LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 29, 1997 TO: Honorable Paul Sadler, Chair IN RE: Senate Bill No. 517, As Engrossed Committee on Public Education By: Bivins House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB517 ( Relating to the transportation of public school students.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB517-As Engrossed No fiscal implication to the State is anticipated. The probable fiscal implications to units of local government are described below: Bill Summary This bill would permit local school districts to use passenger vans for the transportation of 14 or fewer students in connection with school activities other than school bus routes to and from school. The bill would also permit the use of motor buses (in addition to school buses) for the transportation of 15 or more students in the same school-related conditions. These school or motor buses would no longer be required to be chartered from motor bus companies or district owned (they could be rented or leased). The bill defines "passenger car," "passenger van," and "motor bus" (which is a commercial motor vehicle) for purposes of Section 34.003, Education Code. It should be noted that federal laws and regulations governed by the National Highway Traffic and Safety Administration prohibit the sale of new passenger vans for the purpose of transporting students, but there is no federal law prohibiting the use of such vehicles acquired for a different purpose (such as transportation of faculty). The legislation would take effect for the 1997-98 school year. Administrative Costs to Local Government It is possible that school districts could lower operating costs, particularly for the amortized cost of the vehicle, if passenger vans and motor buses were used under the conditions stipulated in the bill. The state Foundation School Program funds approximately 48% of total public school transportation costs, but the state reimbursement rate does not depend on the type of vehicle in which students are transported. Any cost savings would therefore be realized exclusively by local districts. It is difficult to predict the actual cost savings for several reasons: (1) The precise configuration of routes is not known, nor are the corresponding operating costs. The state has no data on the number of extra-curricular or co-curricular routes which could be served by passenger vans and motor buses under the conditions of this bill. (2) Section 34.003 (a) permits the use of "passenger cars" on routes with fewer than 10 students, further limiting the desirable use of passenger vans. (3) The bill's cost-saving potential is curtailed by the federal laws referenced above. Dealers may be reluctant to sell new passenger vans to school districts. For the 1993-94 school year, fuel and related "supply" costs totaled $62 million and capital outlay (bus fleet depreciation) totaled $58 million (LBB data). A standard 15-passenger van has a cost advantage over a standard 71 passenger bus of approximately $15,000 ($25,000 vs. $40,000) and a fuel efficiency advantage of 50 to 200 percent (15 m.p.g. vs. 5-10 m.p.g.). Considering only these two factors, it is assumed that districts that exercise the option to operate passenger vans on extra-curricular and co-curricular excursions would realize average cost savings of 1 to 5 percent. This would represent a total statewide savings to local districts ranging from $1.2 to $6 million. The use of motor buses on extra-curricular and co-curricular excursions is not anticipated to produce a significant cost savings. The fiscal implications described above would be likely to continue beyond 2002. Source: Agencies: 701 Texas Education Agency - Administration LBB Staff: JK ,DH ,LP ,GJ