| TO: | Honorable Jim Keffer, Chair, House Committee on Energy Resources |
| FROM: | John S O'Brien, Director, Legislative Budget Board |
| IN RE: | HB724 by Schwertner (Relating to the abolition of the Alternative Fuels Research and Education Division program administered by the Railroad Commission of Texas.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2012 | $500,000 |
| 2013 | $500,000 |
| 2014 | $500,000 |
| 2015 | $500,000 |
| 2016 | $500,000 |
| Fiscal Year | Probable Revenue Gain/(Loss) from General Revenue Fund 1 |
Probable Revenue Gain/(Loss) from Alter Fuels Research Acct 101 |
Probable Savings/(Cost) from Alter Fuels Research Acct 101 |
Change in Number of State Employees from FY 2011 |
|---|---|---|---|---|
| 2012 | $500,000 | ($2,100,000) | $1,934,000 | (10.0) |
| 2013 | $500,000 | ($2,100,000) | $1,934,000 | (10.0) |
| 2014 | $500,000 | ($2,100,000) | $1,934,000 | (10.0) |
| 2015 | $500,000 | ($2,100,000) | $1,934,000 | (10.0) |
| 2016 | $500,000 | ($2,100,000) | $1,934,000 | (10.0) |
The bill would abolish the Alternative Fuels Research and Education (AFRED) program administered by the Railroad Commission. The AFRED program includes research, marketing and public-education programs for economically and environmentally beneficial alternative fuels. It also includes a grant/rebate program to incentivize the purpose. Sections of the Natural Resources Code that the bill proposes to delete also establish the industry-paid Liquid Propane (LP)-gas delivery fee that is deposited to the General Revenue-Dedicated AFRED Account No. 101. That account, which funds the AFRED program, would also be abolished by the bill. In addition, the bill provides that any unobligated money in the AFRED Account No. 101would be transferred to the undedicated portion of the General Revenue Fund.
The bill would take effect immediately if it would receive a vote of two-thirds of all the members elected to each house. Otherwise, the bill would take effect on September 1, 2011.
The elimination of the AFRED program would result in balances in the AFRED Account No. 101 being deposited to the General Revenue Fund. Although the Comptroller's Biennial Revenue Estimate for 2012-13 reports a projected balance in the account of $10.0 million on September 1, 2011, the Railroad Commission reports that the majority of these cash balances will, in fact, be spent prior to the end of fiscal year 2011. Therefore, this estimate assumes only $500,000 in AFRED Account No. 101 balances will actually move to the General Revenue Fund. In addition, $2.1 million in annual revenues to the AFRED Account No. 101 will be lost, partially offset by an estimated $1,713,000 in annual expenditures, based on 2010-11 levels. Elimination of the marketing and education program would also result in 10.0 fewer FTEs being needed, as compared to 2010-11, which will result in an additional estimated savings of $221,000 per fiscal year.
It should be noted that appropriations in House Bill 1, As Engrossed, include only $931,377 per fiscal year, or about 50 percent of 2010-11 funding levels. Likewise, FTEs funded by the AFRED program total only 5.2 FTEs in House Bill 1, As Engrossed, reflecting recommended reductions to funding for the AFRED marketing and public education program. Thus, compared to amounts included in House Bill 1, As Engrossed, savings that would be realized by passage of the bill would be less than the amounts shown in the table above.
| Source Agencies: | 455 Railroad Commission
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| LBB Staff: | JOB, SZ, ZS, TL
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