; Biden Administration won’t stop this
  • Kolkhorst – Sen. Blanco & I have been working on legislation; need to set up a separate fund for compensation, not just a border issue
  • Kolkhorst – You’ve requested $26m from targeted salary increases, covers Crime Victims Compensation? Legislators get calls when the
    • Since COVID and inflation, have struggled to retain employees
    • Michele Price, CFO OAG – Targeted increase does include some staff from Crime Victims Compensation; have put some practices in place now to address turnover in call center and Program
  • Kolkhorst – Burleson County is now being sued over pro-life bill and must appear in federal court, some smaller counties are being targeted & they will need to hire outside Counsel; OAG has declined to defend them, do we need to file legislation to give you authority, is it a budget issue?
    • Brent Webster, OAG – When looking at representing state actor we look to statute for authority, in most cases it doesn’t exist; if legislature broadened authority, then it could solve this issue
  • Kolkhorst – Many of these local counties don’t have abortion providers, spending local tax dollars; look forward to broadening authority
  • Zaffirini – Waitlist for counseling services under Victims Assistance Program, what is the extent of list, what would funding impact
    • Price, CFO OAG – Can’t speak to waitlist, grantees would need to comment on this
    • OAG would use that funding to disburse to grantees to address waitlist
  • Zaffirini – Also a reference to a pilot project supporting unique challenges facing border & rural communities, how would funding affect this?
    • Lesley French, OAG – Have seen increase in reports, grantees have requested additional funds to address waitlists
  • Huffman – Rape Crisis Centers have a card to testify, goal was to give them everything they asked for so there was no wait
  • Zaffirini – Does your agency have criteria for agencies hiring outside counsel? Does this include using a contingency fee or alternative fees?
    • Webster, OAG – 38k cases at any given cases, most declines in a given year are about 60
    • Look at possible costs & capability of litigation opponent, make decisions to use other firms as a force multiplier
  • Zaffirini – Have had much fewer calls on child support; what did you do to improve volume of calls regarding child support?
    • Ruth Anne Thornton, Director of Child Support & IV-D – Relied on staff, have focused on families first; looked at holistic performance of the program, how well & completely are we performing mission
  • Zaffirini – Asks about AG representation of state agencies
    • AG Paxton – Don’t think we have any real connection to them; we do represent agencies in legal matters, but we respond to them
  • Huffman – I think there was an incident where office claimed AG wouldn’t represent them
  • Huffman – On Google case, you entered into cost-sharing agreements with states?
    • Webster, OAG – IN process of negotiating this agreement with other states, a lot of other states joined the lawsuit and hoping to finalize within the month
  • Paxton – Want to ask about RICO as possible way of combatting human trafficking, how can you support local DAs in combatting human trafficking?
    • AG Paxton – Asked for extended authority, number of DAs prosecuting human trafficking was low; gave them a time period and then OAG would step in to prosecute
  • Hinojosa – On human trafficking and racketeering, some DAs aren’t prosecuting; currently we have a law allowing people to file to remove a DA for negligence, etc.
  • Hinojosa – Many agencies don’t have the expertise to defend themselves; OAG has authority to be able to represent agencies, but have in the past declined to do so & they have to go outside to hire counsel; rider exists that requires OSG to report who they decline to represent
  • Hinojosa – Some agencies you have declined to represent may not have the funds allocated to be able to defend themselves, possible to have funds transferred
    • Can only remove DAs for incompetency, misconduct, or intoxication, pretty narrow statute
    • 25% of declined cases due to agencies asking to seek specialties, 25% have no authorities, remainder due to conflict
    • Can’t step into a case where I believe the argument is violating constitutional rights
    • Webster, OAG – Attorney costs are covered by combo of GR, attorneys fees arrangements; majority of the time agencies are asking us to decline representation
  • Hinojosa – When agencies want to be represented by you, costs are funded
    • Try to create interagency agreements for cost sharing when they are taking actions that might lead to litigation
    • Situation unique to each case
  • Hinojosa – If you didn’t want to represent Ethics Commission for instance, is the interagency contract on a lawsuit or agency basis
    • Don’t have a contract with TEC, though we did represent
  • Hinojosa – Statute for DA removal is pretty broad, have seen this happen; lawsuit filed in Nueces did include DA not prosecuting certain cases
    • Statute basis has definition, has been interpreted more strict than it sounds; OAG position is that this should be broadened to declining to prosecute cases legislature says should be prosecuted
  • Hinojosa – Will have a discussion on this down the line
  • Hinojosa – On salaries, can’t compete with private sector
    • AG Paxton – Yes, one of the bigger challenges is losing attorneys to UT, etc.; OAG can’t compete against other state agencies
  • Bettencourt – Agrees we should show more alacrity in getting opioid moneys distributed
  • Bettencourt – On child support, you had employees with no management and put that in place?
    • Heard that a lot of decisions were made at the top and were getting bottlenecked, structure has completely changed
    • Thornton, Director of Child Support & IV-D – Provides overview of Child Support renovation, started with asking what problems were, tried to push decision making authority out as appropriate
  • Bettencourt – Complaints for child support have decreased, want to commend this
    • AG Paxton – Was personally frustrated with complaints, needed to improve; made significant changes at the top level; Thornton was the right person to rely on
  • Bettencourt – You seem to have a very high win rate against the federal government
    • Attorneys have been very good at figuring out where we need to file lawsuits & crafting them
  • Bettencourt – Sherman Act anti-trust case would be the largest prosecution under this Act?
    • Yes, largest anti-trust case in history, not the only country concerned about Google; US Gov filed a similar lawsuit
  • Bettencourt – On the Stephens case, did that decision eliminate prosecutorial ability in election cases and cut in Criminal Investigation Division work?
    • Yes, relates to ability of AG to prosecute voter fraud, Court of Criminal Appeals said it was a violation of OAG to be in court as it was a violation of Separation of Powers
    • No appeal right, leaves OAG in a challenging position where DAs won’t prosecute voter fraud; very concerned on where this leads us
    • If ruling is correct, every Attorney General shouldn’t be in court ever
  • Bettencourt – Will need to come up with a solution that wires around the CCA decision
    • Get complaints from Republicans and Democrats, if DAs don’t prosecute it is a message
  • Bettencourt – Concerned that this decision took enforcement power from you; will need to do something legislatively; will need to find balance on original jurisdiction, concurrent jurisdiction, etc.
    • You need to have a backup, in most states there is another way for prosecutions to occur
  • Bettencourt – Agree with DA replacement being too narrow, another issue is where suits are filed; need to revisit concept that if legislature passes laws, what is needed to enforce them
    • Constitution gives certain powers, protect citizens from fraud, represent state, etc.; also directed to enforce laws as directed by the state, CCA ruling goes against this
  • Perry – $40k/year to rural Texas for a call center is a great opportunity for you to expand your footprint; would ask your HR division to look at this
  • Perry – Have heard that ISDs have opportunity to call OAG on cultural issues, issues they are fearful of engaging in; want to work to ensure OAG has authority to support ISDs
    • Staff has been looking at moving people out of Austin and trying to find less expensive ways to operate
    • Did send letter out to schools that OAG would represent them on COVID suits, can’t make them hire us
  • Perry – Just want to make sure message is out there, many ISDs don’t think OAG is an option
  • Kolkhorst – You’re filing concurrent jurisdiction bill on human trafficking?
  • Huffman – Has difficulties in the House
  • Kolkhorst – Hard issue, has jurisdictional issues
    • Many DAs don’t want to go outside jurisdiction, one of the areas we could really help on
  • Kolkhorst – Recently saw issue with AT&T censoring what is on channels, can you do anything on this?
    • Looked at this last year with OAN, think House & Senate should do what Congress is doing and investigate
    • Heard that one political party has directed OAN, Newsmax, and Fox be taken off, now 2 out of 3 have been
    • Would appreciate hearings on this
  • Kolkhorst – Have concerns on these issues like ESG, twitter shadow banning, etc.
    • Appreciate this

 

Recessed until 12:30

 

Office of the Governor LBB Presentation

  • Link to presentation
  • @29.6m in All Funds, $2m decrease
  • $2m GR related to statewide salary adjustments
  • Agency not expecting unexpended balance, requests reducing UB from $1.8m to $0

 

Office of the Governor Trusteed Programs LBB Presentation

  • Link to presentation
  • $2.1b in All Funds
  • Decrease of $1.8b in GR related to transfer of border security funds to TMD
  • No funding for Texas Enterprise Fund due to existing balances being obligated or expended
  • $40m for Gov’s University Research Initiative4 carried forward
  • $1b in GR for border security, $1.8b decrease, additional authority now allocated under GR for Border Security account
  • Rider addition allowing agency to carry forward $53m from budget execution order related to school safety (bullet-resistant shields and training)
  • Large drop off of federal funds due to removal of ARPA funds

 

Office of the Governor Agency Presentation

Gardner Pate, Gov. Abbott Chief of Staff

Sarah Hicks, Office of the Governor

  • Exceptional items incl. ensuring Disaster Fund has $150m for next biennium, $120m for victim assistance funding, $5m for grants to combat elder abuse, and $150m for the Texas Enterprise Fund
  • Also hope to discuss riders as we move though session
  • Nichols – Eco dev used to work in conjunction with Chapter 313, is the Gov.’s Office encouraging members to come up with something different?
    • Takes a whole package of things to close big deals, certainly there are issues to address if anything is going to continue; look forward to working with locals
  • Nichols – Those involved with businesses are aware of importance of Chapter 313; aware of abuses, but think we should do something & would be helpful if Gov’s Office was supportive
  • Hinojosa – On border security prosecution, challenge has been finding proper appointment of attorneys and shortage of prosecutors; has Gov.’s Office discussed this and how to bridge funding gap?
    • Base bill has $100m for local grants
  • Hinojosa – Set aside $1m for firefighters, need increased funding for fire departments along the border; need to have a better discussion on metrics on border security spending and how effective some of the spending has been
  • Perry – on VOCA, ARPA had a deadline for obligated and expended funds, are we at risk of claw back?
    • 2024 is the end date for obligation; as for $160m for VOCA from SB 8, will figure out a way to spend that
    • Requesting $120m GR because we felt this would be a safer use of funds
  • Perry – First in, first out are ARPA dollars?
    • Correct
  • Bettencourt – Commends policy decision to transport migrants to other cities, can you give a breakdown?
    • Paid out nearly $40m for this effort, 5 different cities we’ve been transporting folks to
  • Bettencourt – Has focused Americans on the problems of border states & highlighted hypocrisy of Biden Administration; important to have a border with controls, federal government has defaulted on responsibility
    • Gov. would share these views, appreciate help during interim and in the base bill
  • Huffman – On the wall, funding flows through TFC? Give an overview on how money has been spent and how it goes to the TFC
    • TFC is out finding easements and signing contracts, doing day-to-day on building the wall
    • TFC has an MOU with the Gov’s Office for funding, TFC draws funds down as needed
    • Have paid out $163m to date for work, panels, etc.
  • Huffman – And this is from the initial $1b from the 87th Second Special?
    • Yes
  • Huffman – Do they have commitments moving forward for the $1b?
    • Yes; TFC can speak more to this, if legislature allows they can spend the $950m and ready to proceed with further investments
  • Huffman – Have made clear that state will continue funding wall, federal gov has not taken the issue seriously
  • Huffman – On the Anti-Gang Center, money was put in at the end of last session; big expenditures on urban side for surveillance tools
    • Aimee Snoddy, Office of the Governor – $180m was used for urban areas, regular appropriation went to the rural centers
  • Huffman – Any way to measure success in that?
    • Have a quarterly report, tracking arre4sts, intelligence referrals, etc.
  • Huffman – Asks for information to be sent to see if it is something legislature wants to continue
  • Zaffirini – Has there been exploration on using a virtual or smart wall?
    • Hicks – Have not done a study as it is being built currently; some information suggests it allows for less manpower to be involved
    • For the physical wall, part of focus is on right technology
  • Zaffirini – Border Centers wrote an op ed supporting virtual wall, would hope you would consider those
    • Yes, Gov. Abbott announced bringing in Michael Banks who brings that perspective
  • Zaffirini – How are the locals being brought into the process?
    • TFC could better speak to this, Mr. Banks has meetings with local groups next week
    • Gov’s Office has met often with border sheriffs
  • Zaffirini – What metrics is the Gov’s Office using to track efficacy of border policy versus border wall?
    • Don’t have a comparison, effectiveness shown in fentanyl seizures, arrests; don’t know how to put dollar values on this
  • Zaffirini – Glad to see exceptional item for prevention of elder abuse
    • Meant to fill in gaps to ensure local govs have ability to go after these crimes
  • Zaffirini – For every dollar we invest at flagship universities for research there is a multiplier of $18 & that investments shouldn’t cost the bill, what is your opinion on this?
    • Important investments that pay off in the long run, but will stay out of budgetary concerns
  • Flores – On the border wall, being built on public or state land, private land owners who have contracted, and not using eminent domain?
    • Correct
    • Not all state land, some in Big Bend that isn’t used that way, but started with GLO
  • Flores – Inland counties are being affected significantly, criteria for funding?
    • Snoddy – Criteria is you have to be in an emergency declaration county, funding counties that are 2-4 counties deep from the border, a couple that are in North Texas
  • Flores – Sonora County hospital resources are also being used, local citizens have to absorb the cost; any provision for dealing with these collateral effects?
    • Funding right now is focused on LEOs, courts, jail operations, human remains; can look at this
  • Flores – Something we should consider?
    • Hicks – Real cost, have argued that locals are dealing with UC under 1115, this could be similar; would be glad to work on this, just hasn’t been the focus
  • Hall – Border issue is one of the most frustrating things we have to face, misunderstood by many; commends Gov. Abbott for doing something, better than ignoring it; hoping we can take next major step to have an Interstate Compact on Border Security, would need Congressional approval which may be difficult
  • Kolkhorst – Some merit to consider stress on rural health care; have heard from Kenny County that they are overrun from foot traffic; issue is affecting more than border counties
  • Kolkhorst – Starting in 2015 and look at cumulative total spent on border security and against trafficking, billions of dollars; absolutely duty of federal government to address
  • Campbell – Happy to carry $180m for Gov’s funds for travel & tourism, this session would like to bring cap up to $250k

 

Public Testimony

Tanya Ahlschwede, Border Prosecution Unit

  • Provides overview of BPU, funded by Gov’s Office, have helped get criminal trespass prosecutions going
  • Huffman – Do you have what you need? Have seen you in action, very impressive
    • Always in need of funding, have problems just like other prosecutor’s offices
  • Huffman – How many openings do you have?
    • Currently 11
    • Have been working with counties to access Operation Lone Star grants
  • Huffman – Want to make sure you have the resources you need; do you think if you could pay more it would be easier to attract attorneys?
    • Difficult situation, difficult place to live; paying more does help
  • Hinojosa – Many DAs in my district are understaffed due to pay, more demand now for other offices to help out with prosecuting border crimes
    • BPU can fund several positions; increased prosecutions, grand jury proceedings, etc. mean there is a need for more resources to handle
  • Perry – Highlights difficulty of funding needed programs with rural taxbase; session will produce something good for your area & rural support
  • Flores – Would a racketeering, RICO Act like policy, help you to prosecute and go after the assets of traffickers?
    • Yes, smuggling, possession with intent to distribute, etc. not an enumerated statute within current Organized Crime statute; can only go after enumerated offenses
  • Huffman – Have filed a bill for delivery of fentanyl and puts this into Organized Crime statute

 

Erika Boyd, Texas Travel Alliance

  • Supports economic development and tourism office, appreciates support of Trusteed Programs; supports raising $20k cap to $250k for business recovery

 

Chara McMichael, BCFS-HHS-HTI

  • Encourages fully funding or increasing exceptional item 2 related to the VOCA fund

 

Christina Green, Children’s Advocacy Centers of Texas

  • Provides overview of CACT, CACs funded through Art. II, SB 1 provides everything asked for
  • Supports exceptional item 2 related to VOCA fund
  • Huffman – No intent on cutting program, more a situation on figuring out how much federal funding is coming in
  • Kolkhorst – VOCA funding is a federal line of funding, when was it cut?
    • Federal fund started to decrease substantial from $6.5b in 2016 to $445m in 2018
    • Fed by criminal fines and penalties, large amount was due to Volkswagen settlement
    • Congress appropriates it to the states, TX gets second highest amount
    • Congress passed a VOCA fix in 2021 and it is working, COVID also slowed down court proceedings
  • Huffman – Just figuring out what is needed to backfill
    • CACs have been cut across the country, TX continues to prioritize the crime victim safety network

 

Rose Luna, Texas Association Against Sexual Assault

  • Provides overview of TAASA, appreciates Senate’s commitment to sexual assault programs
  • Requests support of exceptional item 2 on VOCA funds

 

Secretary of State LBB Presentation

  • Link to presentation
  • $73.6m in All Funds reduction, majority due to expiration of one-time GR funding, remaining reduction largely due to federal fund reduction
  • Increase in FTEs for Forensic Audit Division
  • Funding for voting machine replacement has been removed
  • Exceptional items detailed on Pg 6
  • Recommending funding at current levels for election audits, exceptional items incl. expanded audits, training, etc.
  • 13 exceptional items are not included in recommendations, agency made two adjustments to change item 1 to item 6 and remove fleet vehicle replacement item

 

Secretary of State Agency Presentation

Jane Nelson, Secretary of State

  • Provides overview of SOS operations, handles significant volumes of business transactions in addition to election issues
  • SOS facilities are in need of maintenance and renovation, if we ask others to come to state to do business, need to be ready

 

Joe Esparza, SOS Office

  • Gives overview of requested exceptional items; requesting 11 exceptional items totaling $55.2m, $22.1m to expand agency modernization project
  • Trying to conduct randomized audits every two years, need to significantly expand staff & resources of audits division to keep up with need
  • Item 3 allows agency to more efficiently manage funds following through SOS
  • Item 4 @$5.8m to increase staff to carry out voter registration maintenance
  • Perry – Lost $900k worth of interest on HAVA funding because rider wasn’t clear on what we needed to do? If there is a question on what a rider like this will do, stop us and make us understand what it will do
  • Bettencourt – Exceptional item on forensic audits is very important, Harris County is having a terrible time, audits are the way to solve this; supporting audit bill in the Senate
    • SOS Nelson – Important that people have confidence in the integrity of the election system; young people have lost confidence, goal as SOS is to restore confidence
  • Bettencourt – Confidence is not a partisan issue, can see SOS is taking that seriously
  • Bettencourt and Nelson discuss significant need for SOS Office modernization
  • Kolkhorst – Can you describe SOS role with foreign dignitaries?
    • Describes duties of Texas-Mexico advisory group, works to address issues with cross-border transport and commerce; legislature should sit in on these discussions
    • Many dignitaries seeking to do business with Texas
  • Kolkhorst – SOS has a lot of different duties, not just elections; SB 1111 last session relating to voter address confirmation; will also need risk-limiting audit programs and will be starting on rules soon
  • Kolkhorst – Didn’t anticipate issues with paper running out; what happens when you’re doing an audit and they can’t present the info requested? Does your office have enforcement tools?
    • Solution to paper issue will need to be legislative, unacceptable
  • Kolkhorst – part of this is a funding issue, did spend $38.3m to help counties
    • Esparza, SOS Office – We know the counties that have issues, SOS is communicating with election administrators
    • Usually get notices from public and election administrators about what’s going on
    • Lack of paper is logistical, counties have resources, SOS tries to train election officials
  • Kolkhorst – Not sure who is in charge when these problems occur and what are the penalties? With no penalties the issues will just repeat themselves authored SB 598, paper trail is important with a recount
    • SOS training needs to be taken seriously & needs to be exercised
    • Election day issues are addressed through Election Division hotline
  • Kolkhorst – Frustration is that time is ticking on election day & you run out of time; will work with SOS to restore trust that polling locations will be open, machines will work, and they have supplies necessary
  • Hinojosa – Many times people aren’t aware of the SOS’ other duties, like dealing with foreign governments; highlights trade opportunity & importance with Mexico, needs support from state & federal government
    • Nelson – An even greater responsibility since trade with China diminished; have coordinated with 4 border Mexican states, important to develop these trading opportunities & for the legislature to participate
  • Zaffirini – How many FTEs are devoted to international trade with Mexico?
    • Esparza, SOS Office – One FTE allocated to trade with Mexico, also have a protocol officer that works directly with
  • Zaffirini – SOS is also the chief protocol officer for the state, seems to me like you should have more
  • Paxton – Asks about registration updates and registration card mailing
    • Keith Ingram, SOS Office – Election Division is responsible for this, expect to do a good job on list maintenance this year
  • Paxton – Why would someone who lives in another state, with license in another state, registration in another state, etc., get a registration card at an old address
    • Unless a voter tells us they’ve moved, we don’t know it; are a member of the Electronic Registration Center which involves some states and could get notified that way
  • Hall – US has a very low turnout, many don’t think their vote counts, many confused by process and procedure for different elections; would like to work to simplify the election and voting process
    • Nelson – Honest and accurate election system will get people to the polls
  • Hall – Simpler the system, the less it confuses people and higher confidence will be

 

Texas Facilities Commission LBB Presentation

  • Link to presentation
  • $617.5m in All Funds reduction
  • Item B reflects initial interagency contract for border wall, does not reflect full amount for the project
  • Agency requested& received $312m increase for construction at the Capitol Complex; made an additional $249m recently & not included in recommendations
  • Exceptional items include new capital budget item for maintenance, new strategic planning direction
  • 3 riders deleted as they are no longer needed
  • Pg 8 highlights requests not included in the recommendations

 

Revenue Bonds for Lease Payments LBB Presentation

  • Link to presentation
  • $9.7m GR increase
  • Majority of request goes to Art I because payments will flow through TFC this biennium due to new building construction; some part of funds goes through Art II
  • Pg 4 details amounts per Article

 

Texas Facilities Commission Agency Presentation

Mike Novak, TFC

  • Capitol Mall construction project is on budget, Phase I of North Austin complex was delivered on time and in budget; Phase II in planning stages
  • Flexible office space is set to be constructed in Pflugerville, completion and occupancy slated for 2025
  • On track with Permian Basin Behavioral Health Center
  • TFC requested 5 exceptional items, determined we could eliminate 1 after SB 1, but must add a new one to restore base level funding by $30.2m GR; reduction would significantly impact ability of TFC to perform core functions
  • Phase II cost escalation of $258.9m due to strain on skilled labor and material costs
  • $526.3m for retirement & sale of state buildings
  • Also requesting new riders related to construction, unexpended balance, and transfer of authority
  • Zaffirini – To what extent has TFC been involved in selecting sites and designing the border wall
    • Start by identifying most efficient alignment, use this to identify property owners, management team will contact property owners
  • Zaffirini – How do you determine cost?
    • Have appraisals done, negotiating process with each landowner; every site is unique
  • Zaffirini – Other agencies establishing departments in districts have typically contacted legislators, but don’t recall being contacted by TFC
    • Community relations was not in the very defined scope of the Gov’s letter
  • Zaffirini – Do you deal with legislators on site selection and cost?
    • Open to providing briefings
  • Zaffirini – Repairs are worked in, don’t recall this with other constructions, what repairs will be needed?
    • Wall itself is sturdy, items like access road, electronics, etc. require maintenance and repair
  • Zaffirini – Have you analyzed cost of repair of other border walls?
    • Yes, works into the budget
  • Zaffirini – Other border walls have had maintenance costs like ladders, tunnels, damage
    • Yes, part of the request from TFC; money is a placeholder, TFC is likely not the most efficient agency to handle the maintenance, TxDOT, others, may already have equipment
  • Zaffirini – Budget/costs open to PIR?
    • Some are, some are not, a lot of security issues; can be a challenge as if you’re a landowner you may not want it advertised that you’re doing an easement with TFC
  • Zaffirini – Budget request includes cost of buying the land?
    • No, only have a $36m placeholder for maintenance; other funding flowing through Gov’s Office
  • Campbell – TFC executed an interagency contract for construction of border security infrastructure?
    • This is the wall
  • Campbell – 44 and 47 miles of barrier? Not the fence?
    • Wall
  • Campbell – Have constructed 1.7 miles, completion of 8 miles expected in 2023?
    • Will have panels up; very confident that in next 6-8 weeks that panels will go up in 3 or 4 more locations
  • Campbell – Good to hear, took a while to get 1.7 miles up; 44 to 47 miles of barrier is what?
    • Additional wall
  • Campbell – Going up quicker than we thought
  • Perry – How many phases are on the Capitol Complex?
    • Phase I was just completed, Phase II is beginning design
  • Perry – How many phases are there, total cost? Pay as you go? Bonding?
    • John Raff, TFC – With exceptional item, Phase II budgeted at $711m
    • Original $313m funded through revenue bonds, rest of it is to legislature’s determination
  • Perry – $1.2b to get complex done, Phase III yet to be determined?
    • Yes
  • Perry – Probably going to do it right?
    • Depends on how we land with hybrid work models
  • Perry – How many FTEs will ultimately be transferred? How many agencies?
    • Working with 5 right now, will be other put in there as well
  • Perry – How much is your capacity? Need info on what will be moved
  • Perry – Do vendors get to return and claim for increased costs?
    • These are CMAR constructs, incl. cost of work, general conditions, and construction fee
    • Get cost of work estimates that ride along with the design and estimates
  • Perry – By sheer luck of when projects started, we got tagged on inflationary costs?
    • Correct
  • Perry – Retirement & sale of state buildings, we have flexibility on when to do this, would it not make sense to wait until inflationary pressure is off?
    • Construction industry has proven less flexible going downward, may see some abatement in cost of construction but seems to ride along and rise as time goes by
  • Perry – Steel, housing, etc. can’t stay where it is, building today in Lubbock you are 30% higher; possibility for cost savings on not jumping into this too quick
  • Nichols – In our last budget cycle we had agency requests to reconstruct buildings and perform maintenance; would encourage TFC to include those constructions into the cost of the building
    • Agree that we should try and aggregate, came to legislature last session with a combined item
  • Nichols – But it came after the fact, requesting this on the front end
    • Included in the request
  • Hinojosa – You testified before the Border Security Committee, what was the cost to build 1 mile of the wall?
    • Novak – Range of $20-$25m per mile, depends on the terrain
  • Hinojosa – Getting more of a sense that this is a hodge podge building of walls rather than an effort to direct flow of immigrants
    • Joined at hip with DPS, will not build unless DPS says it is a priority area, sometimes priorities will shift for DPS as well
  • Hinojosa – Have heard that it could cost up to $50m per mile depending on the region
    • In TFC studies on the federal wall it had this range; based on our experience so far $20-$25m is the correct range
  • Hinojosa – Would imagine costs continue to increase due to inflationary pressure and cost of labor
    • TFC is taking full advantage of trying to stockpile resources at cheaper prices
  • Hinojosa – Concerned that costs will continue to increase, maintenance will continue to increase to the point that it will be unsustainable
    • Yes, whatever built will need to be maintained
  • Hinojosa – And that cost will not decrease
  • Kolkhorst – Does TFC have info on state-owned and leased space that isn’t currently occupied due to telework?
    • Have this for TFC, but don’t have this for other agencies; most other agencies have their own commission and services
  • Kolkhorst – Could be cost savings if we knew how many buildings aren’t being utilized and consolidate leases or to state-owned properties
    • Working with agencies on square footage needs, we are seeing some trends were some agencies are using less space; not ignoring this
  • Kolkhorst – Not accusing you, just think there is opportunity to plan space out for the future as leases come up
    • Raff – Absolutely is, also opportunities to change expectations to accommodate telework; may be able to shrink space down, but also need to redesign existing space, e.g. for people to come in and collaborate
  • Perry – Probably need to figure out how to value loss of production; if this is where we’re going rural areas can do this, but race to mediocrity because this doesn’t work long term

 

Public Finance Authority LBB Presentation

  • Link to presentation
  • $3.8m in All Funds, $.2m increase
  • Removal of $.1m in one-time for CAPPS payroll deployment
  • Pg 5 rider highlights, Rider 10 has been added, allowed $25k collection of appropriated receipts related to TWIA
  • Rider 9 deleted as it is duplicative of rider from Trusteed Programs
  • Exceptional items @$9.1m

 

Public Finance Authority – General Obligation (GO) Bond Debt Service LBB Presentation

  • Link to presentation
  • $719m All Funds, incl. GR increase related to CPRIT and decrease from Tobacco Settlement Funds
  • TPFA GO Bond Debt currently sits at $2.6b
  • Rider deleted related to Tobacco Settlement Funds as they’ve been exhausted

 

Public Finance Authority Agency Presentation

Larry Holt, TPFA

  • Provides overview of TPFA operations, issues debt based on legislative authorization, administer master lease purchase program, and payment of bond debt
  • Have withdrawn LAR request for 3% merit pool & replaced with request to account for FY23 market salary adjustments
  • Exceptional items requests reflect TPFA Board’s primary sources of concern

 

Bond Review Board LBB Presentation

  • Link to presentation
  • $2m in GR, $.2m increase
  • 1 new rider for unexpended balance carryover
  • Exceptional items incl. funding for critical positions and website upgrades, @$705k

 

Bond Review Board Agency Presentation

Robb Latsha, BRB

  • Provides overview of BRB operations
  • Appreciates funding in SB 1, dropped two exceptional items as a result
  • Keeping exceptional items for critical staff position support and website development; hoping to create growth path and help retain critical staff

 

Department of Information Resources LBB Presentation

  • Link to presentation
  • $1.28b in All Funds, decrease from last biennium due to decrease in federal funds through Technology Improvement & Modernization Funds
  • $46m increase in vendor payments across agency services, increase in cybersecurity services, increases for exceptional items, decrease from federal ARPA funds going away
  • Exceptional items detailed on Pg 10
  • Riders on server consolidation status and staff telecoms survey deleted due to completion & lack of use

 

Department of Information Resources Agency Presentation

Amanda Crawford, DIR

  • Provides overview of DIR operations; purchases through cooperative contracts exceed $3b in FY2022, savings of $1.4b; highlights DIR’s GR transfers, DIR responsible for significant state savings and maintains good work culture that supports retaining employees
  • Exceptional items incl. legacy modernization and cybersecurity improvements
  • Kolkhorst – Congratulates DIR on retention of staff; attribute this to workplace culture?
    • Won’t be able to compete with private sector in salaries, but large part of retention is the work environment
  • Kolkhorst – How do you handle the phishing, cyber threats, etc. with so many state agencies?
    • Challenge and constant effort; need to look for specific behaviors all the time
    • Need to mandate cybersecurity training for all employees, human element is always the weakest link
  • Paxton – Weakest link is often the human element, but also in a network of agencies it may be the small agency without expertise in house; can DIR provide support for these agencies that protects the entire network?
    • Certainly, somewhat limited on what we can do from an infrastructure standpoint if an agency is not in our network
  • Paxton – Certain things where we benefit from the expertise DIR can provide
    • Definitely an area where we are stronger together, about info sharing and providing tools

 

State Office of Risk Management LBB Presentation

  • Link to presentation
  • $102m in All Funds, comprised entirely of Other Funds with increase due to salary base increase from SB 1
  • Highlights unknown extent of COVID on worker’s comp claims; these claims are the most significant externality impacting payments

 

State Office of Risk Management Agency Presentation

Stephen Vollbrecht, SORM

  • Not a GR funded agency
  • Agency has asked that Executive Director position be moved to group 5, with salary limit at group 4
  • Not GR funded, but do have some ARPA requests going through biennial operating plan; will be handled in other bills aside from SB 1
  • Nichols – What is Origami Risk?
    • Risk management info system, procured back in 2001, designed to ascertain what state owned & where it was located

 

Texas Ethics Commission LBB Presentation

  • Link to presentation
  • $254k increase for 2024-25 biennium, sourced from additional GR to complete transition of filing to cloud and funding for salary increases
  • Reduction of FTE cap in SB 1, TEC has been below this cap for many years
  • $882k remains in pre-purchased services for the filing system with existing contract, TEC put this towards purchase of cloud services, SB 1 includes rider requiring TEC to report future vendor transactions and consult with DIR on potential move to state datacenter
  • $3.2m exceptional in item requests, item 8 covers lumpsum and retirement payments
  • Since introduction of LAR, item 1 related to judgments and settlements has been withdrawn

 

Texas Ethics Commission Agency Presentation

J.R. Johnson, TEC

  • TEC’s workload has grown dramatically over last two years, need to be able to hire and retain talented employees; starts with TEC General Counsel, requesting funding and authorization for that position
  • Also requesting 8 FTEs to help manage growth

 

Public Testimony

Richard Victrin, Audits in the Public Interest

  • Against continued funding of Major Events Program, appreciates Sen. Hall’s bill striking the program & Sen. Kolkhorst’s actions on 313s; expenses are not worth it, not necessary to draw major events to the state
  • Programs are not audited and compliance checks are not done
  • Sen. Watson’s SB 1515 added Formula 1 and Special Events Fund to allow for multi-year awards, led to stadium finance mechanism for Circuit of the Americas; $200m has gone to this venue

 

Rahul Srinivasan, Texas2036

  • Focused on leveraging record fund balance to make generational investments while maintaining fiscal sustainability
  • Should fund DIR requests related to cybersecurity and legacy systems; legislature depends on PCLS reports to determine what IT funding is needed
  • While implementation of previous IT funding was not perfect, with tweaks, full interim, and full set of 5-year agency plans will allow agencies to plan for IT funding