LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 29, 1997
TO: Honorable James E. "Pete" Laney IN RE: House Bill No. 99, As Passed 2nd House
Speaker of the House Gray
House of Representatives
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 Passed 2nd House
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
The bill would amend Chapter 418 of the Government Code to create
the Disaster Management Fund (trust fund) as a trust fund in
the Texas Treasury Safekeeping Trust Company. The new trust
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 trust fund would consist of the revenues collected through
an assessment for disaster relief imposed on each electric utility
and municipally owned utility serving the ultimate consumer
within the Public Utility Commission's jurisdiction and any
additional money appropriated to the trust fund.
Money in
the trust 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 four percent for expenses incurred in the implementation
of statewide notification systems or services.
In addition
to the assessment imposed on each public utility within the
Public Utility Commission's jurisdiction under Section 1.351
of the Public Utility Regulatory Act of 1995, an annual assessment
for disaster relief would be imposed on each electric utility
and municipally owned 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 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
and would not be subject to an appeal.
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 assessment imposed by the bill would
expire September 1, 2000.
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.
The bill would become effective
immediately upon enactment, assuming it received the requisite
two-thirds majority votes in both houses of the Legislature.
Otherwise, it would become effective 90 days after adjournment.
On the effective date, 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.
The fiscal impact
was estimated based on the existing assessment on public electric
utilities and an estimate of the impact of the assessment as
it would be applied to municipally owned electric utilities.
There is an adjustment to the 1997 and 1998 estimates 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.
The fiscal note assumes the bill would have an immediate effect,
therefore, one-half of the 1998 assessment would be due August
15, 1997 and one-half on August 15, 1998.
The fiscal note
assumes the assessment would not apply to the El Paso Electric
Company, because it is subject to a reorganization plan confirmed
by a federal bankruptcy court.
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. According
to DPS, assuming the source of funding would cease, the programs
associated with the provisions of the bill would cease as would
the staffing requirements for the programs.
NOTE: With
an immediate effective date, the first assessment due date after
that date would by August 15, 1998; however, under current law,
one-half of the assessment due on August 15, 1998 must be paid
by August 15, 1997.
NOTE: The wording on line 15 of floor
amendment 1 could be interpreted to include municipally owned
utilities other than electric utilities such as gas, water,
or wastewater. The fiscal note assumes the assessment would
not apply to municipally owned gas, water, and wastewater utilities.
The probable fiscal implications of implementing the provisions
of the bill during each of the first six years following passage
is estimated as follows:
Six Year Impact:
Fiscal Year Probable Revenue Probable Revenue Probable Change in Number
Gain/(Loss) from Gain/(Loss) to Savings/(Cost) of State
Disaster New - Disaster from New - Employees from
Contingency Management Fund Disaster FY 1996
Account/ in the Texas Management Fund
GR-Dedicated Treasury in the Texas
Safekeeping Treasury
Trust Company Safekeeping
Trust Company
0453 NEW-OTH NEW-OTH
1997 ($1,304,000) $4,289,000 $0 0.0
1997 0 2,985,000 (920,686) 22.0
1999 0 6,081,000 (734,627) 22.0
2000 0 6,293,000 (734,267) 22.0
2001 0 0 0 0.0
2002 0 0 0 0.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1997 $0
1998 0
1999 0
2000 0
2001 0
2002 0
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 ,MG