LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 16, 2001
  
  
          TO:  Honorable David Counts, Chair, House Committee on Natural
               Resources
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3528  by Counts (Relating to the consolidation and use
               of certain fees under Chapter 26, Water Code), Committee
               Report 1st House, Substituted
  
**************************************************************************
*  No significant fiscal implication to the State is anticipated.        *
**************************************************************************
  
The bill would create a water quality fee, combining the current waste
treatment inspection and the water quality assessment fees.  The new
water quality fee would be capped at $75,000 for each permit holder.
Currently, the waste treatment inspection fee is capped at $25,000 by
statute, and the water quality assessment fee is capped at $40,000 as set
by agency rule; the bill could result in a fee increase of no more than
$10,000 per permit holder. The bill also would provide greater
flexibility to the Texas Natural Resource Conservation Commission (TNRCC)
in setting water related fees, allowing the agency to set the water
quality fee to cover the reasonable costs of administering and enforcing
a water resource management program reasonably related to the activities
of fee payers.

The bill could result in increased revenues to the General
Revenue-Dedicated Water Resource Management Account No. 153 since it
would raise the current fee cap and allow fees to be set based on
broader criteria than under current law. The amount of additional
revenue would depend on agency needs and legislative appropriations. For
example, passage of the bill could potentially provide a mechanism to
raise sufficient revenue to cover the cost of additional expenses
associated with the development and Total Maximum Daily Loads and the
implementation of watershed action plans. The TNRCC has identified the
need for an additional $3.9 million for this activity during the 2002-03
biennium.
  
Local Government Impact
  
Local governments holding water quality permits could experience cost
increases of up to $10,000 per year, depending on the rate the TNRCC
would set for the water quality permit fee.
  
  
Source Agencies:   580   Texas Water Development Board, 582   Texas
                   Natural Resource Conservation Commission, 304
                   Comptroller of Public Accounts
LBB Staff:         JK, CL, TL