LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 15, 1997 TO: Honorable Fred M. Bosse, Chair IN RE: Senate Bill No. 1339, Committee Report 2nd House, as amended Committee on Land and Resource Management By: Patterson, Jerry House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1339 ( Relating to coastal erosion.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1339-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 could provide the legal basis for an appropriation of funds to implement the provisions of the bill. Fiscal Analysis The bill would create the Coastal Erosion Response Fund in the State Treasury to receive all money appropriated and revenue collected for use in erosion response activities. Revenue from two new sources would be deposited to the fund: a $1 dollar surcharge on each Texas windstorm and hail insurance and Texas fire and explosion insurance issued through the Texas Catastrophe Property Insurance Association (TCPIA), and sales of specially-designed "Don't Mess with Texas Beaches" license plates ($25 per plate). The Texas Department of Transportation (TxDOT) could charge a fee of up to five dollars per license plate to defray costs. Methodolgy The TCPIA provided information on the number of policies that would be subject to the surcharge. The estimated income from license plates is derived from information obtained from the Comptroller of Public Accounts, the General Land Office and TxDOT. No data were available on which to base an estimate of fleet sales (50 or more) at $15 per plate, so the license plate income reflects sale of individual plates only. Costs to TxDOT include programming costs in fiscal year 1998, as well as an initial cost to process, manufacture and distribute new plates ($8.24 per plate). This estimate assumes that TxDOT would charge the maximum allowable fee and that all costs and revenue will be attributed to the State Highway Fund. Costs and revenues were adjusted to reflect program start-up time in fiscal year 1998. Although no expenditures are shown from the new fund, it would be expected that available revenue would fund coastal erosion response activities and local assistance grants. The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage are estimated as follows: Five Year Impact: Fiscal Year Probable Revenue Probable Revenue Probable Gain/(Loss) from Gain/(Loss) from Savings/(Cost) New - Coastal State Highway Fund from State Erosion Response Highway Fund Fund NEW-OTH 0006 0006 1998 $103,000 $6,000 ($28,900) 1998 135,500 12,500 (2,100) 2000 138,000 13,000 (2,100) 2001 140,500 13,500 (2,200) 2002 143,000 14,000 (2,300) Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 0 2000 0 2001 0 2002 0 Based on balances in the Coastal Erosion Response Fund, units of local governmental could apply for and receive grant funding to conduct erosion response activities. Grant funding could be used as a match in seeking other funding, however, the GLO may establish cost share requirements for any proposed project or grant. Local governments may lose certain property from their tax rolls to the Permanent School Fund if the property becomes submerged due to erosion. Source: Agencies: 304 Comptroller of Public Accounts 305 General Land Office and Veterans' Land Board 454 Department of Insurance 601 Department of Transportation LBB Staff: JK ,BB ,NT