LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 13, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB578 by Madla (Relating to the provision of emergency
communication services.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB578, As Introduced: negative impact of $(4,174,294) 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 $(2,321,654) *
* 2003 (1,852,640) *
* 2004 (1,772,666) *
* 2005 (1,570,716) *
* 2006 (1,619,895) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Revenue Savings/(Cost) Savings/(Cost) Number of State *
* Gain/(Loss) from New from General Employees from *
* from New General Revenue Revenue Fund FY 2001 *
* General Revenue Dedicated 0001 *
* Dedicated *
* 2002 $17,790,000 $(20,111,654) $(2,321,654) 2.0 *
* 2003 18,092,000 (19,944,640) (1,852,640) 2.0 *
* 2004 18,400,000 (20,172,666) (1,772,666) 2.0 *
* 2005 18,731,000 (20,301,716) (1,570,716) 2.0 *
* 2006 19,068,000 (20,687,895) (1,619,895) 2.0 *
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Fiscal Analysis
The bill would require the Commission on State Emergency Communications
to install, operate and maintain an Emergency Telephone Call Box System
along roads that are part of the state highway system in cooperation with
the Texas Department of Transportation (TxDOT). In addition, the bill
adds a $1 fee to the annual cost of motor vehicle registration to fund
the call box system. The fee would be deposited to a new General
Revenue-Dedicated Account entitled Emergency Highway Telephone Call Box,
and used to fund the call box program. The bill would require the
Commission on State Emergency Communications to submit a report
concerning call box program activities to be submitted to the Lieutenant
Governor, the Speaker of the House of Representatives, and the
Legislative Budget Board by November 1 of each year.
The bill would also require home-rule municipalities operating
independent 9-1-1 systems to join the statewide 9-1-1 program, an
existing emergency communications district, or form a new emergency
communications district by January 1, 2003.
Finally, the bill requires the Commission on State Emergency
Communications to develop and fully implement the wireless 9-1-1
improvements required by the Federal Communications Commission by
September 1, 2007.
With the exception of the provisions relating to home-rule municipalities
operating independent 9-1-1 systems, this bill would take effect on
September 1, 2001.
Methodology
TxDOT assumes that 39,500 call boxes would be installed between 2002 and
2017, with only 17,675 call boxes installed over the next five fiscal
years. The estimated 39,500 call boxes provide a call box for every two
miles of state highway. Assumptions in estimating the cost include a
cost of $4,000 per call box; a 7 percent knockdown rate with a repair
cost of $1,250 per knockdown; annual air-time costs of $120 per box; a 6
percent vandalism rate with a cost of $300 per vandalized unit; and,
maintenance costs of $300 per unit. Total cost to implement the system
is an estimated $363.9 million. TxDOT estimates annual maintenance and
operation costs, when the system is fully implemented, would be
approximately $27.8 million per year.
The Commission on State Emergency Communications estimates that their
responsibilities under this bill would require the addition of two
Telecommunications Specialist staff and related operating costs. The
initial cost of these positions is $99,727; $96,127 in fiscal year 2003;
and, $98,041 in each fiscal year thereafter.
The $1 fee per motor vehicle registration would generate between $18.0
and $19.0 million per fiscal year in additional revenue. However, this
amount is not sufficient to recover the estimated cost of the call box
program. As a result, it is assumed that the General Revenue Fund would
fund the difference between the revenue generated by the $1 fee and the
cost of the call box program.
The legislation requires home-rule cities to join or form an emergency
communications district, or join the statewide 9-1-1 system by January
2003. Because the home-rule cities may choose between the statewide
9-1-1 system or an emergency communications district, the impact of this
requirement on state revenues is difficult to determine. According to a
recent survey by the Commission on State Emergency Communications of
home-rule municipalities that operate 9-1-1 systems, those home-rule
municipalities responding to the survey estimated emergency and wireless
service fee collections of $17.7 million for 2000. Although all
home-rule cities receive a distribution of wireless service fees based
on their share of the state's population, not all home-rule
municipalities that operate 9-1-1 systems levy and collect the emergency
service fee. According to the Commission on State Emergency
Communications, some home-rule cities fund 9-1-1 system costs
exclusively with local revenue sources (e.g., property and sales taxes).
Local Government Impact
One of the requirements in requiring home-rule cities to join or form an
emergency communications district or join the statewide 9-1-1 system
would be a 3 percent cap placed on the fee charged for 9-1-1 services.
The cities of Plano and Dallas were contacted regarding local fiscal
impact. An official with the City of Plano said that the 3 percent cap
on fees would result in a revenue loss of over $100,000 per year through
only their predominant carrier. There would be additional loss for the
city per carrier. Anticipated gain in revenue through increased
business would not offset their losses, according to the city emergency
communications representative. Officials in Dallas commented when the
proposals were presented in a report on interim charges by the Senate
Subcommittee on State Emergency Communications that their system would
experience a major revenue loss. At least four of the home-rule cities
that operate a 9-1-1 system currently charge 6 percent of the base rate
and one charges 8 percent. Those cities would lose half of their revenue
or more.
Source Agencies: 477 Commission on State Emergency Communications,
601 Texas Department of Transportation, 304
Comptroller of Public Accounts
LBB Staff: JK, JO, MF, ZS, DB