Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 20, 1995

 TO:     Honorable John Montford, Chair         IN RE: Committee Substitute
         Committee on Finance                                  for Senate
         Senate                                 Bill No. 409
         Austin, Texas

FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
409 (Relating to the accounting treatment of premium and discount
associated with the purchase of certain securities for the
permanent school fund.) this office has determined the following:

The bill would require the State Board of Education to apply GAAP
accounting methods, instead of the statutory treatment currently
used, to premiums and discounts received on fixed income
securities.  This change would speed up payments to the Available
School Fund.

The bill would become effective September 1, 1995.

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 
             Year   Gain/(Loss) to the 
                      Available School 
                          Fund 002     
          1996              $40,000,000



       The fiscal implication to  units of local government cannot be

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