TO:	Honorable Brooks Landgraf, Chair, House Committee on Environmental Regulation

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2502 by Reynolds (Relating to the creation of an energy efficiency loan guarantee program.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB2502, As Introduced : a negative impact of ($1,374,000) through the biennium ending August 31, 2025 for administrative costs incurred by the State Energy Conservation Office within the office of the Comptroller of Public Accounts. There would be an additional indeterminate cost to issue loans or provide grants for purposes specified in the bill. The cost would be dependent on the appropriations, federal grants, and or private capital available for this purpose.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024	($687,000)
2025	($687,000)
2026	($787,000)
2027	($787,000)
2028	($787,000)

Fiscal Year	Probable (Cost) from General Revenue Fund 1	Change in Number of State Employees from FY 2023
2024	($687,000)	1.0
2025	($687,000)	1.0
2026	($787,000)	1.0
2027	($787,000)	1.0
2028	($787,000)	1.0

The bill would amend Chapter 338, Health and Safety Code, creating the Energy Efficiency Loan Guarantee Program administered by the Comptroller to issue or guarantee loans for energy audits, upgrades, or retrofits to increase the energy efficiency of commercial buildings and residences that are not newly constructed.

The bill would authorize the State Energy Conservation Office (SECO) to use a portion of the money from federal grants, leveraged private capital, or state resources to fund grants, technical assistance, or administrative expenses.

The bill would require SECO to submit an annual report to the Texas Commission on Environmental Quality (TCEQ) and the Texas A&M Engineering Experiment Station that evaluates the effectiveness of the program and quantifies energy savings and emissions reductions as a result of the program.

The Comptroller would need to contract with a lending institution in order to guarantee loans outlined in the bill. The Comptroller's office estimates the cost to contract with a lending institution to be $600,000 in each fiscal year of the 2024-25 biennium, increasing to $700,000 per year in future biennia.

It is assumed that the Comptroller would require additional staff to implement the provisions of the bill. According to the Comptroller's Office, one Program Specialist V would be needed to hold a Certified Texas Contract Manager (CTCM) certification to handle the anticipated administrative workload, loan defaults, and customer service requirements that the Comptroller would expect upon implementation of the bill. Personnel related costs, including salaries, travel, and overhead are estimated to be $87,000 per fiscal year.

In addition, the amount of any federal grants, other funds, or appropriations that would be received by the Comptroller's office is unknown. Disbursements for program grants and other authorized spending is likewise unknown. Therefore, there would be additional indeterminate costs for the bill's implementation.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION


April 12, 2023