LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 4, 1997 TO: Honorable Kenny Marchant, Chair IN RE: House Bill No. 2798 Committee on Financial Institutions By: Marchant House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2798 ( Relating to tax-exempt private activity bonds.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2798-As Introduced Implementing the provisions of the bill would result in a net impact of $0 to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The bill could effect the programs of the following state agencies: Veterans Land Board (VLB), Texas Higher Education Coordinating Board (HECB), Texas Department of Commerce (TDOC), Texas Department of Agriculture (TDA), Texas Water Development Board (TWDB) and the Texas Department of Housing and Community Affairs (TDHCA). Historically, VLB and HECB have issued private-activity bonds under the state-voted subceiling, with those issues funding land purchase loans to veterans and college student loan bonds, respectively. TDOC, TWDB and TDA have the authority to issue under this subceiling, but do not have current programs. Since the amount of the subceiling will be decreased, those agencies could have less ability to issue tax-exempt debt. TDHCA would be able to issue more bonds under the single family housing category to benefit low to moderate first time homebuyers (by statute, TDHCA receives one third of the total single family housing subceiling amount), and a better opportunity to issue bonds for affordable multi-family housing (apartments). Methodolgy 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 Savings/(Cost) from General Revenue Fund 0001 1998 $0 1998 0 2000 0 2001 0 2002 0 Net Impact on General Revenue Related Funds: The probable fiscal implication to General Revenue related funds during each of the first five years is estimated as follows: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 0 2000 0 2001 0 2002 0 No fiscal implication to units of local government is anticipated. Source: Agencies: 352 Bond Review Board LBB Staff: JK ,TH ,ML