LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 16, 1997
         
         
      TO: Honorable Teel Bivins, Chair            IN RE:  House Bill No. 1800, As Engrossed
          Committee on Education                              By: Hochberg
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB1800 ( Relating 
to state-administered assessment instruments for students in 
special education programs.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB1800-As Engrossed
         
Implementing the provisions of the bill would result in a net 
positive impact of $4,316,658 to General Revenue Related Funds 
through the biennium ending August 31, 1999.

         
The bill would make no appropriation but could provide the legal 
basis for an appropriation of funds to implement the provisions 
of the bill.
         
 
Fiscal Analysis
 
The bill would require the development and administration of 
an alternative statewide assessment instrument for student in 
special education for whom the standard statewide assessment 
does not appropriately measure student achievement.  The assessment 
to be developed would have to be based on the existing statewide 
assessment and would have to assess students  performance and 
growth in reading, mathematics, and writing.
 
Methodolgy
 
It is estimated that development of an alternative assessment 
program would increase testing contracts by $5.4 million annually.

Administrative 
costs at the Texas Education Agency are estimated at approximately 
$400,000 annually for eight (8) additional FTEs required to 
develop and maintain the alternative assessment program.  Total 
costs for these FTEs, include salaries, benefits (calculated 
at 25.52% of base salary), travel and operating expenses.  

Both 
testing and administrative costs would be funded through a set-aside 
of Foundation School Program payments to districts.

Based 
on statutory funding for the costs of preparing and administering 
state student assessment instruments through the set-aside out 
of the Compensatory Education Allotment (Section 39.031, Education 
Code) the  costs associated with an alternative assessment would 
have no impact on total state costs.  The reduction in Foundation 
Payments to districts would decrease Guaranteed Yield payments 
to districts by about 40% of the decrease in the Foundation 
School Program at an estimated savings to the state of $2,158,329 
annually. 
The probable fiscal implications of implementing the provisions 
of the bill during each of the first five years following passage 
is estimated as follows:
 
Five Year Impact:
 
Fiscal Year Probable           Change in Number   
            Savings/(Cost)     of State                                                                   
            from Foundation    Employees from                                                             
            School Fund        FY 1997                                                                    
            0193                                                                                           
       1998        $2,158,329               8.0                                                      
       1998         2,158,329               8.0                                                      
       2000         2,158,329               8.0                                                      
       2001         2,158,329               8.0                                                      
       2002         2,158,329               8.0                                                      
 
 
         Net Impact on General Revenue Related Funds:
 

 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998           $2,158,329
               1999            2,158,329
               2000            2,158,329
               2001            2,158,329
               2002            2,158,329
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
No significant fiscal implication to units of local government 
is anticipated.

Local school districts would realize a reduction 
in Compensatory Education payments from the state.  The amount 
of the reduction will vary on a district basis depending on 
local district wealth and the size of the districts' allotment 
for Compensatory Education.

Because districts already administer 
tests on the same schedule proposed for these assessments and 
because Admission, Review and Dismissal committees already address 
special education student assessment issues, no additional costs 
to school districts are anticipated.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,LP ,DH ,TH