LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                                May 7, 1999
  
  
          TO:  Honorable Paul Sadler, Chair, House Committee on Public
               Education
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2358  by Olivo (relating to open-enrollment charter
               schools), Committee Report 1st House, Substituted
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB2358, Committee Report 1st House, Substituted:  negative impact     *
*  of $(168,540) 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                           $(159,240)  *
          *       2001                              (9,300)  *
          *       2002                              (9,300)  *
          *       2003                              (9,300)  *
          *       2004                              (9,300)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year      Probable Savings/(Cost) from      *
         *                      General Revenue Fund          *
         *                              0001                  *
         *      2000                               $(159,240) *
         *      2001                                  (9,300) *
         *      2002                                  (9,300) *
         *      2003                                  (9,300) *
         *      2004                                  (9,300) *
         *****************************************************
  
Fiscal Analysis
  
The bill would place a two year moratorium on new open-enrollment
charters being granted.

Notwithstanding the current requirement for the State Board of Education
to designate an impartial organization to conduct an annual evaluation of
open-enrollment charter schools, the bill would require the Texas
Education Agency (TEA) to conduct an evaluation of each open-enrollment
charter school.  TEA would submit this report to the governor, lieutenant
governor, and each member of the legislature by December 1, 2000.

The bill would make open-enrollment charter schools subject to statutory
requirements for conducting annual financial audits.

The State Auditor's Office would be responsible for monitoring the State
Board of Education's oversight of open-enrollment charter schools.
  
  
Methodology
  
The Texas Education Agency estimates the cost of evaluating each
open-enrollment charter school would be $136,000 for Fiscal Year 2000.

The State Auditor's Office estimates it would take 500 hours of staff
time in the first year and 200 hours of staff time each year thereafter
to monitor the State Board of Education's efforts.  The total cost of
such monitoring would be $23,240 in the first year and $9,300 per year
thereafter.
  
  
Local Government Impact
  
Currently, the State Board of Education has required open-enrollment
charter schools to complete an annual financial audit, therefore the
statutory requirement proposed in this bill should have no additional
cost implications for the schools.
  
  
Source Agencies:   701   Texas Education Agency - Administration
LBB Staff:         JK, CT, PF