LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 17, 1997
TO: Honorable Bill Ratliff, Chair IN RE: House Bill No. 99, Committee Report 2nd House, as amended
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-Committee Report 2nd House, as amended
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 would 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 (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 in addition to the
assessment imposed on each electric public utility 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 4 percent for expenses incurred in the implementation
of statewide notification systems or services.
In addition
to the assessment imposed on each electric public utility within
the Public Utility's jurisdiction under Section 1.351 and Title
II of the Public Utility Regulatory Act of 1995, an annual assessment
for disaster relief would be imposed. 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.
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 September 1, 1997.
The fiscal impact was estimated
based on 1/30 of 1 percent of FY 1995 gross receipts for electric
public utilities. The current amendment refers only to an assessment
in addition to the assessment imposed on electric public utilities.
It does not reference assessments on telecommunications utilities
and interexchange carriers or municipally owned electric utilities.
Since the bill would transfer any unencumbered balances
in the existing Emergency Contingency Account 0453 to the newly
created trust 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:
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) $5,010,000 ($920,686) 22.0
1998 0 5,010,000 (734,627) 22.0
2000 0 5,010,000 (734,627) 22.0
2001 0 5,010,000 (776,549) 22.0
2002 0 5,010,000 (776,549) 22.0
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
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.
Source: Agencies: 304 Comptroller of Public Accounts
473 Public Utility Commission of Texas
LBB Staff: JK ,RR ,MG