LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                              April 20, 1999
  
  
          TO:  Honorable Bill Carter, Chair, House Committee on Urban
               Affairs
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB 1260  by Hill (Relating to financial assistance to
               provide for water development in disadvantaged
               communities.), Committee Report 1st House, Substituted
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB1260, Committee Report 1st House, Substituted:  negative impact     *
*  of $(17,726,468) through the biennium ending August 31, 2001.         *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                        $(17,363,234)  *
          *       2001                            (363,234)  *
          *       2002                            (363,234)  *
          *       2003                            (363,234)  *
          *       2004                            (363,234)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
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*Fiscal    Probable Savings/(Cost) from     Change in Number of State     *
* Year         General Revenue Fund           Employees from FY 1999      *
*                      0001                                               *
*  2000                     $(17,363,234)                             7.0 *
*  2001                         (363,234)                             7.0 *
*  2002                         (363,234)                             7.0 *
*  2003                         (363,234)                             7.0 *
*  2004                         (363,234)                             7.0 *
***************************************************************************
  
Fiscal Analysis
  
The bill would authorize low-interest or no-interest loans for the
construction, acquisition, or improvement of water supply projects and
sewer service facilities to serve disadvantaged communities.
  
  
Methodology
  
This fiscal note analysis assumes that a $17 million direct appropriation
out of general revenue would be used to capitalize a no-interest loan
fund and buy down interest rates for low-interest loans.  The Texas
Water Development Board estimates that a program of this volume would
require seven full-time equivalent employees at an annual cost of
$363,234.  The bill's cost would be dependent on the amount of
low-interest loans and no-interest loans to be distributed to
disadvantaged communities.
  
  
Local Government Impact
  
Units of local government would save an amount equal to the difference
between debt service on loans at market rates and debt service on low-
or no-interest loans.
  
  
Source Agencies:   580   Water Development Board
LBB Staff:         JK, TL, DM