LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  March 25, 1997
         
         
      TO: Honorable Jerry Patterson, Chair            IN RE:  Senate Bill No. 227
          Committee on Veteran Affairs & Military Installations-Special                              By: Madla
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB227 ( Relating 
to a grant or loan for a local area adversely affected by a 
reduction in defense-related activity.) this office has detemined 
the following:
         
         Biennial Net Impact to General Revenue Funds by SB227-As Introduced   FN Revision 1
         
Implementing the provisions of the bill would result in a net 
negative impact of $(30,000,000) to General Revenue Related 
Funds through the biennium ending August 31, 1999.
         

         
 
Fiscal Analysis
 
The bill would  require the Department of Commerce (TDOC) to 
establish a grant program for local communities impacted by 
United States Department of Defense (DOD) base and facilities 
mergers, consolidations, closures and acquisitions.  The grants 
would be used by local communities to purchase property from 
the DOD, new construction, rehabilitation, or renovation of 
facilities or infrastructure, or purchase of capital equipment 
or insurance.  These improvement would be designed to stimulate 
the economic development of the communities.
 
Methodolgy
 
The amount required for grants is based on calculations from 
local communities that estimated the funds required to renovate 
DOD facilities located in their jurisdictions for commercial 
use.  The estimates assume DOD funds will provide 25 percent 
of the cost for capital improvements and the remainder would 
be provided from the General Revenue Fund.  The estimate assumes 
administrative costs associated with implementing this bill 
would be covered by TDOC existing appropriations.
 
Five Year Impact:
 
Fiscal Year Probable           
            Savings/(Cost)                                                                                
            from General                                                                                  
            Revenue Fund                                                                                  
            0001                                                                                           
       1998     ($15,000,000)                                                                        
       1998      (15,000,000)                                                                        
       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        ($15,000,000)
               1999         (15,000,000)
               2000                    0
               2001                    0
               2002                    0
 
          
No significant fiscal implication to units of local government 
is anticipated.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         465   Department of Commerce
                                         
                      LBB Staff:   JK ,JD ,CG