LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 9, 1997 TO: Honorable Jerry Patterson, Chair IN RE: Senate Bill No. 227, Committee Report 1st House, Substituted Committee on Veteran Affairs & Military Installations-Spec By: Madla Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB227 ( relating to a grant 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-Committee Report 1st House, Substituted FN Revision 1 Implementing the provisions of the bill would result in a net negative impact of $(15,750,000) 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 50 percent of 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 ($7,850,000) 1998 (7,850,000) 2000 0 2001 0 2002 0 Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 ($7,850,000) 1999 (7,850,000) 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