LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 1, 1995



 TO:     Honorable John T. Montford, Chair      IN RE:  Senate Bill No. 405
         Committee on Finance                           By: Bivins
         Senate
         Austin, Texas







FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
405 (Relating to the distribution of the foundation school fund.)
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 would implement the Comptroller's Gaining Ground
Recommendation ED1 by changing the pattern of distribution from
the Foundation School Fund to school districts each month.  In
the cases of property poor school districts, the new schedule
provides slightly more resources in September than the current
schedule, but less in February and April.  For districts in the
mid-wealth range, the proposed schedule is heavily weighted
towards the beginning of the year, with no payments from December
through March.  Districts with above average wealth would receive
payments only in September, October and August.

A gain to the General Revenue Fund would result from the
differential between what the state is charged on cash management
notes and what it can derive from investing its cash balances
during the year.

Local districts should see a reduction in borrowing costs due to
increased cash flow early in the school year.

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 Revenue    Probable Revenue 
          Year    Gain to  General     Gain to Local   
                  Revenue Fund 001    School Districts 
                                                       
          1996            $1,200,000        $12,900,000
          1997             1,200,000         12,900,000
                                                       
          1998             1,200,000         12,900,000
                                                       
          1999             1,200,000         12,900,000
          2000             1,200,000         12,900,000
                                                       
                                                       
                                                       


Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.


Source:   Central Education Agency - Administration, Comptroller
of Public Accounts
          LBB Staff: JK, DH, DF