Legislative Appropriations Request FY 2018-2019

113 Pages·2016·2.93 MB·English

Legislative Appropriations
Request for Fiscal Years
2018 and 2019

Submitted to the
Office of the Governor, Budget Division,
and the Legislative Budget Board

by

Texas Ethics Commission

August 5, 2016
Table of Contents

Administrator’s Statement

Organizational Chart

Certificate of Dual Submissions

Budget Overview

Summary of Base Request by Strategy 2.A.

Summary of Base Request by Method of Finance 2.B.

Summary of Base Request by Object of Expense 2.C.

Summary of Base Request by Objective Outcomes 2.D.

Summary of Exceptional Items Request 2.E.

Summary of Total Request by Strategy 2.F.

Summary of Total Request by Objective Outcomes 2.G.

Strategy Request 3.A.

Program –Level Request Schedule 3.A.1

Rider Revisions and Additions Request 3.B.

Requests for Exceptional Items 4.A

Exceptional Item Strategy Allocation Schedule 4.B

Exceptional 4.C

Capital Budget Project Schedule 5.A.

Capital Budget Project Information 5.B.
Capital Budget Allocation to Strategies (Baseline) 5.C.

Capital Budget Operating and Maintenance Expenses 5.D.

Capital Budget Project – OOE and MOF Detail by Strategy 5.E.

Capital Budget Project Schedule – Exceptional

Historically Underutilized Business Supporting Schedule 6.A.

Estimated Revenue Collections Supporting Schedule 6.E.

10 Percent Biennial Base Reduction Options 6.I.

Indirect Administrative and Support Costs 7.A.

Direct Administrative and Support Costs 7.B.

Note: The following sections or supporting schedules did not apply to this submission:

Rider Appropriations and Unexpended Balances Request (3.C.)
Sub-strategy Request (3.D.)
Current Biennium One-Time Expenditure Schedule (6.B.)
Federal Funds Supporting Schedule (6.C.)
Federal Funds Tracking Schedule (6.D.)
Advisory Committee Supporting Schedule (6.F.)
Homeland Security Funding Schedule (6.G.)
Estimated Total of All Funds Outside the GAA Bill Pattern (6.H.)
Budgetary Impacts Related to Federal Health Care Reform Schedule (6.J.)
Budgetary Impacts Related to Budget Control Act – Sequestration (6.K.)
Summary of Requests for Capital Project Financing (Part 8)
Capital Budget Operating and Maintenance Expenses 5.D.

Capital Budget Project – OOE and MOF Detail by Strategy 5.E.

Capital Budget Project Schedule – Exceptional

Historically Underutilized Business Supporting Schedule 6.A.

Estimated Revenue Collections Supporting Schedule 6.E.

10 Percent Biennial Base Reduction Options 6.I.

Indirect Administrative and Support Costs 7.A.

Direct Administrative and Support Costs 7.B.

Note: The following sections or supporting schedules did not apply to this submission:

Rider Appropriations and Unexpended Balances Request (3.C.)
Sub-strategy Request (3.D.)
Current Biennium One-Time Expenditure Schedule (6.B.)
Federal Funds Supporting Schedule (6.C.)
Federal Funds Tracking Schedule (6.D.)
Advisory Committee Supporting Schedule (6.F.)
Homeland Security Funding Schedule (6.G.)
Estimated Total of All Funds Outside the GAA Bill Pattern (6.H.)
Budgetary Impacts Related to Federal Health Care Reform Schedule (6.J.)
Budgetary Impacts Related to Budget Control Act – Sequestration (6.K.)
Summary of Requests for Capital Project Financing (Part 8)
ADMINISTRATOR’S STATEMENT
85th Regular Session, Agency Submission, Version 1

TEXAS ETHICS COMMISSION

The Texas Ethics Commission (Commission) continues to work hard in the administration of and the fair, consistent, and tough
enforcement of campaign finance, lobby, and other ethics laws. The Commission was created effective January 1, 1992, by a voter-
approved constitutional amendment and is comprised of eight Commissioners, four of which are appointed by the Governor, two by
the Lieutenant Governor, and two by the Speaker of the House of Representatives. Members of the Texas Senate and the Texas House
of Representatives who represent each political party required by law to hold a primary submit lists of nominees to the appropriate
state official for appointment. The current Commissioners are as follows:

Board Member Hometown
Chase Untermeyer, Chair Houston
Tom Harrison, Vice Chair Austin
Hugh C. Akin Dallas
Jim Clancy Portland
Wilhelmina Delco Austin
Paul W. Hobby Houston
Bob Long Bastrop
Tom Ramsay Mount Vernon

The Commission has both constitutional and statutory duties. As required by the Texas Constitution, the Commission sets the per
diem for members of the legislature and the lieutenant governor. Statutory duties of the Commission are set out in Chapter 571 of the
Government Code. The Commission administers and enforces the following laws: 1) Title 15 of the Election Code, concerning
political contributions and expenditures, and political advertising; 2) Chapter 302 of the Government Code, concerning the election of
the Speaker of the Texas House of Representatives; 3) Chapter 303 of the Government Code, concerning the governor for a day and
speaker's reunion day ceremonies; 4) Chapter 305 of the Government Code, concerning lobbyist registration, reports, and activities; 5)
Chapter 572 of the Government Code, concerning personal financial disclosure of state officers and conduct of state officers and
employees; 6) Chapter 2004 of the Government Code, concerning representation before state agencies; 7) Chapter 159 of the Local
Government Code, concerning judges of statutory county courts or statutory probate courts who elect to file a financial statement with
the Commission; 8) Section 2152.064 of the Government Code concerning conflict of interest in certain transactions involving the
Texas Facilities Commission; and 9) Section 2155.003 of the Government Code concerning conflict of interest involving the Office of
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the Texas Comptroller of Public Accounts. Additionally, the Commission is authorized to issue advisory opinions relating to those
laws and Chapters 36 and 39 of the Penal Code. Furthermore, the Commission is authorized to adopt rules relating to the laws it
administers and enforces and Section 2252.908 of the Government Code, concerning the requirement that a business entity disclose its
interested parties at the time the business entity submits certain contracts to a governmental body. The Commission is not authorized
to conduct background checks and does not conduct background checks.

Significant Changes in Provisions of Service

With the funding appropriated by the legislature, the Texas Ethics Commission released a new electronic filing system for campaign
finance, lobby, and personal financial statements, which is a project launched prior to the start of the 84th Legislature. The campaign
finance filing application was released in April 2015, and the lobby and personal financial statement applications were released in
September 2015. These new filing applications are web-based are accessible to users of personal computers, MAC computers, and
modern mobile devices and are accessible from any place that has Internet access. The campaign finance application may be used by
all filers regardless of whether they file with the Commission or with a local filing authority.

Additionally, the 84th Legislature charged the Commission with the implementation of House Bill 1295, a transparency bill, which
prohibits a governmental entity or state agency from entering into certain contracts unless the business entity submits a disclosure of
interested parties form at the time the business entity submits the contract to the governmental body. The new law applies to contracts
entered into on or after January 1, 2016. As required, the Commission adopted rules and a form to be used by business entities to
disclose interested parties. Additionally, the Commission created an electronic filing application and requires that it be used to file the
disclosure of interested parties form. To date, approximately 23,618 persons have used the filing application to file or acknowledge
receipt of disclosure forms, and it is estimated that approximately 85,200 of those forms will be filed yearly. It is also estimated that
the Commission will receive annually approximately 8,760 calls related to House Bill 1295.

Transition to the Statewide ERP System, Centralized Accounting and Payroll/Personnel System (CAPPS)

The Comptroller has scheduled the Texas Ethics Commission to begin its financial implementation of the statewide system on
September 1, 2018, which would carry over for complete transition in FY 2020. After the financial implementation has been
completed, the Commission will implement the CAPPS for HR/Payroll in a future biennium.

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Significant Externalities

The Texas Ethics Commission is currently a party to numerous lawsuits filed in state and federal court involving challenges to the
constitutionality of the laws passed by the Legislature. The litigation is expected to continue into and beyond the 85th Legislative
Session.

Significant Changes in Policy

The Texas Ethics Commission has not had any significant changes in policy.

Exempt Positions

The Texas Ethics Commission is not requesting a change in its exempt positions.

Budget Request

The Texas Ethics Commission’s budget request was developed in accordance with the instructions provided by the Legislative Budget
Board and the Governor’s Budget Office Division. The Commission’s approved 2018-19 GR/GR-D baseline limit (96% of total) is
$5,852,335. The Commission is requesting funding for the following items above the approved baseline budget. The stated amounts
are per fiscal year.

$75,000 Vendor support for the Texas Ethics Commission’s new electronic filing system that includes filing applications for
campaign finance, lobby, personal financial statements, and certificate of interested party disclosures and the
Commission’s management system for the applications. The Commission plans to extend the current maintenance
contract with the vendor that designed and developed the new electronic filing system to make adjustments to the filing
applications, to continue to work with the Commission’s IT programming staff to provide hands-on learning of the
code base of the new system so that the Commission’s staff can modify and maintain the code base in-house, and
resolve and fix source code defects found in the code base. The architecture of the new electronic filing system is
complex. The source code base consists of over 785,000 lines of code that run in a virtualized Red Hat JBOSS
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environment. Due to the complexity of the design of the software and the unexpected need to quickly develop, deploy,
and assist filers with a new filing application to implement House Bill 1295 passed by the 84th Legislature, the
Commission’s IT programming staff has not had sufficient time to learn the code structure of the new system.

$58,800 Increase the Texas Ethics Commission’s Internet network bandwidth to 250 megabits per second (Mbps) to increase
the amount of Commission filers’ data that can move over the network successfully at one time. Most campaign
finance reports filed with the Commission are filed electronically. All personal financial statements, lobby reports, and
disclosure of interested party reports filed with the Commission are filed electronically. The Commission’s current
Internet network bandwidth provided by DIR is not adequate to handle all the network traffic generated by these filers
during heavy filing periods. Raising the bandwidth limit from the current 100 Mbps to 250 Mbps will increase the
amount DIR charges the Commission to $5,000/month, or $60,000 annually. Prior to June, 2015, the Commission was
charged $100/month ($1,200/year) for 100 Mbps Internet bandwidth. The Commission is requesting an additional
$58,800 annually to cover the DIR internet bandwidth expenses.

$150,000 Increase in funding for legal services costs due to the Office of the Attorney General declining to represent the Texas
Ethics Commission in litigation relating to certain challenges to the constitutionality of laws passed by the legislature.
The Commission is currently a party to numerous lawsuits in both state and federal court, many of which involve
challenges to the constitutionality of Texas laws. Litigation of this nature is expected to continue beyond the 85th
Legislative Session. The Commission does not know whether future requests for representation will be declined by the
Office of the Attorney General and wants to be financially prepared to retain outside counsel to defend the
constitutionality of laws passed by the legislature.

$65,000 A system support analyst to respond to telephone calls related to House Bill 1295 passed by the 84th Legislature, which
increased the number of calls received by the Texas Ethics Commission by approximately 730 monthly, which totals
8,760 yearly.

$40,000 An administrative assistant to assist with the implementation of the state mandated transition to the CAPPS system. The
Texas Ethics Commission does not have the additional resources to handle the CAPPS financial conversion while still
continuing to perform the day-to-day functions of the agency. The Commission is scheduled to begin its CAPPS-
Financial implementation on September 1, 2018, which would carry over for complete transition in FY 2020. After the
Financial implementation has been completed, the Commission will begin the CAPPS for HR/Payroll in a future
biennium. This FTE will make it possible for the Commission to continue with its day-to-day activities while the
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current staff attends meetings and works closely with the Comptroller's conversion team in setting up the Commission
in CAPPS.

$25,000 To provide additional training to better educate the general public and all the state and local filers on laws administered
and enforced by the Texas Ethics Commission.

$58,000 A staff services officer who would be dedicated to educational and outreach efforts, including ethics symposiums,
online training, and training webinars. This FTE would be in charge of securing facilities and audio/visual needs for
training; coordinating postings for events on the Texas Ethics Commission's website; sending and responding to emails
to prospective attendees regarding events; registration to events; submitting applications for continuing education credit
for the attendees; editing, printing and packaging handouts for the events; handling all logistics at the facility before
and during the training; and monitoring costs. The Commission would like to increase the number of all-day training
symposiums throughout the state from two to four. Additionally, the Commission would like to hold multiple half-day
training sessions specific to the type of filer throughout the state. The Commission does not have the resources
necessary to handle the planning and coordination that is required to successfully deliver this number of training events
throughout the state.

$75,000 An attorney to oversee facial compliance reviews, work on sworn complaints filed with the Texas Ethics Commission,
and participate in ethics training throughout the state. With funding appropriated by the 84th Legislature, the
Commission hired an auditor who annually conducts approximately 200 facial compliance reviews of campaign
finance, lobby, and personal financial statement reports that are filed with the agency. Currently, one attorney in the
enforcement division oversees and assists with these reviews. This same attorney also works on sworn complaints filed
with the Commission, provides legal guidance by telephone, and assists with training. If the Commission’s request for
additional auditors is granted, a new attorney would be needed to oversee the facial compliance reviews to ensure that
they are properly conducted.

$ 110,000 Two FTEs for auditors to enable the Texas Ethics Commission to increase the number of facial compliance reviews
conducted on reports filed with the Commission. The Commission currently has one auditor funded by the 84th
legislature. Annually, this auditor conducts 200 reviews of campaign finance, lobby, and personal financial statement
reports filed by Commission’s filers. The auditor also assists in complaints involving complex financial analysis. Two
additional auditors will permit the Commission to annually conduct a review of more of its approximately 8,960 filers.
Also, the new auditors would conduct complete audits that may arise from the initial reviews. An increase in facial
compliance reviews would likely result in an increase in compliance with the statutes enforced by the Commission.
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4 Percent Reduction Strategy

To achieve the $243,847 reduction required in the Policy Letter that limits agencies’ baseline requests to 96 percent of their approved
2016-17 biennial General Revenue Funds and General Revenue-Dedicated Funds expenditure, the Texas Ethics Commission took into
account areas in which services could best be absorbed by remaining staff and areas in which reduction would not substantially reduce
service to the public. Accordingly, the Commission will eliminate one FTE from the Disclosure Filing Division for a $64,000
reduction. This FTE’s responsibilities include scanning paper reports and other paper filings, and assisting with filing those
documents in corresponding folders. Since the new law requiring personal financial statements to be filed electronically went into
effect in September 2015, most reports filed with the Commission are required to be filed electronically resulting in a reduction in
documents required to be scanned and filed. Also, the Commission will reduce $150,000 from Indirect Administration, Central
Administration, $22,000 from Enforcement and Legal Guidance and Opinions travel, and $7,847 from Legal Guidance and Opinions
training. These reductions will not significantly impact the Commission’s performance.

10 Percent Reduction Strategy

To achieve the $585,233 General Revenue Funds and General Revenue-Dedicated reduction, the Texas Ethics Commission would
eliminate one attorney from Legal Guidance and Opinions ($120,000 reduction), eliminate one attorney from Enforcement ($102,000
reduction), discontinue Legal Guidance and Opinions training ($63,232), eliminate two programmer positions in the Indirect
Administration division ($210,000), and eliminate the investigator position in Enforcement ($90,000). The cuts necessary to achieve
the 10 percent reduction would significantly impact the Commission’s ability to carry out its core functions and would significantly
impact the level of service the Commission provides to persons subject to the laws under the Commission’s jurisdiction and the
public. In selecting the affected programs, the Commission took into account its limited operating (non-personnel related) budget and
the capital items that are critical to the operation of the electronic filing system, and determined achieving the required reduction
thresholds would require cutting FTEs.

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