LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 3, 1997 TO: Honorable J.E. "Buster" Brown, Chair IN RE: Senate Bill No. 925, Committee Report 1st House, Substituted Committee on Natural Resources By: Ogden Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB925 ( relating to the imposition, collection, and administration of LPG delivery fees) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB925-Committee Report 1st House, Substituted No significant fiscal implication to the State is anticipated. The bill would amend Chapter 113, Natural Resources Code, relating to liquefied petroleum gas (LPG). The bill would dedicate fees and all other funds in the Alternative Fuels Research and Education Account #0101 (AFRED) to be used for specific purposes by the Railroad Commission (RRC). Funds collected under agreements with other states and assessments, rebates on assessments, and other funds collected under the federal Propane Education and Research Act of 1996 (PERA) would also be dedicated to AFRED. The bill would increase from 25% to 50% the percentage of AFRED funds available for consumer rebate programs. Owners of LPG gas at the time of odorization or at the time of import into Texas would pay a fee based on the amount of odorized LPG sold and placed into commerce. Owners exporting LPG gas to other states would be assessed a fee if that state has a PERA agreement with the RRC; the fee would be paid to the responsible agency or organization in that state. The bill would allow for agreements with agencies or organizations of other states to be made regarding the administration, collection, reporting, and payment of fees, as well as other provisions. The bill would take effect September 1, 1997, except for two provisions which would take effect the later of September 1, 1997 or upon receipt of a written report from an independent auditing firm that the industry referendum required under the federal PERA have taken place and have been approved by the necessary level of propane producers and retail marketers. If Texas were to enter into reciprocal cooperation agreements with other states, the RRC would expect to see an increase in revenues deposited into the AFRED account. According to the RRC, LPG exports from Texas are 46 percent to Mexico and 54 percent to other states. The RRC also estimates that this would produce in increase in fee collections of over $500,000 each year credited to the AFRED account. However at this time it is not known how many states would enter into cooperative agreements, when they would take effect, and if the industry referendum required by the PERA would be approved. No fiscal implication to units of local government is anticipated. Source: Agencies: 455 Railroad Commission LBB Staff: JK ,BB