LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session February 15, 1995 TO: Honorable John T. Montford, Chair IN RE: Senate Joint Committee on Finance Resolution Senate No. 32 Austin, Texas By: Brown FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Joint Resolution No. 32 (Proposing a constitutional amendment to increase the amount of general obligation bonds authorized for veterans' housing assistance.) 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 propose a constitutional amendment authorizing the Veterans Land Board(VLB) to issue general obligation bonds in an amount not to exceed $500 million. The bond proceeds would be used to make home mortgage loans to Texas veterans through the Veterans Housing Assistance Fund II. The time, manner, rates and other terms of the bond issuance would be determined by the Veterans Land Board. To the extent that funds in the Veterans Housing Assistance Fund II were not sufficient to pay debt service on the bonds, general revenue funds would be appropriated. The estimate of maximum potential costs assumes a bond issuance of $100 million each year with debt service payments based on a 7.5 percent interest rate for a 30-year period and semi-annual interest payments. One interest payment is assumed in the year of issuance. 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 Maximum Year Cost for Debt Service Out of General Revenue Fund 001 1996 $4,213,000 1997 12,638,000 1998 21,063,000 1999 29,489,000 2000 37,914,000 Similar annual fiscal implications would continue for the 30 year payout of the bonds. No fiscal implication to units of local government is anticipated. The cost to the state for publication of the resolution is $90,000. Source: Comptroller of Public Accounts LBB Staff: JK, KW, DF