LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 27, 1995



 TO:     Honorable Curtis Seidlits, Chair       IN RE:  House Bill No. 2490
         Committee on State Affairs                     By: Patterson, et
         House of Representatives               al.
         Austin, Texas







FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
2490 (Relating to the creation, administration, and operation of
the Texas Development Bank to administer state-funded loan and
loan guarantee programs.) this office has determined the
following:

The bill would create the Texas Development Bank as an agency of
the state to administer state-funded loan and loan guarantee
programs, including approving and servicing loans. Under this
bill, existing loan and loan guarantee programs would be merged,
and the duties and powers of agencies currently providing loan
services and issuing bonds would be transferred to the new state
development bank.  The bill would  establish a board consisting
of the Commissioner of Agriculture, the Commissioner of the
General Land Office, the Comptroller of Public Accounts, and 6
other members appointed by the Governor and Lieutenant Governor. 
The bill provides for a chief operating officer and authorizes
staff necessary to manage the bank.  The bill would also require
the new board to conduct, in conjunction with the Comptroller's
Office, a cost-benefit analysis of state loan and loan guarantee
programs every fourth year. The Comptroller's Office has
indicated that there would be no significant administrative costs
to that office from this provision of the bill.

Several agencies with loan programs would be affected under this
bill.  These would include, among others, the Department of
Agriculture, the Veterans Land Board, and the Water Development
Board. The bill would provide for the transfer of the Veterans
Land, Housing Assistance and Home Improvement programs to the    




bank.  However, the Veterans Land Board has indicated that it
cannot, at this point, estimate the fiscal implications of the 
bill for the board.

If it is assumed that agencies' staffs involved with the loan
programs and with bonds required to fund the loan would be
transferred to the new entity, then some economies would be
expected from staffs working in the same agency with shared
computer hardware, software and other technologies.  Other
savings could result from the eventual downsizing of staff due to
consolidation as well as from other administrative efficiencies. 
To the extent that bond issues could be combined, there could be
savings in bond issuance costs also.  Although savings could be
significant, their amount cannot be accurately estimated at this
time.


No fiscal implication to units of local government is
anticipated.

The fiscal implication to  the State cannot be determined.


Source:   Comptroller of Public Accounts, General Land Office and
Veterans' Land Board,
                         Department of Agriculture
          LBB Staff: JK, ML, KW, DF