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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Garcia

 

DATE TYPED:

2/05/03

 

HB

320

 

SHORT TITLE:

Low-Income Home Energy Assistance

 

SB

 

 

 

ANALYST:

Neel

 

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

$2,400.0

 

 

Recurring

LIHEAP Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

         $(2,400.0)

(See Narrative)

Recurring

General Fund

 

         $ 2,400.0  

(See Narrative)

Recurring
LIHEAP Fund

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

LFC files

 

Responses Received From

 

Taxation and Revenue Department (TRD)

 

SUMMARY

 

     Synopsis of Bill

 

HB 320 creates a new Low-Income Home Energy Assistance Fund (“LIHEAP Fund”) to provide funding for the low-income home energy assistance program administered by the Human Services Department.  HB 320 also creates a new distribution to the Fund from the net receipts attributable to the Oil and Gas Emergency School Tax (“School Tax”).  Amounts in the fund would be appropriated by this bill to HSD for purposes of the program. 

 

     Significant Issues

 

TRD notes the calculation in the following manner:

 

1.     A “base amount” would be calculated for each fiscal year as the product of total annual school tax collections in FY 2000 times the ratio representing the increase in the consumer price index (“CPI”) between calendar year 1999 and the calendar year preceding the fiscal year.  For example, school tax collections in FY 2000 were $169.5 million, and the ratio of the CPI for 2003 to 1999 was 1.091, so the base amount for FY 2004 would be $185 million. 

2.     Each month, the base amount would be subtracted from the cumulative fiscal year-to-date school tax collections. 

3.     The new distribution to the LIHEAP Fund would equal 30% of the difference calculated in bullet two, less the cumulative amount already distributed during the current fiscal year.  If the distribution formula yields a negative amount, no distribution would be made.

 

FISCAL IMPLICATIONS

 

TRD notes a $2,400.0 impact to the general fund, which would be indexed to the CPI to adjust the base for calculation.  Therefore, in periods of hyperinflation the distribution from the school fund may increase significantly.  Furthermore, according to TRD, the in the last five fiscal years, annual school tax collections have ranged from a low of $107 million to a high of $329 million.  Under the proposed formula, annual LIHEAP Fund distributions would have ranged from $0 to as much as $43.2 million during this period. 

  

TECHNICAL ISSUES

 

HB 320 does not note which CPI to use in its calculation.

 

SN/yr:pr