LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 2, 1997
         
         
      TO: Honorable David Counts, Chair            IN RE:  House Bill No. 2333
          Committee on Natural Resources                              By: Lewis, Ron
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB2333 ( Relating 
to certain fees related to water quality.) this office has detemined 
the following:
         
         Biennial Net Impact to General Revenue Funds by HB2333-As Introduced
         

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 increase the cap on the waste treatment inspection 
fee and provide two rate schedules for before and after the 
federal delegation of the National Pollutant Discharge Elimination 
System (NPDES) permit authority to the state.

Before NPDES 
delegation, the waste treatment inspection fee cap would be 
raised from $11,000 to $25,000 per discharge permit and effective 
September 1, 1998, it would be raised to $65,000.  

After 
NPDES delegation, the bill would raise the fee cap from $25,000 
to $40,000 per discharge permit, and to $80,000, effective September 
1, 1998.  The bill would extend the prohibition on increasing 
the fee until August 31, 2001 and limit any increase in the 
fee for payment of additional expenses for obtaining or administering 
the NPDES program. 

The bill would broaden the authority 
for use of the waste treatment inspection fee to include water 
quality control programs, including regional watershed assessments 
and the implementation of regional water quality management 
functions, otherwise known as the Clean Rivers program.  This 
bill would extend funding for the Clean Rivers program, currently 
set to expire August 31, 1998.

The bill would broaden the 
use of the safe drinking water fee charged to persons who own, 
operate, or maintain public drinking water supply systems to 
include: oversight of and technical assistance to water and 
wastewater utilities; water resource management and the regulation 
of water rights; and oversight of, and technical assistance 
to, conservation and reclamation districts.

The effective 
date of this bill would be upon passage and enactment.
 
Methodolgy
 
Under the increased fee authority provided by this bill, beginning 
in fiscal year 1998 the TNRCC anticipates collecting additional 
annual waste treatment inspection fees (Water Quality Account) 
in the amount of $4 million to fund 45 FTEs to conduct water 
quality program enhancements. 

To implement the additional 
drinking water program requirements of this bill, the TNRCC 
anticipates collecting additional annual amount of approximately 
$4 million in the Public Health Service Fee Account from fees 
collected from public drinking water supply systems, as provided 
in existing law.  This additional funding is for the following 
additional functions: $2.7 million and 9 FTEs for water quantity 
and water rights related programs; $0.34 million and 3 FTEs 
for water utilities oversight; and $1.7 million for public drinking 
water programs.  

In addition, beginning fiscal year 1999, 
the TNRCC estimates collecting $5,000,000 each year (17.5 FTEs) 
from increased waste treatment inspection fees to fund regional 
water quality assessments and implement regional water quality 
management functions, currently funded under the Clean Rivers 
program.  
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           Probable Revenue   Probable           Change in Number   
            Gain/(Loss) from   Savings/(Cost)     Gain/(Loss) from   Savings/(Cost)     of State          
            Water Quality      from Water         Department of      from Department    Employees from    
            Account/           Quality Account/   Health Public      of Health Public   FY 1997           
            GR-Dedicated       GR-Dedicated       Health Service     Health Service                       
                                                  Fee Account/       Fee Account/                         
                                                  GR-Dedicated       GR-Dedicated                         
            0153               0153               0524               0524                                  
       1998        $3,830,000      ($3,830,000)        $4,310,000      ($4,310,000)              57.0
       1998         8,830,000       (8,830,000)         3,950,000       (3,950,000)              74.5
       2000         8,830,000       (8,830,000)         3,950,000       (3,950,000)              74.5
       2001         8,830,000       (8,830,000)         3,950,000       (3,950,000)              74.5
       2002         8,830,000       (8,830,000)         3,950,000       (3,950,000)              74.5
 


 
         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.
          
The TNRCC estimates total costs to local governments in increased 
fees of up to $5 million per year should the TNRCC use the authority 
provided by this bill to increase the annual water treatment 
inspection fee and the safe drinking water fees.  These increased 
fees would be paid by those units of local government currently 
required to pay the existing fees.
          
   Source:            Agencies:   580   Water Development Board
                                         304   Comptroller of Public Accounts
                                         
                      LBB Staff:   JK ,BB ,NT ,TL