LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session March 13, 1997 TO: Honorable Kenneth Armbrister, Chair IN RE: Senate Bill No. 665 Committee on State Affairs By: Haywood Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB665 ( Relating to the sale and delivery of certain motor fuel; providing criminal and civil penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB665-As Introduced Implementing the provisions of the bill would result in a net negative impact of ($2,546,974) 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 transfer the responsibility for enforcement and administration of rules for the regulation of motor fuel which contains ethanol or methanol from the Comptroller to the Commissioner of Agriculture. In addition, the Commissioner of Agriculture would be responsible for regulating and monitoring motor fuel octane levels. Motor fuel dealers in the state would be responsible for maintaining documents relating to postings or certifications of automotive fuel ratings. The bill would increase civil penalties for violations. The bill would provide that fees currently authorized to be collected by the comptroller for testing, inspection, statement or record forms, sale of signs, or performance of other services could be imposed only as determined necessary by the Commissioner of Agriculture to administer the Act. The bill would also provide that fees currently authorized to be collected by the comptroller on motor fuel distributors, wholesalers, or suppliers, without regard to whether the fuel is subject to regulation under the Act, could be imposed only as determined necessary by the Commissioner of Agriculture. Under current law, the comptroller can collect fees in total amounts not to exceed the lessor of the program's annual cost or the statutory cap of $500,000 per year. The bill provides that the fees collected could only be used by the Comptroller in an amount not to exceed $25,000 annually, and by the Commissioner of Agriculture for administration and enforcement of the Act. The Commissioner of Agriculture would determine the costs necessary to administer and enforce the provisions of the Act. Methodolgy The Comptroller has had certain responsibility for enforcing and administering rules relating to motor fuels containing ethanol and methanol since 1989. As the sale of this type of motor fuel has been minimal, the comptroller did not incur any significant costs to administer the program, and therefore, did not collect authorized fees. The Department of Agriculture is currently responsible for inspecting and regulating the calibration of all motor fuel pumps in the state. The Department of Agriculture estimates that implementing the provisions of the bill would cost $2,235,987 the first year and $1,310,987 each year thereafter. In the first year, costs would include the purchase of octane level screening equipment estimated at $597,000, in addition to the annual cost of 22.5 FTE's, including 21.5 inspectors, and $425,600 for sample analysis costs. Because the current program has no significant costs and the new program's costs would exceed $500,000, this office assumes that fee revenue collected by the comptroller would increase by the maximum amount of $500,000. 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 Savings/(Cost) Gain/(Loss) from from General General Revenue Revenue Fund Fund 0001 0001 1998 ($2,235,987) $500,000 1998 (1,310,987) 500,000 2000 (1,310,987) 500,000 2001 (1,310,987) 500,000 2002 (1,310,987) 500,000 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 ($1,735,987) 1999 (810,987) 2000 (810,987) 2001 (810,987) 2002 (810,987) Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Agencies: 551 Department of Agriculture 304 Comptroller of Public Accounts LBB Staff: JK ,JD ,JH