| TO: | Honorable Tommy Williams, Chair, Senate Committee on Finance |
| FROM: | Ursula Parks, Director, Legislative Budget Board |
| IN RE: | HB7 by Darby (relating to the amounts, availability, and use of certain statutorily dedicated revenue and accounts; reducing or affecting the amounts or rates of certain statutorily dedicated fees and assessments; imposing certain court costs.), Committee Report 2nd House, Substituted |
| Fiscal Year | Probable Savings from General Revenue Fund 1 |
Probable Revenue (Loss) from General Revenue Fund 1 |
Probable Revenue Gain from State Parks Acct 64 |
Probable Revenue Gain from Local Parks Account 467 |
|---|---|---|---|---|
| 2013 | $234,096 | ($1,390,000) | $888,000 | $19,000 |
| 2014 | $936,383 | ($5,089,411) | $3,550,316 | $74,924 |
| 2015 | $936,383 | ($5,089,411) | $3,550,316 | $74,924 |
| 2016 | $936,383 | ($5,089,411) | $3,550,316 | $74,924 |
| 2017 | $936,383 | ($5,089,411) | $3,550,316 | $74,924 |
| 2018 | $936,383 | ($5,089,411) | $3,550,316 | $74,924 |
| Fiscal Year | Probable (Cost) from Waste Management Acct 549 |
Probable Revenue (Loss) from Solid Waste Disposal Acct 5000 |
Probable Revenue (Loss) from Volunteer Fire Dept Assistance 5064 |
Probable (Cost) from System Benefit Account 5100 |
|---|---|---|---|---|
| 2013 | $0 | ($2,127,000) | ($7,500,000) | $0 |
| 2014 | ($341,153) | ($8,700,000) | ($16,500,000) | ($811,283,000) |
| 2015 | ($320,153) | ($8,600,000) | ($16,500,000) | $0 |
| 2016 | ($320,153) | ($8,600,000) | ($16,500,000) | $0 |
| 2017 | ($320,153) | ($8,600,000) | ($16,500,000) | $0 |
| 2018 | ($320,153) | ($8,600,000) | ($16,500,000) | $0 |
| Fiscal Year | Probable Revenue Gain from Large Cnty & Muni Rec & Parks 5150 |
Probable (Cost) from Oil & Gas Regulation 5155 |
Probable Revenue Gain from Oil & Gas Regulation 5155 |
Probable Revenue (Loss) from Select General Revenue Dedicated (Specialty License Plates) |
|---|---|---|---|---|
| 2013 | $16,000 | ($234,096) | $467,000 | $0 |
| 2014 | $64,171 | ($936,383) | $1,400,000 | ($3,908,000) |
| 2015 | $64,171 | ($936,383) | $1,400,000 | ($2,760,000) |
| 2016 | $64,171 | ($936,383) | $1,400,000 | ($2,760,000) |
| 2017 | $64,171 | ($936,383) | $1,400,000 | ($2,760,000) |
| 2018 | $64,171 | ($936,383) | $1,400,000 | ($2,760,000) |
| Fiscal Year | Probable Revenue Gain from New Other - Trust Fund of the Specialty License Plates |
Change in Number of State Employees from FY 2012 |
|---|---|---|
| 2013 | $0 | 0.0 |
| 2014 | $3,908,000 | 5.0 |
| 2015 | $2,760,000 | 5.0 |
| 2016 | $2,760,000 | 5.0 |
| 2017 | $2,760,000 | 5.0 |
| 2018 | $2,760,000 | 5.0 |
| Fiscal Year | Probable Revenue (Loss) from General Revenue Fund 1 |
Probable Savings from General Revenue Fund 1 |
Probable Revenue Gain from State Parks Acct 64 |
Probable Revenue Gain from Local Parks Account 467 |
|---|---|---|---|---|
| 2014 | ($5,089,411) | $936,383 | $3,550,316 | $74,924 |
| 2015 | ($5,089,411) | $936,383 | $3,550,316 | $74,924 |
| 2016 | ($5,089,411) | $936,383 | $3,550,316 | $74,924 |
| 2017 | ($5,089,411) | $936,383 | $3,550,316 | $74,924 |
| 2018 | ($5,089,411) | $936,383 | $3,550,316 | $74,924 |
| Fiscal Year | Probable (Cost) from Waste Management Acct 549 |
Probable Revenue (Loss) from Solid Waste Disposal Acct 5000 |
Probable Revenue (Loss) from Volunteer Fire Dept Assistance 5064 |
Probable (Cost) from System Benefit Account 5100 |
|---|---|---|---|---|
| 2014 | ($341,153) | ($8,700,000) | ($16,500,000) | ($811,283,000) |
| 2015 | ($341,153) | ($8,600,000) | ($16,500,000) | $0 |
| 2016 | ($341,153) | ($8,600,000) | ($16,500,000) | $0 |
| 2017 | ($341,153) | ($8,600,000) | ($16,500,000) | $0 |
| 2018 | ($341,153) | ($8,600,000) | ($16,500,000) | $0 |
| Fiscal Year | Probable Revenue Gain from Large Cnty & Muni Rec & Parks 5150 |
Probable Revenue Gain from Oil & Gas Regulation 5155 |
Probable (Cost) from Oil & Gas Regulation 5155 |
Probable Revenue (Loss) from Select General Revenue Dedicated (Specialty License Plates) |
|---|---|---|---|---|
| 2014 | $64,171 | $1,400,000 | ($936,383) | ($3,908,000) |
| 2015 | $64,171 | $1,400,000 | ($936,383) | ($2,760,000) |
| 2016 | $64,171 | $1,400,000 | ($936,383) | ($2,760,000) |
| 2017 | $64,171 | $1,400,000 | ($936,383) | ($2,760,000) |
| 2018 | $64,171 | $1,400,000 | ($936,383) | ($2,760,000) |
| Fiscal Year | Probable Revenue Gain from New Other - Trust Fund of the Specialty License Plates |
Change in Number of State Employees from FY 2013 |
|---|---|---|
| 2014 | $3,908,000 | 5.0 |
| 2015 | $2,760,000 | 5.0 |
| 2016 | $2,760,000 | 5.0 |
| 2017 | $2,760,000 | 5.0 |
| 2018 | $2,760,000 | 5.0 |
Among other provisions, the bill would implement recommendations in the Legislative Budget Board's report, "Options to Reduce Reliance on General-Revenue Dedicated Accounts for Certification of the State Budget" submitted to the Eighty-Third Texas Legislature, 2013.
The bill would require the Legislative Budget Board (LBB) to develop and implement a process to review the dedication, appropriation, and accumulation of General Revenue-Dedicated Funds. The bill would require the LBB to incorporate into budget recommendations appropriate measures to reduce reliance on available dedicated revenue for certification and include with the budget recommendations plans for further reducing reliance for the succeeding six years.
The bill would make all interest or other earnings that accrue on revenue held in an account in the General Revenue Fund, any part of which Section 403.095, Texas Government Code, makes available for certification, available for any general governmental purpose. The bill requires the Comptroller of Public Accounts (Comptroller) to deposit the interest and earnings to the credit of the General Revenue Fund. The bill excepts from this provision interest or earnings on certain tuition revenue, or an account that accrues interest or other earnings on deposits of state or federal money the diversion of which is specifically excluded by federal law.
The bill would reduce certain solid waste disposal fees, or "tipping" fees, by approximately one quarter. The bill would prohibit tipping fees from being applied to materials that are processed at composting and mulch processing facilities, except for materials that are utilized in the operation of or are disposed of in a landfill. Current law prohibits tipping fees from being applied to yard waste material composted at a composting facility. The bill would increase the allocation of tipping fee revenue deposited to the General Revenue-Dedicated Waste Management Account 549 from 50 to 66.7 percent, and would expand the purposes for which money in the account may be appropriated to include site remediation. The Texas Commission on Environmental Quality (TCEQ) would be required to issue a biennial report to the Legislature describing how the money from this allocation was spent. The bill would require activities to enhance the state's solid waste management programs to include certain activities. The bill would reduce the allocation of tipping fee revenue deposited to the General Revenue-Dedicated Solid Waste Disposal Fees Account 5000 from 50 to 33.3 percent.
The bill would authorize the use of battery sales fee revenue deposited to Hazardous and Solid Waste Remediation Fees Account 550 for environmental remediation at the site of a certain closed battery recycling facility, through September 30, 2014.
The bill would expand the purposes for which money in the General Revenue-Dedicated 9-1-1 Service Fees Account 5050 may be appropriated to include maintaining 9-1-1 service levels during transitions to newer technology, planning and deploying certain emergency network systems, and updating geospacial mapping technologies. The bill would also expand the purposes for which money in Account 5050 may be appropriated to include appropriations to the Texas A&M Forest Service for providing assistance to volunteer fire departments, under certain conditions.
The bill would expand the purposes for which money in the General Revenue-Dedicated Designated Trauma Facility and Emergency Medical Services Account 5111 may be appropriated to include appropriations to the Texas Higher Education Coordinating Board for graduate-level medical education programs or graduate-level nursing education programs.
The bill would require the Comptroller to limit the assessment against certain insurers for rural fire protection to the total amount that the General Appropriations Act appropriates from the Volunteer Fire Department Assistance Account 5064 for that fiscal year.
The bill would provide that certain fees collected for surface casing determination (groundwater protection) letters be deposited to the General Revenue-Dedicated Oil and Gas Regulation and Cleanup (OGRC) Account No. 5155. The bill would expand the purposes for which money in Account 5155 may be appropriated to include certain activities regarding the use of alternative fuels.
The bill would require the Comptroller to transfer, in addition to the appropriated amounts of sporting goods sales tax (SGST) to be credited to the Texas Parks and Wildlife Department, additional amounts of SGST sufficient to fund certain employee benefits costs. The bill would require the Comptroller, not later than September 30, 2013, to eliminate all General Revenue-Dedicated accounts established for specialty license plates under Subchapter G, Chapter 504, Texas Transportation Code, and set aside the balances of these accounts for appropriation for their dedicated purpose. The bill would deposit, on or after September 1, 2013, the portion of a fee payable under Subchapter G deposited to the credit of these accounts to a trust fund created by the Comptroller outside the General Revenue Fund.
The bill would authorize money in the General Revenue-Dedicated System Benefit Account 5100 to be appropriated for the purpose of returning the money to payers of the System Benefit Fund fee assessed under the Utilities Code. The bill would authorize the Public Utility Commission (PUC) to direct the Comptroller to return the unappropriated balance of Account 5100 to retail electric customers. The bill would require PUC, after consultation with the CPA, to establish, by rule, a system for transmission and distribution utilities, retail electric providers, municipally owned utilities, or electric cooperatives to credit retail electric customers' bills in amounts necessary to expend as fully as practicable any portion of Account 5100 appropriated to PUC for that purpose. The bill would require PUC to direct the Comptroller to disburse as much as practicable of the appropriated money as soon as practicable in one or more installments so that entities receive disbursements in proportion to the fees paid by retail electric customers in the service areas of the entities since the System Benefit Fund fee was first imposed.
The bill would require PUC, by rule, to require each entity receiving disbursements to ensure that retail electric customers receive credits that, in aggregate, equal the amount of disbursements received under the provisions of the bill, less a reasonable amount to reimburse the entity for administering the disbursement process as established by PUC in an amount not to exceed two percent of the disbursements. The bill requires PUC and the Comptroller to jointly issue a report regarding the status of developing and implementing the disbursement system and the progress made in disbursing the funds. The bill would appropriate to the Comptroller the balance of Account 5100 for the purpose of returning the money to payers of the System Benefit Fund fee.
The bill would require the Texas Commission on Environmental Quality (TCEQ) to report annually on corrective action status of certain petroleum contaminated sites. The bill would also require TCEQ to investigate the amount of fee revenue that would be necessary to cover the costs necessary to conclude certain programs and activities relating to the remediation of leaking petroleum storage tanks before September 1, 2021.
The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2013.
It is assumed that the costs to the Legislative Budget Board associated with the development and implementation of a process to review the dedication, appropriation, and accumulation of General Revenue-Dedicated Funds would not be significant and could be absorbed within existing resources.
According to the Comptroller, provisions of the bill relating to the allocation of interest and earnings on balances and revenues in General Revenue-Dedicated accounts would have no revenue implications, since the exemption language appears to allow all General Revenue accounts to retain their interest earnings.
According to the Comptroller, the reduction of rates for and revenue collections from certain solid waste disposal fees, and a change in the allocation of those fees, would result in a loss in revenue to General Revenue-Dedicated Solid Waste Disposal Fees Account 5000 in an amount estimated by the Comptroller to be $19.4 million through the biennium ending August 31, 2015, if the effective date of the bill is June 1, 2013, or $17.3 million through the biennium ending August 31, 2015, if the effective date of the bill is September 1, 2013. There would be no net effect for revenues allocated to General Revenue-Dedicated Waste Management Account 549. According to TCEQ, expanding the exemption from tipping fees to include materials used for mulch processing could significantly reduce revenue collections, but because certain information related to mulch processing is not reported to TCEQ, the potential fiscal impact cannot be determined.
According to TCEQ, the bill would require the agency to implement certain solid waste management activities authorized in current law, such as funding demonstration projects conducting market research, and creating a state municipal solid waste superfund program. Current law does not require the agency to implement these activities. Implementation of a municipal solid waste superfund program would require a significant but indeterminate increase in agency appropriations. According to TCEQ, these activities were first enacted in 1990, and many of them were implemented by TCEQ's predecessor agency at the time. Since that time, recycling in Texas has matured and local jurisdictions are implementing solid waste grant programs. TCEQ reports that implementation of this provision would require 5 FTEs to manage funds provided to other state agencies, handle reporting requirements, and conduct research to promote development of recycled waste product markets. FTEs would be funded out of General Revenue-Dedicated Solid Waste Management account 549. Salary, benefits, and indirect costs for implementation of this provision are estimated to be $341,153 in fiscal year 2014, and $320,153 in each subsequent fiscal year.
Current collections from certain insurers for rural fire protection are $30 million per fiscal year. Assuming future appropriations would continue at the fiscal year 2013 amount of $13.5 million from General Revenue-Dedicated Volunteer Fire Department Assistance Account 5064, limiting the assessment to the total amount appropriated from Account 5064 would result in a loss of $16.5 million per fiscal year to that account.
Currently, funds collected for surface casing letters of determination are deposited into General Revenue and then a portion of those funds are appropriated to the Railroad Commission as part of the agency's General Revenue funding. The agency reports collections of $1.4 million in fiscal year 2012 from the expedited fee for surface casing letters of determination, and a General Revenue appropriation for the purpose of making surface casing determinations of $0.8 for the same year. According to the Comptroller of Public Accounts, upon passage of the bill, revenue to the General Revenue Fund would decrease by an estimated $1.4 million per fiscal year. Assuming fiscal year 2012 appropriation levels for the surface casing program would continue through fiscal year 2018, and assuming that amounts associated with employee benefits for surface casing FTEs currently paid out of General Revenue (estimated to be $161,643) would shift to the OGRC Account No. 5155 upon passage of the bill, it is estimated that costs out of the General Revenue Fund would decrease by $0.9 million per fiscal year. Likewise, revenues to the Oil and Gas Regulation and Cleanup Account No. 5155 would increase by $1.4 million, while costs to the account would increase by $0.9 million per fiscal year.
The Comptroller's estimates were based on general revenue-dedicated accounts utilized by the TPWD that are currently appropriated SGST and only reflect employee benefits associated with the SGST portion of the accounts. In future fiscal years, benefits paid from the SGST proceeds, as appropriated, may involve additional transfers to the General Revenue-Dedicated Texas Parks and Wildlife Conservation and Capital Account No. 5004. As TPWD received no appropriations of SGST proceeds to transfer to this account in the 2012-13 biennium, any projected amounts are not included here.
The Comptroller reports that the following General Revenue-Dedicated accounts would be abolished and their revenue and balances would be moved to the trust fund: Texas Collegiate License Plates 5015; Read to Succeed Plates 5027; Big Bend National Park Plates 5030; Houston Livestock Show/Rodeo Scholarship Plates 5034; Attorney General Volunteer Advocate Program Plates 5036; Texas Reads Plates 5042; Girl Scout License Plates 5052; Tourism Plates 5053; Texas Special Olympics 5055; Texas A&M Kingsville Graduate Assistance Plates 5056; Waterfoul/Wetland Conservation Plates 5057; I Love Texas Plates 5086; Economic Development and Tourism 5110; Texas Music Foundation Plates 5113; Daughters of Republic of Texas Plates 5115; Texas Lions Camp Plates 5116; March of Dimes Plates 5117; Kights of Columbus Plates 5118; Cotton Boll Plates 5119; Marine Mammal Recovery Plates 5120; Share the Road Plates 5121; El Paso Mission Restoration 5122; Air Force Association of Texas Plates 5123; Boy Scout Plates 5126 Texas State Rifle Association Plates 5130; Master Gardener Plates 5131; Texas 4-H Plates 5132; Urban Forestry Plates 5133; Specialty License Plates General 5140; American Legion Plates 5141; and Marine Conservation Plates 5142. According to the Comptroller, certain specialty license plate revenue deposited to other General Revenue-Dedicated accounts not included in list above would also be moved to the trust fund.
The abolishment of certain General Revenue-Dedicated specialty license plate accounts and the establishment of a trust outside of the General Revenue Fund for the deposit of the balances and revenue of the former accounts would result in a revenue loss to those General Revenue-Dedicated specialty plate accounts and a gain to the Trust Fund for Specialty License Plates, an Other Fund, in an amount estimated by the Comptroller to be $6.7 million through the biennium ending August 31. Moving balances from these General Revenue-Dedicated accounts to Other Funds outside of General Revenue would result in a negative impact on amounts available for certification.
The Comptroller assumes that, although the amount of future appropriation is unknown, revenue deposited in General Revenue-Dedicated System Benefit Account 5100 over the upcoming biennium will match the appropriations such that the amount appropriated to the Comptroller for credit to utilities will be identical to the estimated balance of Account 5100 as of August 31, 2013, in the amount of $811.3 million.
Based on information provided by PUC and the Comptroller, duties and responsibilities associated with implementing the provisions of the bill could be accomplished utilizing existing resources.
According to TCEQ, the evaluation of the petroleum product delivery fee to determine the amount necessary to conclude the program and activities is not expected to have significant fiscal implications.
This legislation would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either within or outside of the Treasury, or create a dedicated revenue source. The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.
| Source Agencies: | 304 Comptroller of Public Accounts, 455 Railroad Commission, 473 Public Utility Commission of Texas
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| LBB Staff: | UP, KK, JI, JJ
|