BILL ANALYSIS

C.S.H.B. 7

By: Darby

Appropriations

Committee Report (Substituted)

BACKGROUND AND PURPOSE

For more than 20 years, certain unspent dedicated revenue in the general revenue fund has counted toward overall budget certification. There is concern that these amounts have grown substantially during that time, and there are additional concerns regarding allocations from the system benefit fund. C.S.H.B. 7 seeks to address the amounts, availability, and use of certain statutorily dedicated revenue and accounts and to reduce or affect the amounts or rates of certain statutorily dedicated fees and assessments.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the Public Utility Commission of Texas in SECTIONS 15, 17, and 23 and to the Health and Human Services Commission in SECTION 17 of this bill.

ANALYSIS

C.S.H.B. 7 amends the Government Code to require the Legislative Budget Board (LBB) to develop and implement a process to review new legislative enactments that create dedicated revenue and the appropriation and accumulation of dedicated revenue and available dedicated revenue; to develop and implement tools to evaluate the use of available dedicated revenue for state government financing and budgeting; and to develop specific and detailed recommendations on actions the legislature may reasonably take to reduce state government's reliance on available dedicated revenue for the purpose of budget certification by the comptroller of public accounts. The bill requires the LBB to incorporate into its budget recommendations appropriate measures to reduce state government's reliance on available dedicated revenue for the purpose of budget certification, to include with those budget recommendations plans for further reducing state government's reliance on available dedicated revenue for those purposes for the succeeding six years, and to consult with the comptroller as necessary to accomplish these requirements.

C.S.H.B. 7 makes available for any general governmental purpose all interest or other earnings that accrue on all revenue held in an account in the general revenue fund any part of which are available for budget certification and requires the comptroller to deposit the interest and earnings to the credit of the general revenue fund. This reallocation of interest does not apply to interest or earnings on revenue deposited in special depository banks designated by the governing boards of each state institution of higher education or to interest or earnings on deposits of federal money the diversion of which is specifically excluded by federal law.

C.S.H.B. 7 amends the Health and Safety Code to reduce the solid waste disposal fees charged by the Texas Commission on Environmental Quality (TCEQ) as follows:

· from $1.25 to 94 cents per ton received for disposal at a municipal solid waste landfill for solid waste measured by weight;

· from 40 cents to 30 cents per cubic yard received for disposal at a municipal solid waste landfill for compacted solid waste measured by volume; and

· from 25 cents to 19 cents per cubic yard received for disposal at a municipal solid waste landfill for uncompacted solid waste measured by volume.

The bill prohibits TCEQ from charging such a fee for source separated materials, rather than only source separated yard waste materials, that are processed at a composting and mulch processing facility, rather than just a composting facility. The bill requires TCEQ to credit any such fee payment due for any material received and processed to mulch product, in addition to compost product. The bill excludes a mulch product or compost product produced at a processing facility that is used in the operation of the facility or is disposed of in a landfill from the fee exemption instead of excluding any compost product for composting that is not used as compost and is deposited in a landfill.

C.S.H.B. 7 increases from 50 to 66.7 the percentage of revenue received by TCEQ from solid waste disposal and transportation fees to be dedicated to certain TCEQ programs and support activities related to those programs and certain activities that will enhance the state's solid waste management program. The bill includes site remediation programs among the programs. The bill decreases from 50 to 33.3 the percentage of the same revenue received by TCEQ to be dedicated to local and regional solid waste projects consistent with regional plans approved by TCEQ and to update and maintain those plans.

C.S.H.B. 7 adds a temporary provision, set to expire September 30, 2014, to authorize money in the hazardous and solid waste remediation fee account attributable to fees imposed on the sale of batteries to be used for environmental remediation at the site of a closed battery recycling facility located in the municipal boundaries of a municipality if the municipality submits to TCEQ a voluntary compliance plan for the site and is paying or has paid for part of the costs of the environmental remediation of that site.

C.S.H.B. 7 authorizes money in the 9-1-1 services fee fund to be appropriated to the Texas A&M Forest Service for providing assistance to volunteer fire departments under the Rural Volunteer Fire Department Assistance Program. The bill authorizes money collected from the 9-1-1 emergency services fee for wireless telecommunications connections to be used for such purpose, in addition to being used for services related to 9-1-1 services.

C.S.H.B. 7 authorizes money in the designated trauma facility and emergency medical services account to be appropriated to the Texas Higher Education Coordinating Board for graduate-level medical education programs or nursing education programs, in addition to other approved purposes.

C.S.H.B. 7 amends the Insurance Code to change the comptroller's assessment against all applicable insurers for rural fire protection from a combined total of $30 million for each 12-month period to amounts for each state fiscal year necessary, as determined by the commissioner of insurance, to collect a combined total equal to the total amount that the General Appropriations Act appropriates from the volunteer fire department assistance fund account in the general revenue fund for that state fiscal year.

C.S.H.B. 7 amends the Natural Resources Code to expand the authorized uses of money in the oil and gas regulation and cleanup fund to include the study and evaluation of electronic access to geologic data and surface casing depths necessary to protect usable groundwater in the state. The bill requires money from certain fees collected by the Railroad Commission of Texas with regard to a letter of determination stating the total depth of surface casing for an oil or gas well to be deposited in the oil and gas regulation and cleanup fund and removes the provision authorizing money collected from a fee for processing a request to expedite a letter of determination to be used specifically to study and evaluate electronic access to geologic data and surface casing depths necessary to protect usable groundwater.

C.S.H.B. 7 amends the Transportation Code to require the comptroller to monitor transfers to and from the Texas emissions reduction plan fund, in addition to establishing a record of the amount of title application fees deposited to the credit of the Texas Mobility Fund. The bill authorizes the comptroller to require the Texas Department of Motor Vehicles (TxDMV), rather than directly requiring TxDMV, to remit certain fee amounts monthly to the comptroller for deposit to the credit of the Texas emissions reduction plan fund, changes the current remittance amount to a cap, and conditions that capped amount on it being an amount of money that the comptroller determines is necessary to meet amounts appropriated from the Texas emissions reduction plan fund or, after consultation with TCEQ, if a fee is imposed on stationary sources in a county located in a severe or extreme ozone nonattainment area as provided by federal law, an amount of money not to exceed the amount of the total of the additional $5 collected in fees that is attributable to applicants for titles, other than the state or political subdivisions thereof, who reside in a county located in a nonattainment area or in an affected county, as that term is defined for purposes of the Texas emissions reduction plan. The bill authorizes the Texas Transportation Commission to designate for congestion mitigation projects or for deposit to the Texas rail relocation fund eligible amounts retained in the state highway fund because the amounts were not required to be remitted to the comptroller.

C.S.H.B. 7 requires the comptroller, not later than September 30, 2013, to eliminate all dedicated accounts established for specialty license plates and to set aside the balances of those dedicated accounts so that the balances may be appropriated only for the purposes intended as provided by the dedications. The bill requires the portion of a fee payable as related to specialty license plates for general distribution that is designated for deposit to a dedicated account, on and after September 1, 2013, to be paid instead to the credit of an account in a trust fund created by the comptroller outside the general revenue fund. The bill requires the comptroller to administer the trust fund and accounts and authorizes the comptroller to allocate the corpus and earnings on each account only in accordance with the dedications of the revenue deposited to the trust fund accounts.

C.S.H.B. 7 amends the Utilities Code to require the Public Utility Commission of Texas (PUC) to adopt and enforce rules requiring transmissions and distribution utilities to establish a low-income electric customers program fund under PUC oversight, in replacement of existing rules regarding programs to assist low-income electric customers on the introduction of customer choice. The bill requires the rules to provide for the fund to be established as a trust fund outside of the state treasury, for the fund to be held by an administrator selected by the transmission and distribution utilities in accordance with standards adopted by the PUC, and for any interest earned on money in the fund to be credited to the fund. The bill establishes that the administrator serves as trustee of the fund for the benefit of low-income electric customer programs described by the bill and authorizes the administrator, in accordance with PUC rules, to make any payments or reimbursements from the low-income electric customers program fund to further the programs. The bill requires PUC rules to prescribe the maximum percentage of money available in the fund that may be used for the expenses of administering the fund and for annual independent auditing of the fund and expenditures and other transactions related to the fund. The bill authorizes the PUC or its agents at any time to examine any records related to the fund or investigate any fund-related expenditures or expenses. The bill requires the administrator and each transmission and distribution utility to cooperate fully with any investigation regarding the fund conducted by the PUC or its agents. The bill requires the PUC by rule to impose a nonbypassable low-income electric customers program fund fee to be set by the PUC in an amount capped at 50 cents per megawatt hour, allocated to customers based on the amount of kilowatt hours used. The bill requires the PUC to provide for a nonbypassable fee in the same amount as that nonbypassable low-income electric customers program fund fee to be imposed on the retail electric customers of a municipally owned utility or electric cooperative beginning on the first day of the sixth month preceding the date on which the utility or cooperative implements customer choice. The bill requires adopted PUC rules to provide that the low-income electric customers program fund fees collected for the applicable programs are collected through the rates of the transmission and distribution service providers and deposited into the low-income electric customers program fund.

C.S.H.B. 7 authorizes money in the low-income electric customers program fund only for spending and allocation as follows:

· not more than 96 percent of the money available in the fund must be used to provide a 15 percent reduced rate for low-income households;

· not more than four percent of the money available in the fund must be used for bill payment assistance for residential customers who have a person permanently residing in the person's home who is diagnosed by a physician as being dependent on an electric-powered medical device to sustain life and who have total household incomes not to exceed 400 percent of the federal poverty guidelines;

· money appropriated for the purposes of programs to assist low-income electric customers by providing weatherization or other energy efficiency programs and transferred to the fund may be used to finance low-income electric customer weatherization programs, to be operated by a statewide network of federal weatherization program providers under federal weatherization program guidelines, including related low-income energy efficiency programs.

C.S.H.B. 7 makes certain provisions relating to the system benefit fund applicable to the low-income electric customers program fund, including those relating to a retail electric provider's determination of a reduced rate for eligible customers to be discounted off the standard retail service package and the establishment of a similar reduced rate by municipally owned utilities and electric cooperatives, with those rate reductions to be paid by the low-income electric customers program fund. The bill requires the PUC to require a retail electric provider to apply the same rate reduction to any rate plan under which an eligible low-income electric customer is receiving service and revises the minimum reduction amounts and the contingencies available should the low-income electric customers program fund be insufficient to pay for the rate reductions. Such contingencies include increasing the fee amount to its 50-cent cap and reducing the reduction rate, depending on the circumstances. The bill revises provisions relating to the reimbursement of a retail electric provider, a municipally owned utility, or electric cooperative from the low-income electric customers program fund and relating to the adoption of rules providing for methods of enrolling customers eligible to receive the reduced rates and governing the bill payment assistance program.

C.S.H.B. 7 prohibits the imposition of the low-income electric customers program fund fee after August 31, 2023, and after that date requires the PUC and the fund administrator to undertake to continue the low-income electric customers program until the balance of the fund is exhausted.

C.S.H.B. 7 authorizes money in the system benefit fund for appropriation only for the purposes provided by provisions governing the system benefit fund, to the exclusion of other law. The bill decreases from 65 to two cents per megawatt hour the cap on the nonbypassable fee set by the PUC that finances the system benefit fund. The bill requires the PUC to adopt rules providing for reimbursements from appropriated system benefit fund money for certain authorized activities. The bill removes from the regulatory purposes for which money in the system benefit fund is authorized for appropriation certain programs relating to assisting low-income electric customers, which are now accounted for by the low-income electric customers program fund, with the exception of programs to assist low-income electric customers by providing weatherization programs, in addition to other energy efficiency programs that replace certain targeted energy efficiency programs. The bill removes a provision prioritizing the authorized regulatory purposes with respect to appropriations from the system benefit fund.

C.S.H.B. 7 authorizes the legislature to appropriate from the system benefit fund not more than $50 million each state fiscal biennium for the purposes of weatherization or other energy efficiency programs for low-income electric customers and requires money appropriated for those purposes to be transferred to the low-income electric customers program fund for disbursement.

C.S.H.B. 7 requires the PUC by rule to provide for an integrated eligibility process for customer service discounts under the low-income electric customers program fund, rather than the system benefit fund, and requires the PUC to adopt or revise, as necessary to implement the bill, rules governing the system benefit fund and the low-income electric customers program fund, both existing and added by the bill, not later than January 1, 2014.

C.S.H.B. 7 amends the Water Code to add temporary provisions, set to expire September 1, 2021, to require TCEQ to prepare an annual report regarding the status of corrective actions for sites reported to TCEQ under provisions regarding underground and aboveground storage tanks as having had a release needing corrective actions and to issue the report to the legislature on or before November 1 of each year. The bill sets out the required contents of the report regarding sites reported to TCEQ as having had a release needing corrective action on or before December 22, 1998, and that remain in the TCEQ PST State-Lead Program on September 1, 2013, and regarding sites reported to TCEQ as having had a release needing corrective action after December 22, 1998, for which TCEQ has elected to assume responsibility for undertaking corrective action. The bill requires TCEQ to investigate the amount of fees that would be necessary to cover the costs necessary to conclude programs and activities relating to water quality control for underground and aboveground storage tanks before September 1, 2021. The bill requires TCEQ to include in the annual report the conclusions of the investigation and TCEQ's recommendations regarding the fees and programs and activities.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2013.

COMPARISON OF ORIGINAL AND SUBSTITUTE

While C.S.H.B. 7 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.

INTRODUCED

HOUSE COMMITTEE SUBSTITUTE

SECTION 1. Chapter 322, Government Code, is amended by adding Section 322.024 to read as follows:

Sec. 322.024. REDUCTION OF RELIANCE ON AVAILABLE DEDICATED REVENUE FOR BUDGET CERTIFICATION. (a) In this section, "available dedicated revenue" means revenue that Section 403.095 makes available for certification under Section 403.121.

(b) The board shall:

(1) develop and implement a process to review:

(A) new legislative enactments that create dedicated revenue; and

(B) the appropriation and accumulation of dedicated revenue and available dedicated revenue;

(2) develop and implement tools to evaluate the use of available dedicated revenue for state government financing and budgeting; and

(3) develop specific and detailed recommendations on actions the legislature may reasonably take to reduce state government's reliance on available dedicated revenue for the purposes of certification under Section 403.121 as authorized by Section 403.095.

(d) The board shall consult the comptroller as necessary to accomplish the objectives of Subsections (b) and (c).

SECTION 1. Chapter 322, Government Code, is amended by adding Section 322.024 to read as follows:

(b) The board shall:

(1) develop and implement a process to review:

(A) new legislative enactments that create dedicated revenue; and

(B) the appropriation and accumulation of dedicated revenue and available dedicated revenue;

(2) develop and implement tools to evaluate the use of available dedicated revenue for state government financing and budgeting; and

(c) The board shall incorporate into the board's budget recommendations appropriate measures to reduce state government's reliance on available dedicated revenue for the purposes of certification under Section 403.121 as authorized by Section 403.095 and shall include with the budget recommendations plans for further reducing state government's reliance on available dedicated revenue for those purposes for the succeeding six years.

(d) The board shall consult the comptroller as necessary to accomplish the objectives of Subsections (b) and (c).

SECTION 2. Subchapter F, Chapter 403, Government Code, is amended by adding Section 403.0956 to read as follows:

Sec. 403.0956. REALLOCATION OF INTEREST ACCRUED ON CERTAIN DEDICATED REVENUE. Notwithstanding any other law, all interest or other earnings that accrue on all revenue held in an account in the general revenue fund any part of which Section 403.095 makes available for certification under Section 403.121 are available for any general governmental purpose, and the comptroller shall deposit the interest and earnings to the credit of the general revenue fund. This section does not apply to interest or earnings on revenue deposited in accordance with Section 51.008, Education Code.

SECTION 2. Subchapter F, Chapter 403, Government Code, is amended by adding Section 403.0956 to read as follows:

(1) interest or earnings on revenue deposited in accordance with Section 51.008, Education Code; or

(2) interest or earnings on deposits of federal money the diversion of which is specifically excluded by federal law.

SECTION 3. Section 361.013(a), Health and Safety Code, is amended to read as follows:

(a) Except as provided by Subsections (e) through (i), the commission shall charge a fee on all solid waste that is disposed of within this state. The fee is 94 cents [~~$1.25~~] per ton received for disposal at a municipal solid waste landfill if the solid waste is measured by weight. If the solid waste is measured by volume, the fee for compacted solid waste is 30 [40] cents per cubic yard and the fee [~~or,~~] for uncompacted solid waste is 19 [~~, 25~~] cents per cubic yard received for disposal at a municipal solid waste landfill. The commission shall set the fee for sludge or similar waste applied to the land for beneficial use on a dry weight basis and for solid waste received at an incinerator or a shredding and composting facility at half the fee set for solid waste received for disposal at a landfill. The commission may charge comparable fees for other means of solid waste disposal that are used.

SECTION 3. Sections 361.013(a) and (f), Health and Safety Code, are amended to read as follows:

(f) The commission may not charge a fee under Subsection (a) for source separated [~~yard waste~~] materials that are processed [~~composted~~] at a composting and mulch processing facility, including a composting and mulch processing facility located at a permitted landfill site. The commission shall credit any fee payment due under Subsection (a) for any material received and processed [~~converted~~] to compost or mulch product at the facility [~~for composting through a composting process~~]. Any compost or mulch product that is produced at a [~~for~~] composting and mulch processing facility that is [~~not~~] used in the operation of the facility or is disposed of [~~as compost and is deposited~~] in a landfill is not exempt from the fee.

SECTION 4. Sections 361.014(a) and (b), Health and Safety Code, are amended to read as follows:

(a) Revenue received by the commission under Section 361.013 shall be deposited in the state treasury to the credit of the commission. Of that [~~Half of the~~] revenue, 66.7 percent is dedicated to the commission's municipal solid waste permitting and enforcement programs and related support activities and to pay for activities that will enhance the state's solid waste management program, including:

(1) provision of funds for the municipal solid waste management planning fund and the municipal solid waste resource recovery applied research and technical assistance fund established by the Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act (Chapter 363);

(2) conduct of demonstration projects and studies to help local governments of various populations and the private sector to convert to accounting systems and set rates that reflect the full costs of providing waste management services and are proportionate to the amount of waste generated;

(3) provision of technical assistance to local governments concerning solid waste management;

(4) establishment of a solid waste resource center in the commission and an office of waste minimization and recycling;

(5) provision of supplemental funding to local governments for the enforcement of this chapter, the Texas Litter Abatement Act (Chapter 365), and Chapters 391 and 683, Transportation Code;

(6) conduct of a statewide public awareness program concerning solid waste management;

(7) provision of supplemental funds for other state agencies with responsibilities concerning solid waste management, recycling, and other initiatives with the purpose of diverting recyclable waste from landfills;

(8) conduct of research to promote the development and stimulation of markets for recycled waste products;

(9) creation of a state municipal solid waste superfund, from funds appropriated, for:

(A) the cleanup of unauthorized tire dumps and solid waste dumps for which a responsible party cannot be located or is not immediately financially able to provide the cleanup;

(B) the cleanup or proper closure of abandoned or contaminated municipal solid waste sites for which a responsible party is not immediately financially able to provide the cleanup; and

(C) remediation, cleanup, and proper closure of unauthorized recycling sites for which a responsible party is not immediately financially able to perform the remediation, cleanup, and closure;

(10) provision of funds to mitigate the economic and environmental impacts of lead-acid battery recycling activities on local governments; and

(11) provision of funds for the conduct of research by a public or private entity to assist the state in developing new technologies and methods to reduce the amount of municipal waste disposed of in landfills.

(b) Of [~~Half of~~] the revenue received by the commission under Section 361.013, 33.3 percent is dedicated to local and regional solid waste projects consistent with regional plans approved by the commission in accordance with this chapter and to update and maintain those plans. Those revenues shall be allocated to municipal solid waste geographic planning regions for use by local governments and regional planning commissions according to a formula established by the commission that takes into account population, area, solid waste fee generation, and public health needs. Each planning region shall issue a biennial report to the legislature detailing how the revenue is spent. A project or service funded under this subsection must promote cooperation between public and private entities and may not be otherwise readily available or create a competitive advantage over a private industry that provides recycling or solid waste services.

SECTION 4. Sections 361.014(a) and (b), Health and Safety Code, are amended to read as follows:

(a) Revenue received by the commission under Section 361.013 shall be deposited in the state treasury to the credit of the commission. Of that [~~Half of the~~] revenue, 66.7 percent is dedicated to the commission's municipal solid waste permitting programs, [~~and~~] enforcement programs, site remediation programs, [~~and related~~] support activities related to those programs, and [~~to pay for~~] activities that will enhance the state's solid waste management program, including: