LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 11, 2001 TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: SB1652 by Bernsen (Relating to the funding and operation of certain emergency management and disaster relief programs.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1652, As Introduced: negative impact of $(18,853,632) 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 Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(8,854,862) * * 2003 (9,998,770) * * 2004 (9,787,770) * * 2005 (9,570,770) * * 2006 (9,345,770) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Savings/ Savings/ Revenue Savings/ Number of * * (Cost) from (Cost) from Gain/(Loss) (Cost) from State * * General Disaster from Disaster Employees * * Revenue Contingency assessment Management from FY 2001 * * Fund Account/ to Disaster Fund in the * * 0001 GR- Management Texas * * Dedicated Fund in the Treasury * * 0453 Texas Safekeeping * * Treasury Trust * * Safekeeping Company * * Trust * * Company * * 2002 $5,556,000 16.0 * * $(8,854,862)$(2,480,455) $(5,556,000) * * 2003 (9,998,770) 0 6,722,000 (6,722,000) 16.0 * * 2004 (9,787,770) 0 6,933,000 (6,933,000) 16.0 * * 2005 (9,570,770) 0 7,150,000 (7,150,000) 16.0 * * 2006 (9,345,770) 0 7,375,000 (7,375,000) 16.0 * *********************************************************************** Technology Impact Technology impact would be limited to microcomputers, related equipment and software. The cost of these additional items is estimated to be $44,706. Fiscal Analysis The bill would establish a Disaster Management Fund to provide disaster assistance to victims and political subdivisions when there is no Presidential disaster declaration or a Presidential declaration does not address certain categories of assistance. The Disaster Management Fund would be a trust fund in the Texas Treasury Safekeeping Trust Company. The fund would be used to pay the administrative expenses of the Emergency Management Service (EMS) within the Department of Public Safety for expenses related to emergency management training for state agencies and political subdivisions, expenses incurred in implementation of statewide mutual aid assistance, and expenses for implementation of a statewide notification system. The bill would abolish General Revenue-Dedicated Account No. 453, Disaster Contingency and transfer any unexpended balance in the account to the new trust fund. The bill would authorize a new utility assessment for emergency management and disaster relief equal to one-thirteenth of 1 percent of the gross receipts of the rates charged to consumers in the state. The Comptroller would collect and deposit the assessment, including any fees, penalty or interest to the Disaster Management Fund. In addition, the legislature could make appropriations to the Fund. The bill would take effect immediately if it receives a vote of two-thirds of all the members elected to each house, otherwise it would take effect September 1, 2001. Methodology The Division of Emergency Management (EMS) estimates that the implementation of the bill would have the following costs to the state: a) debris removal, repair or replacement of highways or streets, and water control structures would cost the state $6,525,785 annually b) assistance to individuals and households would cost $1,419,431 annually c) post-disaster mitigation would cost $1,589,043 annually d) the state and local government training program authorized would cost $2,078,000 annually e) the implementation of a statewide notification system would cost $800,000 annually f) a 50 percent cost share with cities and counties for cost incurred on public assistance projects eligible for federal disaster assistance would cost $2,117,413 annually g) crisis counseling and competitive grants would cost $464,500 annually. It is estimated that implementing the provisions of this bill would require 16 additional positions in the Division of Emergency Management of the Department of Public Safety to administer the funds and provide the aid and training specified. Two Program Administrators, one Planner, one Emergency Technician, two Administrative Technicians I, two Accounting Clerks IV, one Auditor, and two Administrative Technicians II would be responsible for the administrative responsibilities of the bill. Five Program Specialists II would be stationed in the field and provide mutual aid assistance and emergency management training. The annual salary expense for the new positions would be $365,444 with associated benefit costs of $103,347. Ongoing costs related to travel, rent and operating costs total $257,807 annually. One-time costs for equipment and technology purchases in the first year total $170,547. On a recurring basis, the cost to EMS of implementing the provisions of this bill is $726,598. The Comptroller's Office assumes that the proposed assessment would apply to retail electric providers, electric cooperatives and municipally-owned electric utilities. Using this assumption, the assessment would generate approximately $6,722,000 in fiscal year 2003 and grow by 3 percent in each fiscal year remaining in the five year forecast period. The remaining amounts needed to fund projected expenses would come from the General Revenue Fund, and during the first year, a transfer from the unexpended balance in the Disaster Contingency Account, which is abolished by this legislation. Although the Comptroller's Office reports no balance in the General Revenue-Dedicated Disaster Contingency Account No. 453, the Governor's Office reports a balance of $2,480,455 as of February 2001. For purposes of this analysis, it is assumed that this balance is transferred to the new Disaster Management Account on September 1, 2001. Local Government Impact The bill would authorize reimbursements to local jurisdictions for eligible damages due to disasters not declared by the President where a Presidential declaration does not cover certain areas of assistance. The majority of the amounts available would be passed through to local governmental entities or citizens. Source Agencies: 301 Office of the Governor, 473 Public Utility Commission of Texas, 475 Office of Public Utility Counsel, 576 Texas Forest Service, 405 Texas Department of Public Safety, 304 Comptroller of Public Accounts LBB Staff: JK, SD, MF, ZS