Austin, Texas
                                   FISCAL NOTE
                               75th Regular Session
                                  April 1, 1997
      TO: Honorable J.E. "Buster" Brown, Chair            IN RE:  Senate Bill No. 1355
          Committee on Natural Resources                              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.) this office has detemined 
the following:
         Biennial Net Impact to General Revenue Funds by SB1355-As Introduced

Implementing the provisions of the bill would result in a 
net positive impact of $513,718 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.  

TDA would no longer be responsible for 
the retail inspection of eggs.  The 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 penalties for violations 
of methanol, ethanol, and automotive fuel rating posting requirements. 

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.  The remaining 50% would be transferred 
by September 1, 2001.  All enforcement authority would remain 
with the TDA.  

The bill would take effect September 1, 1997, 
except Sections 9-13 of the Act would only apply to a delivery, 
transfer, or sale of motor fuel that occurred on or after September 
1, 1999 (fiscal year 2000). 
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.

to the TDA, the elimination of retail egg inspection authority 
would result in savings of $256,859 per year in General Revenue 
and the reduction of 4.7 FTEs. 

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 would be revenue-neutral for fiscal years 
1998 and 1999 since no new responsibilities would be imposed. 
 Beginning September 1, 1999, new octane testing requirements 
would be in place for the TDA.  At this same time the department 
would be required to privatize 50% of the fuel testing and weights 
and measures inspections.  According to the TDA, the implementation 
of the new fuel testing program will cost $344,693 in the first 
year and require 4.8 FTEs.  These costs would be recovered through 
fees collected by the Comptroller and set by the department. 
 In fiscal year 2002 according to the department, $101,062 and 
two FTEs would be needed by the department for oversight of 
the fuel testing program. In fiscal 2002 the transfer of all 
fuel testing and weights and measures inspections would take 

According to the TDA, the privatizing weights and 
measures testing will result in savings to the General Revenue 
Fund of $490,530 and a reduction of 12.5 FTEs in fiscal year 
2000.  In fiscal year 2002, the savings to general revenue are 
estimated to be $981,060 and the FTEs will be reduced by 25. 
 According to the department there will also be a loss of fee 
revenue that had been collected by the department for weights 
and measures inspections.  The department estimates a revenue 
loss of $490,530 in fiscal year 2000, and a loss of $981,060 
in fiscal year 2002.  According to the department, its weights 
and measures program is completely self supported through the 
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. 
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           Probable Revenue   Change in Number   
            Savings/(Cost)     Gain/(Loss) from   Savings/(Cost)     Gain/(Loss) from   of State          
            from General       General Revenue    from General       General Revenue    Employees from    
            Revenue Fund       Fund               Revenue Fund       Fund               FY 1997           
            0001               0001               0001               0001                                  
       1998          $256,859                $0                $0                $0             (4.7)
       1998           256,859                 0                 0                 0             (4.7)
       2000           747,389           344,693         (344,693)         (490,530)            (12.4)
       2001           747,389           252,655         (252,655)         (490,530)            (12.4)
       2002         1,389,512           101,062         (101,062)       (1,132,653)            (27.7)

         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
               1998             $256,859
               1999              256,859
               2000              256,859
               2001              256,859
               2002              256,859
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:   501   Department of Health
                                         551   Department of Agriculture
                                         465   Department of Commerce
                                         458   Alcoholic Beverage Commission
                                         304   Comptroller of Public Accounts
                                         802   Parks and Wildlife Department
                      LBB Staff:   JK ,BB ,JH