LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 25, 1997
TO: Honorable Eddie Lucio, Jr., Chair IN RE: Senate Bill No. 1365, Committee Report 1st House, Substituted
Committee on Intergovernmental Relations By: Barrientos
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1365 ( Relating
to the operation of the Texas Department of Housing and Community
Affairs and the Texas Housing Corporation.) this office has
detemined the following:
Biennial Net Impact to General Revenue Funds by SB1365-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
impact of $0 to General Revenue Related Funds through the biennium
ending August 31, 1999.
No significant fiscal implication to the State is anticipated.
Fiscal Analysis
This bill amends several sections in Chapter 2306 of the Government
Code. The bill would require the Housing Finance Division of
the Department of Housing and Community Affairs (TDHCA) to use
15 percent of housing funds to provide housing assistance to
families with incomes 30 percent or less of the area median
family income (AMFI) and 25 percent of housing funds to provide
housing assistance to families with incomes between 30 and 50
percent of the AMFI. In addition, the bill would require 30
percent of the funds from the Housing Trust Fund to provide
housing assistance to households earning less than 30 percent
of the AMFI. The bill adds a sunset provision for the department's
nonprofit corporation and outlines the purposes of the nonprofit
corporation. The issuance of qualified 501(c)(3) bonds for
financing the construction or rehabilitation of affordable multifamily
housing is among the purposes outlined in this bill. The bill
also provides guidelines for interactions between the department
and the nonprofit corporation. Among the guidelines is a maximum
amount of $1 million the department may loan the corporation
and the ability for the department to loan personnel to the
corporation with the approval of the Legislative Budget Board.
Methodolgy
Costs related to this bill would be the result of the department's
anticipated difficulty in lending bond proceeds to individuals
and families in the specified income categories. According
to the department, the loaning of bond proceeds to individuals
in the targeted income categories would be limited in accordance
with their ability to qualify for loans from the bond proceeds.
This is because most would be unable to qualify for loans from
the bond proceeds. Assuming a $100 million bond issuance, approximately
$310,000 in costs would be the result of lost interest generated
by proceeds which are not loaned. In addition, the department
anticipates approximately $50,000 per year in added debt service
carrying costs would be due to the additional risk incurred
by bond purchasers for these bonds.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable
Savings/(Cost)
from Texas
Housing Local
Depository Fund
0896
1998 ($138,572)
1998 (138,572)
2000 (138,572)
2001 (92,284)
2002 (46,000)
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 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies: 332 Department of Housing and Community Affairs
LBB Staff: JK ,TL ,RA