LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 14, 2001 TO: Honorable David Counts, Chair, House Committee on Natural Resources FROM: John Keel, Director, Legislative Budget Board IN RE: SB312 by Zaffirini (Relating to the review and functions of the Texas Water Development Board.), Committee Report 2nd House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB312, Committee Report 2nd House, Substituted: negative impact * * of $(3,945,306) 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 $(1,000,000) * * 2003 (2,945,306) * * 2004 (2,945,306) * * 2005 (2,945,306) * * 2006 (2,945,306) * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Savings/ Savings/ Revenue Savings/ Number of * * (Cost) from (Cost) from Gain/(Loss) (Cost) from State * * General Other from Appropriat- Employees * * Revenue Funds-- Appropriat- ed Receipts from FY 2001 * * Fund TWFRA ed Receipts 0666 * * 0001 0997 0666 * * 2002 $(274,000) $25,000 $(25,000) 1.0 * * $(1,000,000) * * 2003 (2,945,306) (274,000) 25,000 (25,000) 1.0 * * 2004 (2,945,306) (274,000) 25,000 (25,000) 1.0 * * 2005 (2,945,306) (274,000) 25,000 (25,000) 1.0 * * 2006 (2,945,306) (274,000) 25,000 (25,000) 1.0 * *********************************************************************** Technology Impact The bill would require the cost of providing an additional FTE with a personal computer that is estimated at $1,800 in fiscal year 2002. This cost would be paid using Texas Water Resources Finance Authority (TWRFA) proceeds. It is estimated that $25,000 in additional appropriated receipts per year will be spent on upgrades to the Texas Natural Resource Information System (TNRIS), including faster Internet connections and hardware upgrades. These funds will be recovered through fees charged to private entities to establish partnerships with the Texas Water Development Board and TNRIS. Fiscal Analysis The bill would require the Texas Water Development Board (TWDB) to develop a capital spending plan identifying water needs of the state and setting forth a basis for allocating state-supported funding to address those needs. The bill would provide to the TWDB the authority to make grants from the Water Assistance Fund No. 480 on specific appropriation by the Legislature. The bill would establish a separate account in the clean water revolving fund to be used to provide financial assistance to private entities for nonpoint source pollution control and abatement policies. The bill would add to the list of hydrographic survey types the agency authorized to perform those conducted to collect information relating to water-bearing formations. Fees collected would be deposited to the Hydorgraphic Survey Account within the Water Assistance Fund. The bill would create The Rural Community Water and Wastewater Loan (RCWWL) Fund within the Water Assistance Fund No. 480. The RCWWL Fund would consist of money transferred by the Board from the water assistance fund, from proceeds of the sale of political subdivision bonds by the Board to the TWRFA and from repayments on loans made from the fund. The Fund would be used to make loans to rural communities for the construction, acquisition or improvement of water and wastewater projects. The bill would allow the Water Development Board to enter into partnerships with private entities on behalf of the TNRIS and allow the agency to collect fees for such arrangements. The bill would authorize the Board to use the Agricultural Water Conservation Bond Fund Program to make loans and grants to political subdivisions or state agencies for water conservation projects. Methodology There could be some administrative costs associated with the bill's requirement that a Capital Spending Plan be developed. However, it is anticipated that these costs could be absorbed within the agency's existing budget. This estimate assumes that $1 million in grants would be made from the Water Assistance Fund in fiscal year 2002 as a result of appropriations by the Legislature. There would be no significant fiscal impact expected from the bill's requirement that a separate account be established in the clean water revolving fund to be used to provide financial assistance to private entities for nonpoint source pollution control and abatement policies. There would also be no significant impact resulting from the bill's provisions regarding hydrographic surveys. Assuming that only amounts in the TWRFA account would be available to fund loans from the RCWWL Fund, it is estimated that of the total $1,370,000 remaining in TWRFA, $900,000 in loans would be made from the Fund during fiscal years 2002 through 2005, with an average $180,000 per year. It is estimated that 5 to 6 loans would be made to rural communities over that period, and that the Water Development Board would require one additional FTE to administer the loan program. Costs associated with this program, including those associated with salaries, wages, equipment and travel that are estimated at $94,000 per year and would be paid using TWRFA proceeds, which are outside the state treasury. It is estimated that the Water Development Board would charge fees totaling $25,000 per year for the establishment of partnerships with private entities on behalf of the TNRIS system. It is expected that all of these proceeds would be spent to improve the TNRIS system's accessibility to the Internet. Although the bill does not specify an amount of bonds to be issued out of the Agricultural Water Conservation Bond Fund Program, this estimate assumes that $16 million in bonds would be issued in fiscal year 2003 for grants to state agencies for water conservation projects. It is assumed that these bonds would be repaid over seven years, and that general revenue would be used for the debt service at a cost of approximately $3 million per year. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 580 Texas Water Development Board LBB Staff: JK, CL, TL