LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session February 7, 1995 TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 5 Committee on Education By: Bivins Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 5 (Relating to state assistance in financing public school facilities.) 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. This bill creates a funding program for school facilities. Districts with property wealth up to $280,000 per unweighted ADA are eligible to participate in the program. The program provides funding for new and existing debt using a guaranteed yield of $28 per penny per unweighted ADA for up to $0.25 of debt service tax effort. The estimates shown are based on current information (as of 2/1/95) for district property values, average daily attendance (ADA) and tax rates and are subject to change as these data are updated. Other assumptions used for these estimates include: 20 year maturity date for debt issued 8% Annual Percentage Rate for debt issued $2 billion in new debt to meet critical need, as presented by TEA to the Senate Interim Committee on School Facilities, issued in 1996. $1 billion in additional new debt issued in 1998, 1999, 2000, as indicated by current trends in local debt issuance. TEA also indicates that there may be some administrative costs to the state associated with data collection through the Public Education Information Management System (PEIMS), but that cost cannot be determined. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Cost Out Year of General Revenue Fund 001 1996 $147,138,247 1997 138,156,567 1998 198,730,749 1999 259,122,444 2000 318,965,785 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The fiscal implication to school districts cannot be determined because the amount of debt that would have been issued without the guaranteed yield cannot be estimated. Source: Office of the Attorney General, Comptroller of Public Accounts, Central Education Agency -Administration LBB Staff: JK, DH, DF Approval Status: Comments: LBB Coordinator Section Director's Approval Section