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Chapter 1: Electronic Government
Create a Clearinghouse for Information and Technical Assistance on Electronic Reporting
Summary
Paper-based reporting requirements are labor intensive for the regulated community as well as state government, making the reporting process slow, costly, and prone to errors. Electronic filing would allow information to be entered only one time, with an immediate transfer from the business to the state. This process would significantly reduce the time and money needed to complete each transaction, while also reducing the chance of errors from repetitive data entry. The Program Management Office in the Department of Information Resources, proposed elsewhere in this report, should determine the costs and benefits of a statewide electronic reporting system.
Background
Government regulatory agencies require extensive paperwork from the companies they regulate. The information requested by these agencies is necessary for the government to maintain standards for everything from air quality to oil and gas drilling. However, these reports can require considerable time to fill out and entail huge personnel costs to the private sector.
For example, one regulated company’s Air Emission Inventory Report, which must be submitted to the Texas Natural Resource Conservation Commission (TNRCC), was 568 pages long. This report is updated manually by a consultant who sends it to TNRCC, where staff members enter the information into a computer system. Report updates require two months to prepare and cost the company $50,000.[1] Eight full-time employees at TNRCC update and maintain Air Emission Inventory Report information and monitor operations for 1,900 regulated companies.[2] Only about 100 of these companies submit their annual reports in an electronic format.[3]
In a recent survey of 33 Texas state agencies, 17 were found to require routine regulatory reports. Of these, only five can accept electronic filings. The remaining agencies cited the cost of putting forms online, the cost of software, concerns about electronic signatures, and a lack of in-house expertise as reasons for not using electronic filing.[4]
Agencies that offer electronic reporting, as well as the companies that use it, agree that it reduces costs and errors.
An award-winning example is the Texas Railroad Commission’s (RRC’s) Electronic Compliance and Approval Process (ECAP). ECAP is a paperless, online oil and gas well permitting system offered jointly by the commission and the US Department of Energy. The RRC received the National Association of State Information Resource Executive’s 2000 Recognition Award for Outstanding Achievement in Information Technology for the ECAP program.
In 1997, the oil and gas industry filed 15,000 drilling permits via ECAP, resulting in a savings to the permit applicant of $200 per drilling permit. ECAP is saving the industry millions of dollars annually as well, and has reduced the time needed to process the forms from four days to two.[5] One regulated company, Conoco, stated that it is able to save a total of $1,350 a month on permit filing because it does not have to spend the money for a consultant to guide the permit through RRC.[6]
Another example of electronic reporting is the Comptroller’s WebFile program, which allows business owners with no sales tax due to file sales tax returns (both long and short forms) via the Internet. Telefile allows businesses to do the same via telephone. About 45 percent of the zero-sales tax returns received by the Comptroller’s office are filed electronically.[7]
Another method of electronic filing is the Comptroller’s Electronic Tax Filing system, which enables approved taxpayers to use their personal computers and a modem to transmit tax data for the sales tax/direct pay, natural gas/crude oil production, international fuels tax agreement, and motor fuels taxes. This program also allows for payments via an electronic funds transfer system.[8]
Electronic reporting allows a company or agency to collect and submit information using computer files. It also allows data to move from the business or agency collecting the data into state and federal databases more rapidly than is possible through manual entry. It reduces data backlogs and helps ensure that the most recent data are available. It offers significant savings in resources devoted to information processing and storage. And, finally, it improves the quality of data since data entry errors are reduced.[9]
Defraying Costs
The price of electronic reporting projects can be shared between the regulating agency and the regulated community, since both benefit financially from the projects.
The Texas Commission on Law Enforcement Standards and Education (TCLEOSE) is a leader in electronic reporting. The TCLEOSE system allows online reporting, updates records automatically, and manipulates data brought into the agency. For instance, TCLEOSE receives information on licensing certification, training, and employment records and is able to pull information as needed from its reports, such as training roster reports, to verify required hours and status of employment. The system has operated for almost a year and a half and has approximately 270 out of 2,700 possible law enforcement and individual subscribers. The $1.5 million to $2 million system used no state funds for development and receives no state money for updates. Small agencies that use the system pay subscription fees of $125, while larger agencies pay up to $5,000 per year.[10]
In 1988, the Texas Chemical Council and Texas Air Control Board partnered with the Arlington-based company, PDC Corporation, to develop a software program for the Air Emission Inventory Report. Twenty-five companies funded the original Web-based software program now used by 450 companies. PDC Corporation works for industries and industry consortia and charges a $10,000 initial fee plus $3,250 per year. Customers receive a CD-ROM, user’s manual, one day of on-site training, unlimited telephone assistance, and new versions of the software as it is updated.[11]
Florida collects biennial hazardous waste report data electronically. In 1995, the system saved Florida an estimated $20,000 in data processing costs. Data quality improved so much that it could be submitted to the Environmental Protection Agency (EPA) two months ahead of schedule. Approximately 450 regulated facilities submit report data electronically to the Florida Department of Environmental Protection (FDEP). Previously, staff members spent three to six minutes per page visually checking the data for errors and entering it into the system. It would take a staff member an entire year to enter all the biennial reports into the computer system.[12] Two hundred of the department’s customers now submit data electronically. Florida has reduced its data entry personnel from two employees to one part-time employee. Twenty-six other states use the electronic system produced by FDEP.[13]
Another recommendation in this report would create a Program Management Office (PMO) in the Texas Department of Information Resources for purposes of coordinating a variety of cross-agency electronic government projects. This proposed office could offer the level of coordination necessary to achieve an effective statewide reporting clearinghouse.
Recommendation
State law should be amended to direct the Program Management Office (PMO), recommended elsewhere in this report, to serve as the state’s clearinghouse of information and technical assistance on electronic reporting and to implement electronic reporting projects.
The PMO should be funded to advise and consult with state agencies to assess the opportunities for electronic reporting (including leveraging resources such as equipment and system development), to identify the barriers or pitfalls to electronic reporting, and to coordinate needs assessments.
Under this recommendation, the PMO may:
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Survey agencies to identify electronic reporting efforts currently underway, common needs, and opportunities for standardizing reporting approaches.
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Track costs associated with electronic reporting.
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Identify reports that can be produced electronically.
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Develop and implement a plan to adopt electronic reporting in high-opportunity areas of state government.
Based on its experience in the 2002-03 biennium, the PMO should make recommendations to the 2003 Legislature on the future direction for state electronic reporting.
Fiscal Impact
Estimated costs for implementing electronic reporting in Texas assume that a $2 million appropriation for fiscal 2002 and 2003 is sufficient seed money. This includes salary and benefits for a PMO project manager at an approximate annual cost of $100,000.
Initially, the project manager would work on determining the costs and benefits of an electronic reporting system. The remainder of the funding for fiscal 2002 and 2003 could then be used for the design and implementation of the system. Estimated costs for fiscal 2004 through 2006 include the project manager salary and benefits only.
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Fiscal
Year
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Savings/(Cost) to the
General Revenue Fund
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Change in FTEs
|
|
2002
|
($1,000,000)
|
+1
|
|
2003
|
($1,000,000)
|
+1
|
|
2004
|
($100,000)
|
+1
|
|
2005
|
($100,000)
|
+1
|
|
2006
|
($100,000)
|
+1
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In the event the Legislature does not create the PMO, DIR could perform the work needed. To do this, DIR would require an additional FTE in fiscal 2002 through 2006 at an annual cost of $100,000 (salary and benefits) for a project manager.
Public/private partnerships, transaction fees or subscription fees could help offset part or all of the anticipated costs. The PMO should identify any of these potential savings to the 2003 Legislature.
Endnotes
[1] Telephone interview with William Rosenthal and Bruce Campbell, Lockheed Martin, Fort Worth, Texas, May 12, 2000.
[2] Telephone interview with Kathy Pendleton, Texas Natural Resource Conservation Commission, Austin, Texas, May 31, 2000.
[3] Memorandum from Richard Smith, Web/GIS Team supervisor, Texas Natural Resource Conservation Commission, September 27, 2000.
[4] Telephone interviews with personnel in 33 various Texas state agencies, October 5 and 6, 2000.
[5] Memorandum from Hope Morgan, director of Information Technology Services, Texas Railroad Commission, October 2, 2000; Texas Railroad Commission, “RRC Electronic Filing System Awarded National Honor For Achievement In Information Technology,” Austin, Texas, September 30, 2000 (http://www.rrc.state.tx.us/news-releases/2000/000930.html). (Internet document.); Texas Railroad Commission, “Electronic Compliance And Approval Process (ECAP),” Austin, Texas (http://www.rrc.state.tx.us/ecap/geninfo.html#scope). (Internet document.); Texas Railroad Commission, “Electronic Data Interchange: Frequently Asked Questions,” Austin, Texas (http://www.rrc.state.tx.us/edi/edifaq.html#What is EDI). (Internet document.); Texas Railroad Commission, “General Instructions,” Austin, Texas (http://efile.rrc.state.tx.us/); Texas Railroad Commission, “Electronic Filing,” Austin, Texas (http://www.rrc.state.tx.us/electronic_filing/electronic_filing.html). (Internet document.); and “Gas Pedaling: Electronic Compliance and Approval Process,” Governing (October 2000), p. 92.
[6] Telephone interview with Christina Gustartis, regulatory analyst, Conoco, Houston, Texas, September 18, 2000.
[7] Memoranda from Jena Thomas, Texas Comptroller of Public Accounts, September 14, 2000; and Art Earle, Texas Comptroller of Public Accounts, September 15, 2000.
[8] Texas Comptroller of Public Accounts, “Electronic Reporting,” (http://www.window.state.tx.us/taxinfo/ett/). (Internet document.)
[9] National Governors’ Association Center for Best Practices, “A State Guide for Electronic Reporting of Environmental Data,” (http://www.nga.org/NaturalRes/ERIC/Summary.asp). (Internet document.)
[10] Telephone interview with Edward Laine, chief, Professional Standards and Administrative Operations, Texas Commission on Law Enforcement Standards and Education, Austin, Texas, April 14, 2000 and Jeff Olbrich, deputy chief, Client Services and Field Operations, Texas Commission on Law Enforcement Standards and Education, Austin, Texas, December 4, 2000.
[11] Telephone interview with Jerry O’Brien, president, Process Data Control Corporation, Arlington, Texas, May 31, 2000.
[12] National Governors’ Association Center for Best Practices, “The Florida Electronic Reporting Program” (http://www.nga.org/NaturalRes/ERIC/FL.asp). (Internet document.)
[13] Telephone interview with Jack Griffith, Florida Department of Environmental Protection, Hazardous Waste Management Section, Tallahassee, Florida, October 4, 2000.
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