Austin, Texas
                    FISCAL NOTE, 77th Regular Session
                              March 28, 2001
          TO:  Honorable Rodney Ellis, Chair, Senate Committee on Finance
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  SB1725  by Cain (Relating to the creation of the Texas
               Fuel Cell Commercialization Initiative and the
               redirection of certain federal Oil Overcharge
               Restitution Funds.), As Introduced
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  SB1725, As Introduced:  positive impact of $0 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                                   $0  *
          *       2003                                    0  *
          *       2004                                    0  *
          *       2005                                    0  *
          *       2006                                    0  *
All Funds, Five-Year Impact:
         * Fiscal Year    Probable Savings/(Cost) from Oil    *
         *                Overcharge Account/ GR-Dedicated    *
         *                              5005                  *
         *      2002                                       $0 *
         *      2003                             (12,000,000) *
         *      2004                             (15,000,000) *
         *      2005                             (15,000,000) *
         *      2006                             (15,000,000) *
Fiscal Analysis
The bill would direct the State Energy Conservation Office (SECO) to
allocate the balances of the LoanStar Fund for the Texas Fuel Cell
Commercialization Initiative (TFCCI) over the next two years which would
provide incentives to businesses to promote and facilitate clean
small-scale fuel cell power generation. SECO would be required to form a
fuel cell advisory committee to provide guidance to the agency in program
development of clean small-scale fuel technology.

The bill allows SECO to use 5% of the LoanStar funds for administrative
costs and for education-related efforts associated with the TFCCI.  It
also allows SECO to use an additional 5% on administration and
education-related efforts that the advisory committee agrees would
enhance the overall impact of TFCCI.
Currently, the LoanStar Fund revolving account is maintained at a minimum
of $95 million. SECO uses these funds currently to provide loans to
state agencies and universities for energy savings capital improvements.
The bill would require SECO to phase out making these loans for energy
savings and begin giving direct grants to companies who install fuel
cell power systems.  This analysis assumes that the SECO would cease
issuing new loans on the bill's effective date and would redirect all
available funds for grants for TFCCI on January 1, 2003.  SECO would
continue making grants until all available balances in the LoanStar Fund
are depleted.  SECO estimates that $12-$15 million would be available
for grants each fiscal year.  The estimated cost in fiscal year 2003
reflects a partial year impact given the launch date of January 1, 2003.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:   582   Texas Natural Resource Conservation Commission,
                   473   Public Utility Commission of Texas, 475
                   Office of Public Utility Counsel, 304   Comptroller
                   of Public Accounts
LBB Staff:         JK, SD, CL, SF