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