LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 15, 1997
TO: Honorable Bill Ratliff, Chair IN RE: House Bill No. 99,
As Engrossed
Committee on Finance By: Gray
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB99 ( relating
to the funding and operation of certain emergency management
and disaster relief programs) this office has detemined the
following:
Biennial Net Impact to General Revenue Funds by HB99-As Engrossed
Implementing the provisions of the bill would result in a net
impact of $0 to General Revenue Related Funds through the biennium
ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
This bill would amend Chapter 418 of the Government Code to
create the Disaster Management Fund (fund) as a dedicated fund
in the State Treasury. The new fund would be used to provide
money for emergency management and disaster relief programs
when the costs of such exceeded the funds regularly appropriated
to state and local agencies. The definition of disaster would
be expanded to include terrorist activity.
Methodolgy
The fund would consist of the revenues collected through an
assessment for disaster relief imposed on each public utility
within the Public Utility Commission's jurisdiction and any
additional money appropriated to the fund.
Money in the fund
could only be used for emergency management and disaster relief
programs. In addition, pursuant to authorization by the Governor,
10 percent of the fund could be used for the payment of administrative
expenses of the Division of Emergency Management within the
Office of the Governor; 15 percent could be used for the payment
of emergency management training expenses incurred by state
agencies or political subdivisions, and emergency management
training expenses incurred in implementation of mutual aid assistance
authorized under Section 418.109 of the Government Code; and
4 percent for expenses incurred in the implementation of statewide
notification systems or services.
An annual assessment
for disaster relief would be imposed on each public utility
serving the ultimate consumer, including interexchange telecommunications
carriers and each municipally owned electric utility. The additional
assessment would be equal to one-thirtieth of one percent (0.00033
percent) of the gross receipts of the utility from rates charged
to ultimate consumers within Texas. The assessment imposed
on eligible public utilities and any fees, penalties, and interest
related to that assessment would be collected by the Comptroller
and deposited to the credit of the Disaster Management Fund.
A
regulatory authority would be required to allow for the adjustment
of a public utility's or a municipally owned electric utility's
rates to recover the assessment and any additional taxes and
fees resulting from the assessment. The recovery would be passed
through to the consumer in the rates charged by the utility
and could not be separately stated. The rate adjustment would
take effect on the date on which a tariff was filed with the
regulatory authority.
The assessment imposed under the
bill would not apply to any investor-owned electric utility
under a plan of reorganization that had been confirmed by a
federal bankruptcy court if such utility were not allowed to
adjust its rates to recover the assessment.
The assessment
would be due on August 15 of each year. A utility could make
quarterly payments.
The bill would allow the Governor
to use fund revenues for administrative expenses, training expenses
incurred by state agencies or political subdivisions, and certain
implementation expenses.
This bill would take effect on September
1, 1997. On September 1, 1997, the existing Disaster Contingency
GR-Account 0453 would be abolished, and the Comptroller would
be required to transfer any unencumbered balance in that account
to the newly created Disaster Management Fund. This bill would
only apply to an assessment imposed on or after January 1, 1998.
The fiscal impact was estimated based on the existing
assessment on public utilities and an estimate of the impact
of the assessment as it would be applied to municipally owned
electric utilities. The first year is adjusted for the effective
date and the report due date. According to Comptroller rules
for the Public Utility Gross Receipts Tax, the report due on
August 15 of each year is for the reporting period of July 1
of the prior year through June 30 of the current year. Because
the effective date would be September 1,1997, the first-year
report period would be reduced to only 10 months.
Since it
would transfer any unencumbered balances in the existing Emergency
Contingency Account 0453 to the newly created fund, there would
be a one-time loss to the General Revenue Fund because the account
that would be abolished is a dedicated account in the General
Revenue Fund, while the newly-created fund would exist outside
of the General Revenue Fund. Since the unencumbered amount
existing in the Disaster Contingency Account on September 1,
1997 would depend on agency spending and the legislative appropriation,
it is not possible to predict the amount that would be transferred
to the new fund on that date. Pursuant to the 1998-1999 Biennial
Revenue Estimate, the end-of-year balance in GR-Account 0453
is expected to be $1,304,000.
It is estimated that the
Department of Public Safety would add 22 positions to implement
the statewide mutual aid responsibilities of the bill. The
fund would also be used to pay the administrative expenses of
the Division of Emergency Management, expenses related to emergency
management training for state agencies and political subdivisions,
and expenses for implementation of statewide notification systems
or services. There could be temporary staffing requirements
for the Department of Human Services related to provision of
financial aid to individuals or families qualifying for disaster
relief, but the fiscal impact would not be significant.
NOTE:
The wording on line 22 of page 8 could be subject to misinterpretation
as to whether it refers to a public utility or to a public electric
utility, thereby excluding telecommunications utilities from
rate adjustment.
NOTE: With an effective date of September
1, 1997, the first assessment due date after that date would
be August 15, 1998. However, under current law, one-half of
the assessment due on August 15, 1998 must be paid by August
15, 1997. Because that date is before the effective date, it
is assumed that the entire first-year assessment would not be
paid until August 15, 1998.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue Probable Revenue Probable Change in Number
Gain/(Loss) from Gain/(Loss) from Savings/(Cost) of State
Disaster New - Disaster from New - Employees from
Contingency Management Fund Disaster FY 1997
Account/ Management Fund
GR-Dedicated
0453 NEW-OTH NEW-OTH
1998 ($1,304,000) $10,450,000 ($920,686) 22.0
1998 0 10,973,000 (734,627) 22.0
2000 0 11,569,000 (734,627) 22.0
2001 0 11,961,000 (776,549) 22.0
2002 0 12,373,000 (776,549) 22.0
Net Impact on General Revenue Related Funds:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No significant fiscal implication to units of local government
is anticipated.
Source: Agencies: 304 Comptroller of Public Accounts
473 Public Utility Commission of Texas
LBB Staff: JK ,RR ,TH ,RS