LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session March 5, 1997 TO: Honorable Eddie Lucio, Jr., Chair IN RE: Senate Bill No. 501 Committee on Intergovernmental Relations By: Zaffirini Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB501 ( Relating to authorizing the comptroller to provide assistance to local governments in obtaining funds from the federal government.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB501-As Introduced 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 authorize the Comptroller, at the request of a political subdivision, to provide assistance and technical support in obtaining the maximum amount of funding from the federal government to which the political subdivision is entitled. The Comptroller would be authorized to charge the political subdivision a fee not to exceed 20 percent of the additional funds received because of the assistance provided by the Comptroller. Providing services to Texas' 20 most populated counties would result in administrative costs of $935,000 per year. The actual cost and statewide charge to local governments would vary depending on the amount of assistance provided by the Comptroller. To the extent that all administrative costs are recovered by the Comptroller, the net cost to the state would be minimized. However, the bill does not require the Comptroller to recover local government assistance costs, so these costs could be paid solely by the General Revenue Fund. Implementation of the bill would have a beneficial fiscal impact for those local governments that experience an increase in federal funds as a result of assistance from the Comptroller. For example, the Comptroller estimates that its assistance to political subdivisions would generate an additional $7 million in federal funds per year for Texas 20 largest counties. Assuming that these counties would reimburse the Comptroller for estimated costs, then the net gain to these counties would be approximately $6.1 million per year. The actual increase in federal funds would depend on the extent to which assistance from the Comptroller results in additional federal revenue, and the extent to which local governments seek this assistance. Source: Agencies: 304 Comptroller of Public Accounts LBB Staff: JK ,TL ,RN