LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 78TH LEGISLATIVE REGULAR SESSION
 
April 29, 2003

TO:
Honorable Phil King, Chair, House Committee on Regulated Industries
 
FROM:
John Keel, Director, Legislative Budget Board
 
IN RE:
HB3336 by Goodman (Relating to authority of the state or local governments to collect reasonable compensation for the use of public property, the creation and funding of the Broadband - Stimulate Provision of Access to Rural Communities fund, and providing for penalties.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB3336, As Introduced: a positive impact of $56,000,000 through the biennium ending August 31, 2005.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2004 $52,000,000
2005 $4,000,000
2006 $4,000,000
2007 $8,500,000
2008 $11,500,000




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1 		Probable Revenue Gain/(Loss) from
Broadband-Stimulate Provision of Access to Rural Communities Fund		 Probable Savings/(Cost) from
Broadband-Stimulate Provision of Access to Rural Communities Fund		 Change in Number of State Employees from FY 2003
2004 $52,000,000 $52,000,000 ($314,007) 3.5
2005 $4,000,000 $4,000,000 ($47,305) 1.0
2006 $4,000,000 $4,000,000 ($47,305) 1.0
2007 $8,500,000 $8,500,000 ($47,305) 1.0
2008 $11,500,000 $11,500,000 ($47,305) 1.0

Fiscal Analysis

The bill would amend the Utilities Code to create the Broadband-Stimulate Provision of Access to Rural Communities Trust Fund.  The bill would impose a one-time fee on broadband service providers using the state right-of-way for the placement of facilities.  The bill would not exceed 25 percent of the fair market rental value for broadband placements prior to September 1, 2003 and no more than 100 percent on or after September 1, 2003.  Fifty percent of the revenue from the fee would be deposited into the General Revenue Fund and 50 percent of the revenue would be deposited into the Broadband-Stimlulate Provision of Access to Rural Communities special trust fund outside of the state treasury with the Comptroller acting as trustee, with interest to be credited to the fund.

Methodology

The Public Utility Commission estimates that the approximate state and county feet available for broadband right-of-way is 418 million feet times the $1 rate per right-of-way foot times 25 percent.  These collections are based upon facilities in existence as of September 1, 2003.  Subsequent to September 1, 2003, the rate will be 100 percent of the fee assessed. 

It is anticipated that $52 million in fiscal year 2004 and $4 million in fiscal year 2005 will be deposited into general revenue.  It is also anticipated that $52 million in fiscal year 2004 and $4 million in fiscal year 2005 will be deposited into a trust fund.  These amounts reflect an estimated one percent growth rate in broadband infrastructure in 2005 and 2006, a 2 percent growth rate in fiscal year 2007, and 3 percent growth rate in fiscal year 2008.

The Public Utility Commision estimates it would incur a total cost of $349,724 to implement the provisions of the bill.  The estimate is based on $335,115 in salaries and benefits for full-time-equivalent positions to write and adopt rules, to administer complaints and resolve disputes, and to administer the program in each subsequent year; $14,609 in other operating expenses for consumables associated with the administrative costs.  The Comptroller of Public Accounts estimates it would incur a total cost of $153,503 to implement the provisions of the bill.  The estimate is based on $140,779 printing and distribution costs of publications relating to the implementation of the bill; $2,400 in costs for implementing new rules, and $10,324 in costs associated with 1-800 line charges for additional incoming calls related to the implementation of the bill. 

It is presumed that all costs indicated above would be paid from the new fund.


Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts, 401 Adjutant General's Department, 473 Public Utility Commission of Texas
LBB Staff:
JK, JRO, WP, JW, KG