LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 13, 1995 TO: Honorable Rene O. Oliveira, Chair IN RE: Committee Substitute Committee on Economic Development for House of Representatives House Bill Austin, Texas No. 1997 FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 1997 (relating to the guarantee of certain loans under the linked deposit program) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would provide that loan guarantees, up to 50% of total project costs and subject to the availability of appropriations, shall be offered to lenders making loans under the subchapter. The bill further provides that the Commerce Policy Board by rule shall adopt a guarantee-to-reserve ratio that determines the amount of loan guarantees that may be made that exceed the amount available in the fund. The ratio of guarantees to the amount of money available in the fund may not exceed five to one. The state auditor shall review the loan guarantee program and payment activity and make a recommendation about the level of the guarantee-to-reserve ratio. Other sections have been either amended or added to provide for legislative authority regarding matters pertaining to making loan guarantees The probable fiscal implication of implementing the provisions of the bill would require a deposit of funds with an "eligible lending institution" for which to guarantee the loans. Administrative costs to the Department of Commerce during each of the first five years following passage is estimated as follows: Fiscal Probable Cost Probable Revenue Change in Year Out of Gain to Number of State General Revenue General Revenue Employees from Fund 001 Fund 001 FY 1995 1996 $89,776 $89,776 2.0 1997 72,884 72,884 2.0 1998 26,543 26,543 1.0 1999 14,249 14,249 .5 2000 14,249 14,249 .5 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Department of Commerce LBB Staff: JK, RR