Austin, Texas
                                   FISCAL NOTE
                               75th Regular Session
                                  May 8, 1997
      TO: Honorable Steven Wolens, Chair            IN RE:  Senate Bill No. 1355, Committee Report 2nd House, Substituted
          Committee on State Affairs                              By: Brown
          Austin, Texas
         FROM:  John Keel, Director    
In response to your request for a Fiscal Note on SB1355 ( Relating 
to the regulation of retail stores; providing an administrative 
penalty.) this office has detemined the following:
         Biennial Net Impact to General Revenue Funds by SB1355-Committee Report 2nd House, Substituted

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 partially implement Texas Performance Review 
recommendation CG3 in "Disturbing the Peace: The Challenge of 
Change in Texas Government."  

The bill would create the 
Interagency Task Force on Texas Retail Food Store Regulation 
with the office of the Comptroller of Public Accounts (CPA) 
designated as the lead agency.  The task force would study the 
regulation of retail food stores and report to the Legislature 
recommendations for improving the regulation of retail food 
stores.  The statutory authority for the task force would expire 
June 1, 1999.  

The bill would amend the Agriculture Code 
to conform to current practice by transferring regulatory authority 
 relating to weights and measures for compounding drugs in pharmacies 
from the Texas Department of Agriculture (TDA) to the State 
Board of Pharmacy.  

The bill would require the Department 
of Commerce to cooperate with the Department of Agriculture 
in order to disseminate information regarding business opportunities 
for persons who perform weights and measures inspections.  

bill would also require the Parks and Wildlife Department to 
initiate negotiations and enter into a memorandum of agreement 
with the Department of Health to consolidate the license and 
permit application process for retail food stores that sell 
aquatic products. 

The bill would transfer the responsibility 
for enforcement and administration of rules regulating motor 
fuel containing 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.  The Commissioner could adopt rules 
relating to the frequency of motor fuel testing and would be 
required to consider the limits of funds available from fees 
imposed when adopting such rules.  The Comptroller would still 
be responsible for collecting regulatory fees. The bill would 
also increase civil penalties for violations of methanol, ethanol, 
and automotive fuel rating posting requirements and provide 
for administrative penalties as well as hearings.  

The bill 
would require that 50% of all inspections or tests of weighing 
and measuring devices and automotive fuel rating be transferred 
from the TDA to state licensed private inspectors by September 
1, 1999.  An additional 25% would be transferred by September 
1, 2001.  All enforcement authority would remain with the TDA. 

The bill would take effect September 1, 1997.
The responsibilities of the Interagency Task Force on Retail 
Food Store Regulation would be accomplished with existing appropriations 
for all affected agencies.  

According to both the TDA and 
the State Board of Pharmacy, regulatory responsibility relating 
to weights and measures for compounding drugs in pharmacies 
has already been transferred from the department to the State 
Board of Pharmacy.  Therefore, no fiscal implications are anticipated.

would be no fiscal impact to the Department of Commerce to implement 
provisions of the bill. 

There would be no significant fiscal 
implications to develop a memorandum of agreement between the 
Parks and Wildlife Department and the Department of Health to 
regulate aquatic products.

Transfer of motor fuel testing 
for alcohol content and octane testing would be revenue-neutral. 
Beginning September 1, 1997, new octane testing requirements 
would be in place for the TDA.  According to the TDA, the implementation 
of the new fuel testing program will cost $454,223 in the first 
year and require 7.6 additional FTEs.  These costs would be 
recovered through fees collected by the Comptroller and set 
by the department.  By fiscal year 2000, according to the department, 
$252,665 and 4.8 FTEs would be needed by the department for 
oversight of the fuel testing program with the other part of 
the new program privatized in fiscal year 1999. For fiscal year 
2002, $176,858 would be needed to enforce the fuel testing program. 
 In fiscal 2001 the transfer of 75% of fuel testing and weights 
and measures inspections would take place.

According to the 
TDA, privatizing weights and measures testing will result in 
savings to the General Revenue Fund of $642,123 and a reduction 
of 15.3 FTEs by fiscal year 2000.  As of fiscal year 2002, the 
savings to general revenue are estimated to be $963,185 and 
the FTEs will be reduced by 18.5.  Also according to TDA, there 
will be a loss of fee revenue by the department for weights 
and measures inspections.  The department estimates a revenue 
loss of $642,123 by fiscal year 2000, and a loss of $963,185 
by fiscal year 2002.  TDA states that its weights and measures 
program is completely self-supported by  fees that are collected. 

It is assumed that there would be an increase in revenue 
from the licensing of private companies to perform weights and 
measures inspections, but no projections were available.   It 
is also assumed that some hearings would take place at the State 
Office of Administrative Hearings (SOAH) regarding violations 
of the fuel testing requirements.   SOAH estimates that hearings 
costs for TDA would average $5,600 each year, but this estimate 
assumes those costs would be offset by collection of administrative 
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           Probable Revenue   Probable Revenue   Change in Number   
            Savings/(Cost)     Savings/(Cost)     Gain/(Loss) from   Gain/(Loss) from   of State          
            from General       from General       General Revenue    General Revenue    Employees from    
            Revenue Fund       Revenue Fund       Fund               Fund               FY 1997           
            0001               0001               0001               0001                                  
       1998        ($459,823)                $0          $459,823                $0               7.6
       1998         (258,255)           642,123           258,255         (642,123)             (7.7)
       2000         (258,255)           642,123           258,255         (642,123)             (7.7)
       2001         (182,458)           963,185           182,458         (963,185)            (15.4)
       2002         (182,458)           963,185           182,458         (963,185)            (15.4)

         Net Impact on General Revenue Related Funds:

              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related 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.
No fiscal implication to units of local government is anticipated.
   Source:            Agencies:   465   Department of Commerce
                                         551   Department of Agriculture
                                         304   Comptroller of Public Accounts
                                         360   State Office of Administrative Hearings
                      LBB Staff:   JK ,JD ,BB ,JH