LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 5, 1997
TO: Honorable David Counts, Chair IN RE: Senate Bill No. 1, Committee Report 2nd House, Substituted
Committee on Natural Resources By: Brown
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1 ( Relating
to the development and management of the water resources of
the state; providing penalties.) this office has detemined the
following:
Biennial Net Impact to General Revenue Funds by SB1-Committee Report 2nd House, Substituted
Implementing the provisions of the bill would result in a
net negative impact of $(49,838,026) 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 provide a framework for the development and management
of water resources, including drought planning, water utility
regulation, interbasin transfers of water, financial and technical
assistance, assistance to small and disadvantaged communities
and data collection.
The Texas Water Development Board (TWDB)
would designate regional water planning areas, which would prepare
water plans to develop, manage and conserve water resources
and provide a drought contingency response. The TWDB, Texas
Natural Resource Conservation Commission (TNRCC) and the Texas
Parks and Wildlife Department (TPWD) would provide technical
and financial assistance for this planning. The Governor s
Office - Division of Emergency Management would coordinate the
drought response portion of the state water plan.
The bill
would establish procedures for the TNRCC to create new groundwater
districts. TNRCC and TWDB would provide technical assistance
to districts in priority groundwater management areas to develop
management plans that are consistent with regional plans. Financial
assistance would be available for district activities. The
bill would create the Texas Groundwater Management Council to
determine whether districts are operational. The Texas Agricultural
Extension Service would implement an educational program to
inform residents of the status of the area's water resources
and management options. The bill would provide a tax exemption
for capital equipment used for water conservation or water/wastewater
recycling in the manufacturing process.
Contingent upon passage
of a constitutional amendment (SJR 17), the bill would establish
the Texas Water Development Fund II (Fund II), a special fund
in the state treasury. Existing bond authorizations for water
supply, water quality and flood control would be combined into
a single financial assistance account. The Fund would include
a state participation and an economically distressed areas program
account.
The bill would establish a water resource management
fee to be collected by TNRCC from water systems, based on meter
size and usage. In addition, the Texas Department of Health
(TDH) would assess and collect fees on the gross receipts of
bottled water plants. The bill also would establish an annual
water rights fee to be assessed on rights held for certain uses.
All fee revenue would be deposited to the Water Facilities
Fund, a special account in the General Revenue Fund which would
be administered by TWDB. Two and one-half percent of deposits
to the fund would be available to pay for TNRCC operating expenses
relating to water resource management and protection. The remainder
would be used for TNRCC water programs, TWDB financial assistance
programs and fund administration, and other specific uses, including
weather modification and brush control.
The bill would create
two programs, the pilot weather modification and the conservation
and restoration programs each with corresponding GR-Dedicated
accounts. The Brush Control Fund also would be recreated under
the Soil and Water Conservation Board.
TNRCC would be required
to determine appropriate compensation to be paid by the recipient
of an interbasin water transfer to the basin of origin which
would be deposited to the Water Facilities Fund. The funds
would be used for loans on eligible projects, project acquisition,
and debt service payments.
The bill also addresses the financial
needs of small and disadvantaged communities, water and wastewater
service regulation and data collection.
Methodolgy
Estimates of the bill s cost are based on historical data and
past experience for similar programs or requirements. The estimated
fiscal impact to the General Revenue Fund and total FTEs (All
Funds) required for each agency are shown for the 1998-99 biennium.
TEXAS
WATER DEVELOPMENT BOARD: Drought planning and monitoring; water
conservation; financial and technical assistance for regional
water planning and ground water management plans; administration
of Water Facilities Fund; and financial assistance programs;
coordinate and manage data collection and dissemination, including
developing digital base maps. The estimate includes over $18
million in general revenue for grants to develop 16 regional
management plans.
ESTIMATED COST to General Revenue, 1998-99
biennium: $(40,478,960).
ESTIMATED FTEs (All Funds), FY1998:
13.5; FY1999: 23.5.
TEXAS NATURAL RESOURCE CONSERVATION
COMMISSION: Drought planning and monitoring; water conservation;
enforcement; administration of water resource management fee;
water rights management; water service regulation; interbasin
water transfers; data collection.
ESTIMATED NET COST to General
Revenue, 1998-99 biennium: $(5,662,066).
ESTIMATED FTEs (All
Funds) 1998-99 biennium: 24.
TEXAS PARKS AND WILDLIFE DEPARTMENT:
Drought planning and monitoring; assess impact of plans on fish
and wildlife; administer of conservation and restoration fund;
technical assistance; data collection.
ESTIMATED NET COST to
General Revenue, 1998-99 biennium: $(700,000).
ESTIMATED FTEs
(All Funds) 1998-99 biennium: 4.
COMPTROLLER: Tax exemption
for water conservation and wastewater recycling equipment.
ESTIMATED
NET LOSS to General Revenue, 1998-99 biennium: $(1,479,000)
TEXAS
AGRICULTURAL EXTENSION SERVICE: Administration of education
program to inform district residents of water issues.
ESTIMATED
NET COST to General Revenue, 1998-99 biennium: $(1,500,000)
OTHER
AGENCIES:
The Texas Department of Agriculture estimates that
the bill's provisions for the linked deposit program, which
provides funds to finance water conservation projects, would
result in a loss of interest earnings of $200,000 per year.
The estimated annual revenue collected by the Texas Department
of Health (TDH) from the bottled water fee is $324,000, based
on 54 facilities at the average fee of $6,000. TDH estimates
that the cost to collect the fee is $9,000 per year. All other
agencies affected by this bill estimated no fiscal impact.
According
to TNRCC, the estimated total revenue deposited to the Water
Facilities Fund is $54.7 million per year, of which $3.4 million
is retained by units of local government.
In the following
table, the estimated revenue gains to the Pilot Weather Modification
Fund, Conservation and Restoration Fund and Water Resource Management
Account are transfers from the Water Facilities Fund.
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 Probable Revenue Probable Revenue Probable Change in Number
Savings/(Cost) Gain/(Loss) from Gain/(Loss) from Savings/(Cost) of State
from General General Revenue Federal Funds from Federal Funds Employees from
Revenue Fund Fund FY 1997
0001 0001 0555 0555
1998 ($35,607,990) ($493,000) $5,777,096 ($5,777,096) 41.5
1998 (12,751,036) (986,000) 5,763,597 (5,763,597) 51.5
2000 (12,366,036) (1,478,000) 5,834,234 (5,834,234) 51.5
2001 (17,366,036) (1,523,000) 5,834,234 (5,834,234) 51.5
2002 (13,632,380) (1,563,000) 92,012 (92,012) 51.5
Fiscal Year Probable Revenue Probable Probable Revenue Probable
Gain/(Loss) from Savings/(Cost) Gain/(Loss) from Savings/(Cost)
New - GR from New - GR New - GR from New - GR
Dedicated - Dedicated - Dedicated - Dedicated -
Water Facilities Water Facilities Pilot Weather Pilot Weather
Fund Fund Modification Fund Modification Fund
NEW-DED NEW-DED NEW-DED NEW-DED
1998 $51,300,000 ($51,300,000) $1,364,114 ($1,364,114)
1999 51,300,000 (51,300,000) 1,364,114 (1,364,114)
2000 51,300,000 (51,300,000) 1,364,114 (1,364,114)
2001 51,300,000 (51,300,000) 1,364,114 (1,364,114)
2002 51,300,000 (51,300,000) 1,364 (1,364,114)
Fiscal Year Probable Revenue Probable Probable Revenue Probable
Gain/(Loss) from Savings/(Cost) Gain/(Loss) from Savings/(Cost)
New - GR from New - GR Water Resource from Water
Dedicated - Dedicated - Management Resource
Conservation and Conservation and Account - New GR Management
Restoration Fund Restoration Fund Dedicated Account - New GR
Dedicated
NEW-DED NEW-DED NEW-DED NEW-DED
1998 $1,364,114 ($1,364,114) $1,282,500 ($1,282,500)
1999 1,364,114 (1,364,114) 1,282,500 (1,282,500)
2000 1,364,114 (1,364,114) 1,282,500 (1,282,500)
2001 1,364,114 (1,364,114) 1,282,500 (1,282,500)
2002 1,364,114 (1,364,114) 1,282,500 (1,282,500)
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 ($36,100,990)
1999 (13,737,036)
2000 (13,844,036)
2001 (18,889,036)
2002 (15,195,380)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Local governments would be affected by several provisions in
this bill. The bill would impose additional requirements on
units of local government that function as water utilities for
water resource planning. Grant funding is available from TWDB
for these purposes. Under the bill's water fee provisions,
public water systems retain five cents for each connection to
its system. TNRCC estimates that the revenue gain to local
governments would be $3.4 million per year, which should cover
administrative costs associated with the assessment and collection
of the fees.
In addition, much of the revenue generated
under the bill's provisions for the Water Facilities Fund would
be available to units of local government for loans and grants
for water related projects.
Source: Agencies: 580 Water Development Board
582 Natural Resources Conservation Commission
802 Parks and Wildlife Department
551 Department of Agriculture
304 Comptroller of Public Accounts
501 Department of Health
592 Soil and Water Conservation Board
555 Texas Agricultural Extension Service
Governor's Office -- Division of Emergency Management
LBB Staff: JK ,BB ,DM ,NT