LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                           May 17, 1995



 TO:     Honorable Robert Junell, Chair         IN RE: Committee Substitute
         Committee on Appropriations                          for Senate
         House of Representatives               Bill No. 726
         Austin, Texas                                  By: Junell








FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
726 (relating to energy conservation measures by institutions of
higher education) this office has determined the following:

The bill would amend Texas Education Code regarding energy
conservation contracts.  It would direct the Legislature to base
utility appropriations to institutions of higher education on
each institution's estimated energy cost for each year of the
biennium  and, if an energy conservation contract is in effect,
on the institutions estimated net savings from the contract
during the contract term divided by the number of years in the
contract.  In addition, the bill would require an institution
considering an energy conservation contract to submit a contract
proposal to the energy management center for review and comment
prior to awarding the contract.  The energy management center
could provide a cost-benefit analysis of  proposals and an
analysis of the projected savings.  The energy management center
would be allowed to charge a fee for the analysis of proposals. 
The Higher Education Coordinating Board, in consultation with the
energy management center, would establish guidelines and an
approval process for energy conservation measures.

It is assumed the Higher Education Coordinating Board and the
energy management center would engage in the activities required
by the bill as part of their normal operations and would not
require additional funding.  In addition, it is assumed that any
institutional costs associated with energy contract analysis
would be paid from institutional funds and would present no    




additional cost to the State.

 While the provisions of the bill may provide for cost savings to
the State, savings would depend upon the number of institutions
participating in energy conservation contracts and the amount of
subsequent savings realized after the contracts expire. 
Therefore, the fiscal implications of the bill cannot be
determined.


The fiscal implication to  the State or units of local government
cannot be determined.


Source:   Legislative Budget Board
          LBB Staff: JK, MK, DF