LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 25, 2001
TO: Honorable James E. "Pete" Laney, Speaker of the House,
House of Representatives
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1902 by Turner, Sylvester (Relating to the purposes
for which the system benefit fund may be used.), As
Passed 2nd House
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1902, As Passed 2nd House: negative impact of $(321,048,000) *
* 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(152,055,000) *
* 2003 (168,993,000) *
* 2004 (172,960,000) *
* 2005 (177,236,000) *
* 2006 (181,619,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) *
* Year from General Revenue Fund from General Revenue Dedicated *
* 0001 (System Benefit Fund) *
* 2002 $(152,055,000) $164,579,000 *
* 2003 (168,993,000) 168,993,000 *
* 2004 (172,960,000) 172,960,000 *
* 2005 (177,236,000) 177,236,000 *
* 2006 (181,619,000) 181,619,000 *
***************************************************************************
Fiscal Analysis
The bill would amend the Utilities Code Section 39.901 to clarify the
calculation of school funding loss attributable to electric utility
restructuring. The bill would specify the formula to be used in
calculating the net statewide loss between 1999 and the current year
electric generating facility appraisal roll values. The calculation
would include both statewide value gains and losses to determine the
statewide net loss. The bill would require the Comptroller of Public
Accounts to certify the statewide net loss in electric generating
facility property value to the Texas Education Agency (TEA) by August
31st of each year.
The bill would specify the formula to be used by TEA in determining the
amount necessary to compensate the state for the statewide net loss
certified by the Comptroller. The bill would cap the total property value
gains at 30 percent of the property value losses for the calculation of
the statewide net loss through May 31, 2003. The bill would require TEA
to notify the Public Utility Commission (PUC) of the reimbursement due
the state, and a transfer from the System Benefit Fund in that amount
would be made by May 1st of each year.
The bill would amend Utilities Code Section 39.903 and create the System
Benefit Fund as an account in the General Revenue Fund to be used only
for specified purposes. The PUC would be able to assess a fee for the
System Benefit Fund of up to 65 cents per megawatt hour. The bill would
prioritize the uses of the System Benefit Fund to be 1) a 10 percent
customer discount for low-income customers, 2) customer education
programs and administrative costs of the PUC and the Office of Public
Utility Counsel (OPUC), 3) weatherization programs targeted at low-income
customers, 4) school funding loss, and 5) a 20 percent customer discount
for low-income customers. According to TEA, the bill would hold the
state harmless for property declines due to electric restructuring, while
other provisions in law hold individual school districts harmless for
losses in their specific districts. However, according to the
Comptroller, because the listing of priorities makes school funding
fourth in priority, it is possible that no money would remain in the fund
to reimburse the Foundation School Fund.
The bill would take effect immediately or on September 1, 2001.
Methodology
The bill would make the System Benefit Fund a dedicated account within
the General Revenue Fund. The General Appropriations Act appropriates
$144,617,875 in fiscal year 2002 and $161,098,949 in fiscal year 2003.
The Public Utility Commission estimates and increase of $12.5 million in
2001 to the System Benefit Fund due to the 65 cent assessment rate being
applicable to the entire year. Formerly, the rate started on January 1,
2002.
According to TEA, the bill would hold the Foundation School Fund harmless
for net property declines (losses and gains in property values) due to
electric restructuring. Current law only takes value declines into
account while this bill would include property value gains as well to
arrive at a net loss. However, according to the Comptroller, because the
listing of funding priorities of the System Benefit Fund makes Foundation
School Fund reimbursement fourth in priority, it is possible that no
money would remain in the fund to reimburse the Foundation School Fund
for net property value declines due to electric restructuring.
The Texas Education Agency estimates that the calculation formulas in the
bill, had they been in effect in 2000, would possibly have resulted in a
lesser reimbursement to the Foundation School Fund in 2001 (a payment of
nearly $66 million was made on May 1, 2001) due to the inclusion of
property value gains in the calculations.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 701 Texas Education Agency, 473 Public Utility
Commission of Texas, 304 Comptroller of Public
Accounts
LBB Staff: JK, JO, RT, KM