LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 10, 2001 TO: Honorable J.E. "Buster" Brown, Chair, Senate Committee on Natural Resources FROM: John Keel, Director, Legislative Budget Board IN RE: HB622 by Lewis, Ron (Relating to financing rural water projects.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB622, As Engrossed: negative impact of $(6,000,000) through the * * biennium ending August 31, 2003. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(3,000,000) * * 2003 (3,000,000) * * 2004 (3,000,000) * * 2005 (3,000,000) * * 2006 (3,000,000) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Change in Number of State * * Year General Revenue Fund Employees from FY 2001 * * 0001 * * 2002 $(3,000,000) 6.0 * * 2003 (3,000,000) 6.0 * * 2004 (3,000,000) 6.0 * * 2005 (3,000,000) 6.0 * * 2006 (3,000,000) 6.0 * *************************************************************************** Technology Impact The technology impact of the bill is estimated at $10,800 for the purchase of new computers for additional required FTEs. Fiscal Analysis The bill would create the Rural Water Assistance Fund as a General Revenue account to provide assistance for water and water-related projects to rural political subdivisions and to finance an outreach and technical assistance program to assist rural political subdivisions in obtaining assistance through the fund. The bill also would exempt from the sales tax items purchased by a nonprofit water supply or sewer service corporation for any project financed by the Rural Water Assistance Fund. Methodology It is expected that the Water Development Board would require additional funds and FTEs to administer the Rural Water Assistance Fund (RWAF). Costs to the agency would depend on the amount available in the RWAF to make loans and grants. Although the bill does not specify an amount to be deposited to the RWAF, this estimate assumes that the Water Development Board would issue approximately $16 million in bonds in each biennium and that $3 million out of the General Revenue Fund would be appropriated to the RWAF in each fiscal year to buy down interest rates for loan and for outreach and administration. It is estimated that the Water Development Board would use $470,000 of this amount (including employee benefits) and require 6 additional FTEs in each fiscal year for outreach and administration as provided in the bill. It is expected that the remaining $2,530,000 in each year used to buy down interest rates on loans and grants to rural political subdivisions. If no funds are appropriated to the RWAF, it is assumed there would be no significant program activity, and therefore no significant costs to the Water Development Board associated with the administration of the program in those years. The tax exemption provisions of the bill are not expected to result in a significant loss of revenue to the state. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 551 Texas Department of Agriculture, 580 Texas Water Development Board, 304 Comptroller of Public Accounts, 332 Texas Department of Housing and Community Affairs LBB Staff: JK, CL, TL