LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 11, 1999
TO: Honorable J.E. "Buster" Brown, Chair, Senate Committee on
Natural Resources
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB 2816 by Junell (Relating to the fee on delivery of
certain petroleum products and programs for corrective
actions in response to releases from petroleum storage
tanks.), As Engrossed
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2816, As Engrossed: positive impact of $0 through the biennium *
* ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $0 *
* 2001 0 *
* 2002 0 *
* 2003 0 *
* 2004 (47,250,582) *
****************************************************
All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year Revenue Savings/ Revenue Savings/ Number of *
* Gain/(Loss) (Cost) from Gain/(Loss) (Cost) from State *
* from Petroleum from New - New - GR Employees *
* Petroleum Storage GR Dedicated from FY 1999 *
* Storage Tank Dedicated -Petroleum *
* Tank Remediation -Petroleum Storage *
* Remediation Account/ Storage Tank *
* Account/ GR- Tank Removal *
* GR- Dedicated Removal Loan *
* Dedicated 0655 Loan Program *
* 0655 Program Account *
* Account *
* 2000 $17,789,164 3.0 *
* $(36,545, $(16,786, $(17,789, *
* 494) 477) 164) *
* 2001 17,764,264 3.0 *
* (36,545,494)(14,907,611) (17,764,264) *
* 2002 55,914,606 17,764,264 3.0 *
* (59,687,702) (17,764,264) *
* 2003 0 17,764,264 3.0 *
* (57,833,735) (17,764,264) *
* 2004 0 0 10,913,682 3.0 *
* (58,164,264) *
***********************************************************************
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2000 $0 *
* 2001 0 *
* 2002 0 *
* 2003 0 *
* 2004 (47,250,582) *
*****************************************************
Technology Impact
The purchase of personal computers for 3 FTEs would be needed.
Fiscal Analysis
The bill would reduce by 25 percent the fees assessed and collected on
bulk delivery of petroleum products, effective September 1, 1999. The
bill would restrict administrative expenses to an amount specifically
appropriated by the Legislature. The bill would reduce the amount of
unobligated fund balance at which fee collection would cease to $100
million from $125 million.
The bill would extend the expiration date of the Petroleum Storage Tank
(PST) program from September 1, 2001 to September 1, 2003, allowing the
continuation of reimbursements from the Petroleum Storage Tank
Remediation Account-0655 (PSTR Account) to August 31, 2003. The bill
would, however, prohibit fee collections as of March 1, 2002.
The bill would establish an Underground Petroleum Storage Tank Loan
(UPSTL) Program to provide loans to PST owners unable to obtain
conventional financing for removal of leaking tanks and for environmental
contamination remediation. The Texas Natural Resource Conservation
Commission (TNRCC) would set the interest rate and terms for the loan
program.
The bill would establish a new General Revenue-Dedicated Petroleum
Storage Tank Removal Loan Program Account (Loan Account). Money in the
account would consist of legislative appropriations, interest earnings,
payments of principal and interest on loans made under the UPSTL
program, and any other money deposited in the account. Money in the
account could be appropriated for administration of the Loan Account and
the UPSTL program and for providing loans under the UPSTL program.
Methodology
The fees collected on bulk delivery of petroleum products are deposited
in the TNRCC's PSTR Account. Annual revenue from these fees is estimated
to be $146 million. Assuming a twenty-five percent reduction in revenue
collections due to the twenty-five percent reduction in fees assessed
and collected, it is estimated that annual revenues would be reduced by
$36.5 million. The bill would prohibit fee collections as of March 1,
2002 allowing six months of collections in the amount of $55.9 million in
fiscal year 2002.
The extension of the expiration date of the PSTR program to August 31,
2003, is estimated to result in annual reimbursements out of the PSTR
Account of $39.3 million in fiscal year 2002 and 2003.
Funding for the administration of the PST program would be based on
legislative appropriations. It is assumed that the TNRCC will receive
appropriations in fiscal years 2000-01 at the current annual
administration program costs of $7.3 million. The bill would extend the
expiration date of the PST program by two years until the end of fiscal
year 2003. Administrative program costs, to be appropriated by the
Legislature, are assumed to continue at the same levels in fiscal years
2002-03 until the program expires.
The bill would create the UPSTL program that would provide loans for tank
removals and remediations. The TNRCC estimates adding three FTEs to
oversee program administration which is expected to be outsourced. The
TNRCC expects to fund PST remediations for leaking tanks under the PSTR
Program until the program expires on September 1, 2003. The TNRCC also
assumes that the Loan Account would have transfers from the PSTR Account
to fund the Loan Account until funds from the PSTR Account are exhausted
in fiscal year 2003. These transfer amounts would be $16.8 million,
$14.9 million, $13.1 million and $11.2 million in fiscal years 2000,
2001, 2002 and 2003, respectively. In fiscal year 2003, the Loan Account
is assumed to be funded from General Revenue in the amount of $47
million.
The TNRCC estimates that 8,000 PST sites would meet eligibility criteria
for loans under the UPSTL program and 2,000 of these 8,000 PST sites are
expected to have leaking tanks. Of these 2,000 leaking tank sites, 1,600
are expected to be funded from the PST program with the remaining 400
sites to be funded through the UPSTL program.
Tank removals are expected to average $10,000 per site for the 8,000
sites, expected to cost an estimated $80 million in loans over a period
of five years, or $16 million a year. Remediation costs are expected to
average $100,000 per site for the 400 remaining leaking tank sites
expected to be funded from the loan program in fiscal year 2004, at an
estimated cost of $40 million in loans.
The TNRCC expects to set the interest rate for the loan program at 3
percent for ten year terms. At this rate, the Loan Account is expected
to start receiving about a $1 million in fiscal year 2000 and $2.8
million in fiscal year 2001 in principal and interest on loans from the
Loan Account.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 582 Natural Resource Conservation Commission, 304
Comptroller of Public Accounts
LBB Staff: JK, DE, NS