LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 11, 2001
TO: Honorable J.E. "Buster" Brown, Chair, Senate Committee on
Natural Resources
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2687 by Junell (Relating to the program for the
regulation and remediation of underground and aboveground
storage tanks.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2687, As Engrossed: positive impact of $4,107,000 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 $1,930,000 *
* 2003 2,177,000 *
* 2004 1,804,000 *
* 2005 1,869,000 *
* 2006 970,000 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Revenue Revenue Savings/(Cost) Number of State *
* Gain/(Loss) Gain/(Loss) from Petroleum Employees from *
* from General from Petroleum Storage Tank FY 2001 *
* Revenue Fund Storage Tank Remediation *
* 0001 Remediation Account/ *
* Account/ GR-Dedicated *
* GR-Dedicated 0655 *
* 0655 *
* 2002 $1,930,000 $94,554,000 $(94,554,000) 0.0 *
* 2003 2,177,000 106,659,000 (106,659,000) 4.0 *
* 2004 1,804,000 88,387,000 (88,387,000) 3.0 *
* 2005 1,869,000 91,592,000 (91,592,000) (5.0) *
* 2006 970,000 47,525,000 (47,525,000) (12.0) *
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Fiscal Analysis
The bill extends the petroleum product delivery fee, but specifies a
declining fee schedule. Based on the substitute, the declining rates for
deliveries to smaller tanks are as follows:
*$12.50 per delivery to tanks with capacity NTE 2,500 gallons in fiscal
years 2002 and 2003;
*$10 per delivery to tanks with capacity NTE 2,500 gallons in fiscal
years 2004 and 2005;
*$4 per delivery to tanks with capacity NTE 2,500 gallons in fiscal year
2006; and
*$2 per delivery to tanks with capacity NTE 2,500 gallons in fiscal year
2007.
Similar declining rate schedules are established for deliveries to tanks
with greater capacity. The overall reduction from the comparable rates
currently authorized by statute to the proposed rate schedule is as
follows:
*a 33 percent decrease in fiscal years 2002 and 2003;
*a 47 percent decrease in fiscal years 2004 and 2005;
*a 73 percent decrease in fiscal year 2006; and
*an 89 percent decrease in fiscal year 2007.
The bill continues the reimbursement program for clean up and remediation
of petroleum storage tanks from September 1, 2003 to September 1, 2006.
The reimbursement program would expire September 1, 2006. However, no
reimbursement can be received for corrective action performed after
September 1, 2005, and no claim received after March 1, 2006 may be
reimbursed by the agency. Further, the substitute establishes additional
deadlines for responsibility parties seeking reimbursement for clean up
costs. The current requirement that the site be reported to the TNRCC on
or before December 22, 1998 remains. However, now a complete site and
risk assessment must be received by TNRCC by September 1, 2002;
corrective action plans required by TNRCC for certain sites must be
submitted by September 1, 2003; the action plans must be initiated and
progressing on a timely basis by March 1, 2004; and, all requests for
closures of sites not requiring a corrective action plan must be received
by September 1, 2005.
The bill deletes the requirement that collection of the petroleum product
delivery fee be suspended when the unobligated balance in the Petroleum
Storage Tank Remediation (PSTR) Account No. 0655 equals or exceeds $100.0
million.
The bill increases the amount of fees that can be spent on the
administrative costs of the Texas Natural Resource Conservation
Commission (TNRCC) from 6.7 to 11.8 percent of revenue collections
during the 2002-03 biennium, to 16.4 percent of revenue collections
during the 2004-05 biennium, and to 21.1 percent of revenue collections
during the 2006-07 biennium.
The Water Code, Section 26.3574 provides for an administrative fee equal
to 2 percent of the amount of the petroleum products delivery fee
collected to be deposited to the General Revenue Fund as a fee for
service charge.
Methodology
Based on projections provided by the Comptroller's Office, the fee would
generate an average of $95.3 million per year. Based on this revenue
estimate and the increase in the percent of fees allowed to be used for
administration, the amounts available to TNRCC for administrative costs
grow from $11.2 million in fiscal year 2002 to $15.0 million in fiscal
year 2005, and declines in fiscal year 2006 to $10.0 million.
Based on information provided by the TNRCC, groundwater sampling and
financial assurance reviews for the PSTR program would be privatized.
This combined with the assumption that all reimbursements for eligible
sites will be received by March 1, 2006, results in a net decrease in the
positions funded by the administrative allocation from PSTR Account No.
0655. Based on current law, 82 of the 92 positions currently funded by
the 6.7 percent administrative allocation would be eliminated during the
2002-03 biennium. However, for purposes of this analysis, it is assumed
that funding for these 92 positions is restored by the 2002-03
appropriations bill as proposed in the Committee Substitute for Senate
Bill 1. Finally, it is assumed that the phase out of positions funded by
the administrative allocation from PSTR Account No. 0655 would start in
fiscal year 2006, during which 12 positions would be eliminated, and
continue through fiscal year 2007, with all remaining positions
eliminated by March 2007.
Assuming an average cost per clean up of $60,800 per site, it is
estimated that approximately all remaining sites eligible for
reimbursement for clean up costs, or a total of 6,167 sites, could be
reimbursed between September 1, 2002 and March 1, 2006.
Based on existing law, petroleum product delivery fees will no longer be
collected and deposited to the PSTR Account No. 0655. Since no further
revenues are expected to be received, a 2 percent service charge
authorized by the Water Code to reimburse the Comptroller for
administrative costs and deposited to the General Revenue Fund would no
longer be collected. However, the reinstatement of petroleum product
delivery fee collections, as proposed by this substitute, would result
in an annual average revenue gain to the General Revenue Fund of
$1,750,000 between fiscal years 2002 and 2006.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 582 Texas
Natural Resource Conservation Commission
LBB Staff: JK, CL, ZS, TL