LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 10, 2001 TO: Honorable Warren Chisum, Chair, House Committee on Environmental Regulation FROM: John Keel, Director, Legislative Budget Board IN RE: HB1900 by Turner, Sylvester (Relating to waste tire enforcement and cleanup; requiring a fee.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1900, As Introduced: positive impact of $0 through the biennium * * ending August 31, 2003. * * * * 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 * * 2002 $0 * * 2003 0 * * 2004 0 * * 2005 0 * * 2006 0 * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Revenue Probable Change in Number of * * Year Gain/(Loss) from Savings/(Cost) from State Employees from * * Waste Tire Waste Tire FY 2001 * * Enforcement and Enforcement and * * Cleanup Account/ Cleanup Account/ * * GR-Dedicated GR-Dedicated * * 5001 5001 * * 2002 $42,848,000 $(972,298) 11.0 * * 2003 44,562,000 (846,848) 11.0 * * 2004 46,344,000 (846,848) 11.0 * * 2005 48,198,000 (846,848) 11.0 * * 2006 50,126,000 (846,848) 11.0 * ************************************************************************** Technology Impact The bill would require the purchase of 11 new computers and related software and equipment for new positions. In addition, the Comptroller anticipates one-time programming costs of $12,230 to modify existing automated fee system to implement the provisions of this bill. Fiscal Analysis This bill would amend Chapter 361 of the Health and Safety Code to rename General Revenue-Dedicated Account No. 5001, Waste Tire Recycling to General Revenue-Dedicated Account No. 5001, Waste Tire Enforcement and Cleanup. The Comptroller's Office would be responsible for collection of the waste tire enforcement and cleanup fee. A $2.00 fee per tire would be collected from a wholesale or retail tire dealer who sold, or offered to sell, new tires not for resale with a rim diameter equal to or greater than 12 inches but less than 26 inches. The bill would allow a retailer to retain 2-1/2 cents from each fee the dealer collected, and the dealer would have to list the fee as a separate item on an invoice. The Comptroller would determine how dealers would account for the amount retained. The bill would require the fees collected to be deposited to the credit of the account. Dealers would have to remit fee collections on a monthly basis, but dealers that collected less than $50 per month or less than $150 per calendar quarter could file a quarterly report and remittance with the Comptroller. The bill would require dealers to maintain an invoice or other record for four years after the date on which the invoice or record was prepared. A penalty equal to 5 percent of the amount of the fee due would apply if a person failed to file a report or failed to remit money. An additional penalty would apply for failure to report or remit the fee by the 30th day after the date the fee was due. The Texas Natural Resource Conservation Commission (TNRCC) would administer the account. The bill would allow appropriations from the account to be made to local governments for the enforcement of waste tire laws and programs dedicated to the cleanup of waste tires. TNRCC could keep up to 6 percent of the annual fees collected, and the Comptroller up to 2 percent, for the reasonable and necessary administrative costs of performing necessary duties. The bill would grant local governments the authority to regulate the disposal of waste tires and adopt a program to address the problems created by improper waste tire disposal. This bill would take effect September 1, 2001. Methodology Based on the number of scrap tires in Texas in calendar year 2000, and the growth rate from the previous waste tire recycling programs, the Comptroller estimates additional revenue collections to the Waste Tire Enforcement and Clean Up Account of $42.8 million in fiscal year 2002 and a four percent increase in revenue collections in each fiscal year thereafter. Additional costs to the Comptroller in collecting the fee are $224,829 in the first year, and $187,379 on a recurring basis. Although the Comptroller's office anticipates this will require an increase in FTEs, it is assumed that any additional FTEs can be absorbed within the agency's existing FTE cap. The TNRCC anticipates the administrative costs of this new program to be $747,469 in fiscal year 2002, and $659,469 in recurring costs. This cost includes 11 FTEs that would be responsible for allocating funds to local governments for waste tire enforcement and clean up projects. Local Government Impact Based on the provisions of this bill, local governments would be eligible to receive an estimated $42.8 million in grant funds each year for the enforcement of waste tire laws and the clean up of waste tire sites. Source Agencies: 582 Texas Natural Resource Conservation Commission, 304 Comptroller of Public Accounts LBB Staff: JK, CL, ZS