Honorable David Dewhurst , Lieutenant Governor, Senate
Honorable Tom Craddick, Speaker of the House, House of Representatives
John S. O'Brien, Director, Legislative Budget Board
SB12 by Averitt (Relating to programs for the enhancement of air quality, including energy efficiency standards in state purchasing and energy consumption; providing penalties.), Conference Committee Report
|Fiscal Year||Probable Net Positive/(Negative) Impact to General Revenue Related Funds|
|Fiscal Year||Probable Savings/(Cost) from
GENERAL REVENUE FUND
|Probable Savings/(Cost) from
CLEAN AIR ACCOUNT
|Probable Revenue Gain/(Loss) from
TEXAS EMISSIONS REDUCTION PLAN
|Probable Savings/(Cost) from
TEXAS EMISSIONS REDUCTION PLAN
|Fiscal Year||Probable Revenue Gain/(Loss) from
STATE HIGHWAY FUND
|Change in Number of State Employees from FY 2007|
Article 1 of the bill would make changes to the Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP), including enhancement of capabilities for the retirement of old vehicles and their replacement.
The bill would allow the Texas Commission on Environmental Quality (TCEQ) to provide repair and replacement assistance under the LIRAP program for owners making 300 percent or less of the federal poverty level with vehicles that are at least 10 years old, or fail an emissions test within 15 months of an application for assistance. The bill establishes a schedule for the maximum amount for a qualified replacement vehicle ranging from $1,500 for vehicles five to 10 years old to $3,500 for hybrid motor vehicles of the latest or previous model year. The replacement vehicle would be required to have a gross vehicle weight of less than 10,000 pounds. The bill would also set a limit of 10 percent for administrative costs for the counties to administer the local initiatives program in nonattainment counties and, for Early Action Compact counties, require the TCEQ to provide 10 percent of all fees collected in such counties to the respective county for administration of the program. The bill would allow for replacement of pre-1996 vehicles, and allow funding for replacement of vehicles that have passed the EPA Start-up Acceleration Simulation Mode Standards emissions test but would have failed the EPA Final Acceleration Simulation Mode Standards emissions test.
The Local Initiatives Projects authorization for local air quality programs in counties participating in the LIRAP program would be repealed and replaced, with a maximum yearly cap of $10.0 million out of the Clean Air Account No. 151. It would apply only to counties participating in the LIRAP.
Article 2 would amend the Texas Emissions Reduction Plan (TERP) and New Technology Research and Development (NTRD) programs administered by the TCEQ. The bill would provide that marine vessels are eligible for TERP diesel emissions grant funding. The bill would allow the TCEQ to hire staff and consultants needed to complete the comission's duties under this section and ensure timely review of applications and reimbursement of grant applicants' eligible project costs. The counties that may be designated as affected counties eligible for the TERP program are expanded to include counties containing all or part of a major highway transportation corridor, and for a marine vessel or engine, the area of eligibility is expanded to include waterays or bays within nine miles of a nonattainment area.
Article 2 also would: raise the cost per ton TERP grant award cap to $15,000; include marine vessels as infrastructure projects eligible for TERP funding; and allow grants to other state agencies for idling reduction infrastructure projects at rest areas and other public facilities. The bill would provide that the TCEQ administer the TERP Account instead of the Comptroller.
Article 2 would amend the New Technology Research and Development (NTRD) program to provide TCEQ oversight over grants provided to nonprofit organizations. The use of grant revenue for administrative costs would be limited to 10 percent of funding provided. The bill would expand the NTRD program to encourage the establishment of a testing facility to evaluate retrofits, add-ons, and advanced technologies and fuels to determine technology effectiveness. The bill would extend current allocations levels of funds in the TERP Account No. 5071 between diesel grants and NTRD grants administered by a nonprofit organization in Houston.
The bill would extend to August 31, 2013, from September 30, 2010 under current law, the expiration date for the following fees deposited to the credit of the General Revenue-Dedicated TERP Account No. 5071: the 2 percent surcharge on the sale, lease or rental of new or used off-road, heavy-duty diesel equipment; the 2.5 percent (1996 and earlier models), and 1 percent (1997 and later models) surcharge on every retail sale, lease, or use of an on-road diesel motor vehicle over 14,000 pounds; the TERP surcharge imposed on the registration of a truck-tractor or commercial motor vehicle in an amount equal to 10 percent of the total registration fees due; and the TERP surcharge of $10 on the inspection of every commercial motor vehicle required to be inspected.
In addition, the bill would maintain the state fee for a certificate of title deposited to the credit of the General Revenue-Dedicated TERP Account No. 5071 at $20 for all applicants in a nonattainment area, whereas under current law the fee would have been reduced and the portion of the fee going to the TERP Account No. 5071 would have been reduced to $15 for all applicants regardless of county of residence. Provisions regarding proceeds of the certificate of title fee, which beginning on September 1, 2008 and ending on September 1, 2010 will be deposited to the Texas Mobility Fund No. 365, with the TERP Account No. 5071 receiving an equal reimbursement from the State Highway Fund No. 6, would be extended through September 1, 2015.
Article 3 of the bill amends the energy efficiency programs administered by the State Energy Conservation Office and establishes new energy efficiency requirements for appliances sold in Texas. State agencies and institutions of higher education will now be included, along with local political subdivisions, in the requirement to establish goals to reduce electric consumption by five percent each year for six years, beginning September 1, 2007. It would also direct state agencies to purchase energy efficient appliances and equipment, if such items are available and cost-effective.
The bill would amend Chapter 388 of the Health and Safety Code, relating to energy efficiency, to allow the State Energy Conservation Office (SECO), to adopt by rule more stringent energy efficiency standards. SECO's responsibility to provide assistance and information to help entities meet required standards would be expanded to include institutions of higher education and state agencies. School districts would also be required to establish a goal to reduce electric consumption by the entity by 5 percent each year for six years, beginning September 1, 2007. The bill would also require school districts to report to the SECO the electric consumption of the district for the preceding year and the district's plan for reducing electric consumption.
Article 4 of the bill specify when the TCEQ can limit idling by vehicles.
Article 5 of the bill would require the TCEQ to notify the applicable county judge or presiding officer of a municipality when a construction permit or amdendment is received.
Article 6 of the bill would modify laws relating to the TCEQ's enforcment of repeat violations of Title V Federal Clean Air Act regulations.
Article 7 of the bill would require the Public Utility Commission (PUC) to establish a demonstration project for solar electric systems for each of the following: new residential subdivisions; new or established affordable housing for low-income persons; and not more than three small businesses.
Provisions expanding the owners and vehicles eligible for LIRAP vehicle replacement assistance would result in an increased demand for funding from LIRAP fee proceeds. However, because amounts adopted by the Conference Committee on House Bill 1 include $50 million per fiscal year out of the General Revenue-Dedicated Clean Air Account No. 151 compared to only $5.5 million in fiscal years 2006 and 2007, this estimate assumes that the increase is sufficient to handle the increased demand; thus, no additional costs are reflected in the table above.
The TCEQ would require one additional FTE and related costs to conduct audits of program requirements, including repair assistance, replacement incentives, retirement certifications, and programmatic administrative costs. The bill's requirement that the TCEQ work in partnership with automobile manufacturers and dealers to increase public awareness and participation in LIRAP would require an estimated $250,000 per fiscal year for each of the five years. The AirCheck Texas Repair and Replacement Assistance brochure would need to be reprinted to include the dollar limits and any other updated information. The brochure is given to each vehicle owner whose vehicle fails an emissions test. Reprinting the brochure would cost an estimated $100,000 in fiscal year 2008 and $10,000 in subsequent years. Two FTEs would be required to administer contracts for the Local Initiatives Projects. Total administrative costs for implementing Article 1 of the bill total $871,813 in fiscal year 2008 and $432,313 in subsequent years, all from the General Revenue-Dedicated Clean Air Account No. 151, and it would require three additional FTEs. The FTE-related portion of these costs of $192,239 per fiscal year out of the Clean Air Account No. 151 are included in the table above because appropriations to the TCEQ adopted by the Conference Committee on House Bill 1 did not include additional FTEs for the LIRAP. This estimate assumes that all other cost increases for the LIRAP program would be absorbed within the $50 million annual LIRAP appropriation.
The bill's provisions expanding areas eligible for TERP funding to include major highway transportation corridors is expected to increase the number of projects and contracts to be administered by the TERP program and result in a corresponding increase in demand for TERP funds in a larger area of the state. The bill's provision expanding TERP funding eligibility to marine vessels also is expected to increase the demand for TERP funds and the number of applications received. These provisions, along with the provision allowing the agency to purchase and install idle reduction technologies and facilities at rest areas and other public facilities on major highway transportation routes, will result in the need for six additional FTEs and related costs.
An additional $400,000 each fiscal year for contracts for the audit and monitoring of TERP projects, based on the expansion of eligible areas and types of projects. An additional $100,000 would be needed in fiscal year 2008 to implement the requirement that TERP application submission be available via the Internet. It is estimated that an additional $250,000 per year would be needed to contract for application assistance to training in the completion of required grant administration and reimbursement forms to fulfill the bill's requirement for the timely review of applications and reimbursement of grant applicants' eligible project costs.
All administrative costs for implementing Article 2, including costs associated with 6 additional FTEs and contracting costs, would total $1,193,403 in fiscal year 2008 and $1,054,403 in future years, all from the General Revenue-Dedicated TERP Account No. 5071. Because appropriations for the TERP program adopted by the Conference Committee on House Bill 1 include over $2.2 million for administrative costs, compared to less than $700,000 per fiscal year authorized for administration in fiscal years 2006-07, the table above does not include these FTEs or related costs.
With regard to changes relating to fee collections, the changes would result in a gain to the General Revenue-Dedicated TERP Account No. 5071 of $195.3 million in fiscal year 2011 and $206.9 million in fiscal year 2012 and a loss to the State Highway Fund No. 6 of $103.2 million in fiscal year 2011 and $106.3 million in 2012. These estimates were provided by the Comptroller, based on the 2008-09 Biennial Revenue Estimate, and result from fee extensions for the: off-road, heavy-duty diesel equipment surcharge, the on-road diesel motor vehicle surcharge, the TERP surcharge of 10 percent on the registration of truck-tractors and commercial vehicles, the TERP surcharge of $10 on the inspection of a commercial motor vehicle; and the changes proposed by the bill for distribution of the proceeds of the certificate of title fee.
This estimate assumes appropriations out of the General Revenue-Dedicated TERP Account No. 5071 would remain level in fiscal years 2008, 2009, and 2010. For 2011 and 2012, this estimate assumes all revenues deposited to the TERP Account No. 5071 would be appropriated, since this would be a new General Revenue-Dedicated revenue stream as compared to current law.
State agencies receiving TERP grants as a result of the bill's provisions authorizing idling reduction infrastructure projects at rest areas and other public facilities could incur a positive fiscal impact. The extent to which such projects were funded would depend on how much funding the TCEQ would designate for such projects and how cost-effective such projects would be at reducing emissions as compared to other applicants.
State agencies could experience some cost savings relating to the bill's provisions requiring agencies to establish goals to reduce electric consumption by five percent each year.
Articles 4 through 6: no signficant fiscal impact.
Energy Efficiency Demonstration Projects for Solar Electric System--Grant Program
The bill's provision relating to the Public Utility Commission's Energy Efficiency Demonstration Project would result in a one-time cost of approximately $4.4 million. The PUC estimates the cost would be at least $4.0 million for solar projects and another $400,000 for program administration expenses. However, the Commission reports that the number of new residential subdivisions and affordable housing for persons with low incomes cannot be quantified; therefore, the costs associated with those Energy Efficiency Demonstration Projects cannot be estimated. Reports required by the bill for the PUC to produce could be done using existing agency resources.
Local governments would be the recipients of up to $10 million annually statewide from the bill's Local Initiatives program. In addition, local governments could gain up to 10 percent of additional LIRAP funds passed through the counties for administration, estimated to be $5 million per year, due to the expansion of eligibility for the LIRAP program and anticipated increase in program expenditures.
In fiscal year's 2011 and 2012, local governments could receive some portion of the additional funds available in the General Revenue-Dedicated TERP Account No. 5071 resulting from changes to fee expirations and dedications proposed by the bill. The amount they would receive would depend on the number of applications they would submit and the relative cost-effectiveness of other applicants.
Similar to state agencies, local governments may experience cost savings in electricity costs due to the bill's requirements that political subdivisions establish energy savings goals.
332 Department of Housing and Community Affairs, 473 Public Utility Commission of Texas, 304 Comptroller of Public Accounts, 582 Commission on Environmental Quality, 701 Central Education Agency, 302 Office of the Attorney General, 303 Building and Procurement Commission, 405 Department of Public Safety, 601 Department of Transportation, 712 Texas Engineering Experiment Station
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