LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 10, 1995 TO: Honorable John Whitmire, Chair IN RE: Senate Bill No. 178 Special Committee on Emissions and By: Whitmire Clean Air Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 178 (Relating to delay of the vehicle emissions inspection and maintenance program.) this office has determined the following: The bill would suspend implementation of the state's motor vehicle emission inspection and maintenance (I/M) program until January 2, 1997. The I/M program is intended to help achieve required emission reductions in the state's four nonattainment areas pursuant to the federal Clean Air Act and Section 382.037, Texas Health and Safety Code. Consequently, suspension of the I/M program could result in the state's failure to comply with requirements of the federal Clean Air Act (FCAA) . Failure to meet FCAA requirements could result in federal sanctions and federal funding losses. Suspension of the I/M program will eliminate fee revenues appropriated to the Texas Natural Resource Conservation Commission (TNRCC) for program implementation for fiscal year 1996 and the first four months of fiscal year 1997. TNRCC would also experience a reduction in cost associated with delayed implementation of the program. Suspension of the I/M program will result in some cost savings to the Texas Department of Transportation (TDOT) for fiscal year 1996. However, these savings will be partially offset by program reactivation costs beginning in fiscal year 1996 and continuing into fiscal year 1997. Local governments in nonattainment areas could realize some losses in revenue from sales tax, property tax and enforcement penalties on noncompliant vehicles due to suspension of the I/M program. These losses could be mitigated by savings due to the deferral of inspection costs of government-owned vehicles. If federal sanctions are imposed due to the state's failure to meet FCAA requirements, the loss of local transportation funds to local governments could be significant and would exceed any savings. Suspension of the I/M program could result in claims against the state for damages and other compensation by I/M program contractors. The potential cost liability to the state cannot be determined. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Revenue Probable Savings Probable Cost Out Year Loss from Clean to Clean Air of State Highway Air Account 151 Account 151 Fund 006 1996 $8,254,152 $7,556,655 $52,052 1997 2,723,870 2,493,696 21,072 1998 0 0 0 1999 0 0 0 2000 0 0 0 Fiscal Probable Savings Change in Year to State Highway Number of State Fund 006 Employees from FY 1995 1996 $168,000 (56.5) 1997 0 (18.0) 1998 0 .0 1999 0 .0 2000 0 .0 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The fiscal implication to units of local government cannot be determined. Source: Department of Public Safety, Natural Resource Conservation Commission, Department of Transportation LBB Staff: JK, JB, DF