BILL ANALYSIS C.S.H.B. 3050 By: Junell 03-30-95 Committee Report (Substituted) BACKGROUND Historically, dedications of revenue for particular purposes have limited the Legislature's flexibility in appropriating funds based on budgetary need and in utilizing the balances for other governmental purposes. In response to these concerns, the 72nd Legislature enacted Section 403.094, Government Code, which consolidated funds in existence before August 31, 1993, and abolished dedications in existence prior to August 31, 1995, unless otherwise expressly exempted. In addition, Section 403.095, Government Code, provides that dedicated revenues that, at the end of a biennium, exceed the amount appropriated are available for general governmental purposes. This provision lists certain exceptions to this sweep of funds. PURPOSE HB 3050 exempts certain accounts and funds from the funds consolidation and funds sweep provisions of Sections 403.094 and 403.095 of the Government Code. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Recreates the listed funds and special accounts as special accounts in the general revenue fund; exempts those accounts from funds consolidation and funds sweep; and dedicates revenue to purposes designated by law. SECTION 2. Creates or re-creates the listed funds and special accounts as special accounts in the general revenue fund; exempts those accounts from funds dedication; and dedicates revenue to purposes designated by law. SECTION 3. Re-creates the state lease fund as a special account in the general revenue fund; exempts the state lease fund from funds consolidation; provides that the fund is to be used only for the purposes designated by law; and provides for the balances in excess of funds needed for debt service to be transferred to GR at the end of each biennium. SECTION 4. Creates or re-creates the listed funds as special funds in the state treasury outside the general revenue fund; exempts the special funds from funds consolidation; provides that the funds are to be used only for the purposes designated by law. SECTION 5. Creates or re-creates the listed funds as trust funds in the state treasury outside the general revenue fund; exempts the trust funds from funds consolidation; provides that the trust funds are to be used only for the purposes designated by law. SECTION 6. Creates the Water Development Board operating fund for state revolving funds as a special fund outside the state treasury; exempts the fund from funds consolidation; provides that the fund may be used only for the purposes designated by law. SECTION 7. Exempts the listed revenue from funds consolidation; provides that the revenue may be used only for purposes designated by law. SECTION 8. Contingent upon passage of HB 2185, exempts revenue collected as court costs and dedicated to the listed funds and special accounts from funds consolidation; provides that the funds and special accounts may be used only for the purposes designated by law. SECTION 9. Exempts revenue collected as maintenance tax imposed under the Insurance Code and allocated for the operation of the Department of Insurance from funds consolidation; provides revenue may be used only for purposes designated by law. SECTION 10. Exempts bond proceeds authorized by the 74th Legislature from funds consolidation and funds sweep. SECTION 11. Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE HB 3050 began as a shell bill which rededicated only the compensation to victims of crime fund, the compensation to victims of crime auxiliary fund, the state highway fund, the public transportation fund, the traffic safety fund, the Texas highway beautification, the aviation trust fund, the sexual assault program fund, the children's trust fund and the Children's Trust Fund of Texas Council operating fund. The substitute includes approximately 40 funds or accounts, which, with a few exceptions, fall into a few policy guidelines: funds consisting of gifts, grants and donations; constitutionally or federally mandated funds; trust funds; bond proceeds or loan guaranties; special funds outside GR; and certain funds outside the treasury. The substitute recreates some accounts and exempts them from funds sweep; creates new accounts which have no balances to be swept; re-creates the state lease fund and provides for the fund to be swept at the end of each biennium; creates special funds outside GR; creates or re-creates trust funds outside GR; creates a special fund outside the treasury; and exempts certain revenue from loss of dedication. SUMMARY OF COMMITTEE ACTION HB 3050 was considered in a public hearing on April 5, 1995. The following person testified for the bill: G.K. Sprinkle, TX Association Against Sexual Assault. The bill was referred to subcommittee. The bill was scheduled for a subcommittee public hearing on April 11, 1995. The meeting was cancelled. The bill was scheduled for a subcommittee public hearing on April 18, 1995. The meeting was cancelled. HB 3050 was posted for consideration in a subcommittee public hearing on April 25, 1995. No action was taken on the bill, but testimony was taken on the issue of dedicated funds. The following people testified on the issue: Karey Barton and Lita Gonzalez, Comptroller's Office; Laurel Kelly and Christine Taylor, Attorney General's Office; Mary Boyd, Advisory Commission on State Emergency Communications; Anne Schwartz and Lee Deviney, Public Finance Authority; Dale Craymer, Governor's Office; Curtis Tunnell and Stan Graves, Historical Commission; Elaine Powell, Incentive and Productivity Commission; Dealey Herndon, State Preservation Board; Janie Fields, Children's Trust Fund; and Phil Strickland for the Children's Trust Fund. The bill was posted for consideration again in a subcommittee public hearing on April 27, 1995. No action was taken on the bill, but testimony was taken on the issue of dedicated funds. The following people testified on the issue: Karey Barton, Lita Gonzalez and Kathie Griswold, Comptroller's Office; Cassie Reed and Frank Smith, Department of Transportation; Jayna Burgdorf, Parks and Wildlife; Representative Saunders for Parks and Wildlife funds; Representative Giddings for Higher Education Coordinating Board funds; Glen Provost, Ron Mansolo, and Norma Nance, Department of Health; G.K. Sprinkle, TX Association Against Sexual Assault for the Department of Health; Burton Raiford, Department of Human Services; Michelle Willhelm and William Monroe, Central Education Agency; Representative Pitts for Central Education Agency funds; Sally Anderson, Department of Mental Health and Mental Retardation; Martin Anisman and Gerald Williams, Sam Houston University. The bill was considered in a subcommittee public hearing in the morning of May 2, 1995. The following people testified on the bill: Lita Gonzalez, Karey Barton and Kathie Griswold, Comptroller's Office; Barry Williamson, Railroad Commission; John Bell, Treasurer's Office; Don Brown and James McWhorter, Higher Education Coordinating Board; James Butler, A&M University System; Bill McCray, Department of Criminal Justice; Wayne Green, Commission on Law Enforcement Officer Standards and Education; Tom Haas, Department of Public Safety; John Franks, Texas Youth Commission; Glenna Hastings, Department of Agriculture; Jeff Frank, General Land Office; Steve Minick, Natural Resource Conservation Commission; Craig Pederson, Water Development Board; Steve Hudson and Michael West, Department of Commerce; Jim Hine, Employment Commission; Parisrice Robinson and Natalie Sanchez, Department of Housing and Community Affairs; Robert Rogers, Credit Union Department. The bill was left pending in subcommittee. The bill was considered again in a public hearing in the evening of May 2, 1995. The following people testified on the bill: Lita Gonzalez and Karey Barton, Comptroller' Office; Leslie Pettijohn, Office of Consumer Credit Union; Dick Strader, Cosmetology Commission; Woody Pogue, Department of Insurance; Russ Oliver, Workers' Compensation Commission; James Brush, Department of Licensing and Regulation; John Speed, Board of Registration for Professional Engineers; David Freeman and Suzy Beightler, Racing Commission; Vickie Schubert. The bill was left pending in subcommittee. The bill was scheduled for a subcommittee public hearing on May 4, 1995. The meeting was cancelled. In a full committee public hearing on May 6, 1995, the Chairman called HB 3050 from subcommittee. A committee substitute was offered. A committee amendment to the substitute was offered and adopted to include the Alternative Fuels Research and Education Fund Account to Section 1. Six other committee amendments to the substitute were offered and adopted to make clarifying changes; to allow for the state lease fund to be swept at the end of each biennium; to rededicate revenue statutorily dedicated to the Department of Insurance operating fund; to rededicate revenue statutorily dedicated to the state highway fund; to rededicate revenue statutorily dedicated to the Racing Commission for operation and allocation; and to exempt new funds consisting of bond proceeds from consolidation. Staff was directed to roll the amendments into the substitute. The motion to report the complete committee substitute favorably to the Local and Consent Calendar carried with a vote of 23 Ayes, 0 Nays, 0 PNV and 4 Absent.