Fiscal Note - SB 0263 - Creates Utilicare Stabilization Fund
L.R. NO. 1009-05
BILL NO. Truly Agreed to and Finally Passed HCS for SCS for SB 263
SUBJECT: Utilicare Stabilization Fund
TYPE: Original
DATE: May 8, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue* $0 to $140,000 $0 to $140,000 $0 to $140,000
Utilicare
Stabilization
Fund** $0 $0 $0
Total Estimated
Net Effect on All
State Funds $0 to $140,000 $0 to $140,000 $0 to $140,000
-SUBJECT TO APPROPRIATION-
*Loss to General Revenue in the amount of interest earned which cannot be
calculated.
** Unknown costs associated with the Department of Natural Resources are not
included.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
The Department of Health and the Department of Economic Development, Office
of the Public Counsel and the Public Service Commission assume this proposal
would not have a fiscal impact on their agencies.
Officials of the State Treasurer's Office did not respond to our fiscal
impact request. Oversight assumes this proposal would fiscally impact
General Revenue (GR) because monies would be appropriated from it and
interest earned from these monies would be lost. Oversight has ranged the
loss from $0 to $5,000,000 because the actual amount would be subject to
appropriation. There would also be an unknown loss to GR because interest
monies earned on surplus funds would be credited to the Utilicare
Stabilization Fund (USF) and would not be transferred back to GR. The amount
of interest cannot be determined.
The Department of Natural Resources (DNR) states that this proposal would
allow up to $5,000,000 to be appropriated from general revenue annually to
the Utilicare Stabilization Fund. DNR assumes a portion of these funds would
be applied to DNR's Low Income Weatherization Assistance Program (LIWAP).
For purposes of this fiscal note, a range of $0 to $5,000,000 was used for
the portion which could be allocated to the LIWAP. Furthermore, DNR assumes
that the additional funds would be allocated to the local level where the
LIWAP is administered. DNR states that at this time, no additional staff is
needed; however, if federal funding for the LIWAP continues to decrease, some
of the Utilicare fund could be needed to staff the state funded portion of
the program.
DNR further states that this proposal requires projects financed with
Utilicare funds to have a full energy savings payback period of no greater
than ten years. The United States Division of Energy Weatherization
Assistance Program uses the National Energy Audit (NEAT) which does not
provide an estimate of the energy payback periods for each measure. NEAT
requires prudent investment of weatherization funds, based on a savings to
investment ratio of 1.0 or greater for each measure.
DNR assumes that if calculation of energy savings paybacks is required by
this proposal, then DNR would incur additional costs for developing a
methodology, tracking the energy savings, and verifying that payback periods
were within 10 years. DNR assumes costs related to this portion of the
proposal are unknown.
Oversight assumes that, since the above provisions would go into effect only
if DNR and DOS agreed to use Utilicare Stabilization Fund monies for the low
income weatherization assistance program, DNR and DOS would request resources
required as budget decision items before taking actions which would cause the
provisions to take effect.
The Department of Social Services (DOS) assumes since the program described
in this proposal is subject to appropriations, costs would be a range from
zero to the amount to reimburse the estimated number of eligible households.
DOS states the Low Income Heating Energy Assistance Program (LIHEAP), which
also uses the 110% of poverty level as the eligibility threshold, serves
105,000 households. DOS assumes the Utilicare program would also serve
105,000 households, with a maximum payment per household of $150. These
costs would total $15,750,000. In addition, cooling assistance is limited to
the lessor of 5% of total appropriations or $500,000. Using the $500,000,
DOS estimates total costs of $16,250,000. DOS assumes LIHEAP staff could
process applications for both programs, so additional staff would not be
needed. However, DOS also states that if the federal government ends the
LIHEAP, Utilicare staff would be needed.
Based on the language of the proposal, Oversight assumes that $0 to
$5,000,000 in FY98, $0 to $5,000,000 in FY99, and $0 to $5,000,000 in FY00
would be available from the USF to be used by the Department of Social
Services, Division of Family Services for providing assistance to eligible
households. Costs were ranged based on the "subject to appropriation"
language.
Oversight also assumes a net savings of $0 to $140,000 due to the change in
the maximum amount available for appropriation for the utilicare program from
current law of $5,140,000 to $5,000,000 under this proposal.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
GENERAL REVENUE
Savings
Amount currently appropriated $0 $0 $0
for Utilicare Program to to to
$5,140,000 $5,140,000 $5,140,000
Costs
Monies Transferred to the $0 $0 $0
Utilicare Stabilization Fund to to to
($5,000,000) ($5,000,000) ($5,000,000)
ESTIMATED NET EFFECT ON $0 $0 $0
GENERAL REVENUE FUND to $140,000 to $140,000 to $140,000
- SUBJECT TO APPROPRIATIONS -
UTILICARE STABILIZATION FUND
Income
Transfer of Monies from General Revenue $0 $0 $0
to Utilicare Stabilization Fund to to to
$5,000,000 $5,000,000 $5,000,000
Cost-Department of Social Services (DOS)
Low Income Heating Energy $0 $0 $0
Assistance Program (LIHEAP) to to to
($5,000,000) ($5,000,000) ($5,000,000)
Cost-Department of Natural Resources (DNR)
Low Income Weatherization $0 $0 $0
Assistance Program (LIWAP) to to to
($5,000,000) ($5,000,000) ($5,000,000)
ESTIMATED NET EFFECT ON
UTILICARE STABILIZATION FUND $0 $0 $0
- SUBJECT TO APPROPRIATIONS -
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
LOCAL
Income
Income from DNR appropriated $0 $0 $0
from the Utilicare Stabilization Fund to to to
$5,000,000 $5,000,000 $5,000,000
Cost
Low Income Weatherization $0 $0 $0
Assistance Program to to to
($5,000,000) ($5,000,000) ($5,000,000)
ESTIMATED NET EFFECT ON
LOCAL GOVERNMENT $0 $0 $0
FISCAL IMPACT - Small Business
Additional funding for the Low-Income Weatherization Assistance Program
(LIWAP) would create additional business for local LIWAP service providers
and businesses with whom they may contract to install the energy efficiency
measures in residences.
DESCRIPTION
The proposal would expand the Utilicare program to include qualified
individual households and pay for not only the primary heating source, but
also the secondary heating or cooling source. Qualified individual
households would be defined and the qualifying income level to receive
assistance would be changed from $7,500 to 110% of the current federal
poverty level. The issuance of assistance would be subject to sufficient
monies being appropriated by the General Assembly.
The Department of Social Services (DOS) would be responsible for not only all
federal heating assistance programs, but also cooling assistance programs.
The extreme heat rule, established and amended by the Public Service
Commission (PSC), would allow eligible households an amount not exceeding
$150 for each cooling season. The amount paid from the Utilicare
Stabilization Fund (USF) for cooling assistance in any single cooling season
cannot exceed the lesser of 5% of the amount appropriated or $500,000.
No more than $5 million dollars would be appropriated to the Utilicare
Stabilization Fund (USF) which would be created in the State Treasury. Funds
not needed during the fiscal year would be invested, with any interest,
dividends and monies earned being credited to the USF. The USF could also
receive gifts, grants, contributions, appropriations and funds or benefits
from any other source(s), with the unexpended balances being invested. DOS,
in coordination with the Department of Natural Resources (DNR) may apply a
portion of the funds appropriated to the USF to the Low Income Weatherization
Assistance Program, provided that any project financed with these funds would
have a full energy savings payback period of no more than ten years.
The proposal contains an emergency clause for section A dealing with low
income households needing heating assistance during the 1996 to 1997 winter.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Social Services
Department of Natural Resources
Department of Economic Development
Department of Health
NOT RESPONDING: STATE TREASURER'S OFFICE
This Fiscal Note is not an official copy and should not be quoted or cited.