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