LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 1, 2009 TO: Honorable Kip Averitt, Chair, Senate Committee on Natural Resources FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:SB1846 by Hegar (Relating to powers and duties of the Texas Commission on Environmental Quality, including penalty payment plans, the Concho River Watermaster Program, utility and district applications, and the recovery of costs associated with the Texas Clean Rivers Program.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1846, As Introduced: a negative impact of ($2,562,750) through the biennium ending August 31, 2011.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
April 1, 2009
TO: Honorable Kip Averitt, Chair, Senate Committee on Natural Resources FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:SB1846 by Hegar (Relating to powers and duties of the Texas Commission on Environmental Quality, including penalty payment plans, the Concho River Watermaster Program, utility and district applications, and the recovery of costs associated with the Texas Clean Rivers Program.), As Introduced
TO: Honorable Kip Averitt, Chair, Senate Committee on Natural Resources
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: SB1846 by Hegar (Relating to powers and duties of the Texas Commission on Environmental Quality, including penalty payment plans, the Concho River Watermaster Program, utility and district applications, and the recovery of costs associated with the Texas Clean Rivers Program.), As Introduced
Honorable Kip Averitt, Chair, Senate Committee on Natural Resources
Honorable Kip Averitt, Chair, Senate Committee on Natural Resources
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
SB1846 by Hegar (Relating to powers and duties of the Texas Commission on Environmental Quality, including penalty payment plans, the Concho River Watermaster Program, utility and district applications, and the recovery of costs associated with the Texas Clean Rivers Program.), As Introduced
SB1846 by Hegar (Relating to powers and duties of the Texas Commission on Environmental Quality, including penalty payment plans, the Concho River Watermaster Program, utility and district applications, and the recovery of costs associated with the Texas Clean Rivers Program.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1846, As Introduced: a negative impact of ($2,562,750) through the biennium ending August 31, 2011.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1846, As Introduced: a negative impact of ($2,562,750) through the biennium ending August 31, 2011.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2010 ($1,708,500) 2011 ($854,250) 2012 $0 2013 $0 2014 $0
2010 ($1,708,500)
2011 ($854,250)
2012 $0
2013 $0
2014 $0
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 2010 ($1,708,500) 2011 ($854,250) 2012 $0 2013 $0 2014 $0
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 2010 ($1,708,500) 2011 ($854,250) 2012 $0 2013 $0 2014 $0
2010 ($1,708,500)
2011 ($854,250)
2012 $0
2013 $0
2014 $0
Fiscal Analysis
The bill would require the Texas Commission on Environmental Quality (TCEQ) to allow any entity in violation of law within the TCEQ's jurisdiction to pay monetary civil or administrative penalties in periodic installments.
Methodology
Under current law, only small business must be provided with an installment payment option for penalties assessed by the TCEQ. The agency reports that of the penalty amounts it receives, approximately one-third are from orders assessed against large corporations and paid in one-lump sum. The agency also reports that it received a total of $8.5 million in penalties in fiscal year 2008, and that the vast majority of the penalties are deposited to the General Revenue Fund. In addition, the agency reports that installment payments are made over a 36-month period. Assuming the large entities paying one-third of penalties collected, or $2,550,000 per fiscal year, would opt to move to an installment plan upon passage of the bill, it is estimated that two-thirds of the annual amount from large corporations, or $1.7 million would be received over three fiscal years rather than in one fiscal year. Therefore, it is estimated that there would be a loss of revenues in fiscal year 2010 of $1.7 million. In fiscal year 2011, one-third of penalties assessed in 2011 would be repaid, so the loss would only by $0.9 million. Beginning in fiscal year 2012, it is expected that penalty revenues would return to current law levels because there would be two prior fiscal years' worth of installment payments being received. This estimate assumes that the loss would be to the General Revenue Fund.
Under current law, only small business must be provided with an installment payment option for penalties assessed by the TCEQ. The agency reports that of the penalty amounts it receives, approximately one-third are from orders assessed against large corporations and paid in one-lump sum. The agency also reports that it received a total of $8.5 million in penalties in fiscal year 2008, and that the vast majority of the penalties are deposited to the General Revenue Fund. In addition, the agency reports that installment payments are made over a 36-month period.
Assuming the large entities paying one-third of penalties collected, or $2,550,000 per fiscal year, would opt to move to an installment plan upon passage of the bill, it is estimated that two-thirds of the annual amount from large corporations, or $1.7 million would be received over three fiscal years rather than in one fiscal year. Therefore, it is estimated that there would be a loss of revenues in fiscal year 2010 of $1.7 million. In fiscal year 2011, one-third of penalties assessed in 2011 would be repaid, so the loss would only by $0.9 million. Beginning in fiscal year 2012, it is expected that penalty revenues would return to current law levels because there would be two prior fiscal years' worth of installment payments being received. This estimate assumes that the loss would be to the General Revenue Fund.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 582 Commission on Environmental Quality
582 Commission on Environmental Quality
LBB Staff: JOB, WK, ZS, TL
JOB, WK, ZS, TL