Bill Caption

Relating to the amounts, availability, and use of certain statutorily dedicated revenue and accounts.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for HB7, Committee Report 1st House, Substituted: a positive impact of $107,679,862 through the biennium ending August 31, 2015, if the effective date of the bill is June 1, 2013; or a positive impact of $97,590,766 through the biennium ending August 31, 2015, if the effective date of the bill is September 1, 2013. Combined, the net loss to the General Revenue-Dedicated accounts and the net gain to General Revenue Fund 0001 associated with the reallocation of interest would offset each other, resulting in no significant impact for certification purposes. Other provisions of the bill that reduce General Revenue-Dedicated account balances would result in a negative impact on amounts available for certification. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

Summary: HB 7 seeks to implement various recommendations by the Legislative Budget Board (LBB) on reducing Texas’ alliance on General Revenue Dedicated Funds for purposes of Certifying Texas’ budget. HB 7 would consolidate several funds, reduce and consolidate fees, and appropriate existing dedicated funds. HB 7 does, however, establish additional funds, although they would not be able to be used for certification.

HB 7 requires the Comptroller to deposit interest accrued from dedicated accounts into General Revenue and require the Legislative Budget Board (LBB) to find specific ways the Legislature can reduce Texas’ reliance on certifying its budget with General Revenue- Dedicated funds.

HB 7 would reduce fees for depositing waste into municipal solid waste landfills and forbid a fee from being assessed on source separated materials at composting and mulch processing facilities. It also specifies where and in what proportion funds allocated to Texas Natural Resource Conservation Commission under the Solid Waste Disposal Act must be allocated. HB 7 allocates money from the 9-1-1 Services Fee Fund to the Texas A&M Forest Service for wildfire repair and allows funds from the designated trauma and emergency medical services account to be allocated to the Texas Higher Education Coordinating Board for graduate level nursing and medical education programs.

HB 7 requires the comptroller to levy an assessment on insurers equal to what the General Appropriations Act allocates to the Volunteer Fire Department Assistance Account into General Revenue. HB 7 would add fees for expediting letters of determination into the Oil and Gas Regulation and Cleanup Fund to study and evaluate the access to electronic data necessary to protect groundwater and eliminate dedicated accounts for specialty license plates and require the comptroller to manage these funds and appropriate them only for uses stipulated in the eliminated license plate fund.

HB 7 specifies funds from the System Benefit Fund may only be used for purposes established by HB 7, and limits the fee assessed by the fund to two cents per megawatt hour from 65 cents. It stipulates that money from this fund be used only for regulatory purposes such as customer education programs, administrative expenses, low-income weatherization and energy efficiency programs, and eliminates various subsidies to low-income people, such as one-time bill payment assistance and 20% rate reductions, and it caps the amount that can be spent on low-income weatherization and energy efficiency projects to $50 million for each state biennium under the system benefit fund.

HB 7 does, however, require transmission and distribution authorities to establish the Low-Income Electric Customers Program Fund outside of the treasury, which has not been recommended by LBB. It is essentially a fund that allows spending under the System Benefit Fund to continue without these funds being used for certification purposes. This fund would reduce rates for low-income users and pay for critical care residential customers that do not exceed 400% FPL. The Texas Public Utilities Commission can adopt rules and fees and the authority to set rate reductions for low-income users that electric providers must adopt. This fund would operate until 2023.

Analysis: HB 7 is a strong attempt to reduce Texas’ dependence on dedicated funds for budget certification which is a deceptive budget gimmick that makes Texas’ budget process less transparent. We also support provisions in the bill that decrease certain fees and penalties.

Still, HB 7 expands government by creating a new dedicated fund, the Low-Income Electric Customer Program Fund, to subsidize certain low-income energy users. This fund would also exist outside of the treasury. Placing this fund outside of the treasury will result in these funds not being able to be used for certification, but it also reduces transparency.

Due to the creation of this new fund, TPPA opposes HB 7 and recommends that it be amended so that the Low-Income Electric Customers Program Fund is struck and the cuts to the System Benefit Fund are retained. The legislature should pursue amendments that work to draw down the amount of funds put into the System Benefit Fund and give some of those funds back to taxpayers.

Vote "no," on HB 7 unless amendments addressing these purposes are adopted.