LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 1, 1999
TO: Honorable David Swinford, Chair, House Committee on
Agriculture & Livestock
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB 3050 by Counts (relating to the administration of
certain loan programs by the Texas Agricultural Finance
Authority and to the promotion of the development of
agriculture-related rural businesses), Committee Report
1st House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3050, Committee Report 1st House, Substituted: negative impact *
* of $(160,000) 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 $(80,000) *
* 2001 (80,000) *
* 2002 (80,000) *
* 2003 (80,000) *
* 2004 (80,000) *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) *
* Year from General Revenue Fund from Texas Agricultural Fund *
* 0001 0683 *
* 2000 $(80,000) $286,250 *
* 2001 (80,000) 549,009 *
* 2002 (80,000) 728,777 *
* 2003 (80,000) 815,531 *
* 2004 (80,000) 770,731 *
***************************************************************************
Technology Impact
The Texas Department of Agriculture (TDA) would absorb about $5,000 worth
of personal computer software costs necessary to perform advanced
financial calculations.
Fiscal Analysis
The bill would amend Chapter 44 of the Texas Agriculture Code relating to
the Microenterprise Support Program by increasing the maximum amount for
a start-up program loan from $15,000 to $25,000 and an existing program
loan from $30,000 to $50,000. The Rural Microenterprise Fund would
become the Rural Microenterprise Account in the General Revenue Fund.
The bill would increase the amount of state funds that could be placed in
Linked Deposits in eligible banks from $15 million to $25 million.
The Loan Guaranty Program would be expanded to authorize loans and loan
guarantees to promote the development of agriculture-related rural
businesses, including businesses that provide recreation activities on
agricultural land and for insect eradication and suppression programs,
including boll weevil eradication.
The bill would expand and enhance the opportunities for Young Farmers
under the Young Farmer Loan Guarantee Program and increase the maximum
loan amount from $100,000 to $250,000. The Young Farmer Loan Guarantee
Account in the General Revenue Fund would become the Young Farmer Loan
Guarantee Account in the Texas Agricultural Fund.
The bill would amend the Transportation Code, Section 502.174, by
depositing farm vehicle assessments to the Young Farmer Loan Guarantee
Account in the Texas Agricultural Fund.
Methodology
According to TDA, due to the differential in yields (-2%) resulting from
funds being deposited in Linked Deposits versus Treasury Operations Pool,
the bill would result in a small decrease in interest earnings in the
General Revenue Fund. Based on linked deposits outstanding in FY 1998,
this estimate assumes an average outstanding balance of $4 million in
additional linked deposits that would be authorized by the bill.
Therefore, the projected decrease in interest earned by the General
Revenue Fund would be $80,000 per year. Note: The actual amount is
dependent on the outstanding balance in linked deposit loans at any given
time. According to the Comptroller's Office, if the entire $10 million
in additional Linked Deposits were to be used, there could be a maximum
loss of $210,000 per year to the General Revenue Fund.
According to TDA, Fund 0683 would realize a gain of between $285,000 to
$769,481 per year from the Loan Guaranty Program due to projected loans
and loan guarantees for agriculture-related rural businesses and boll
weevil eradication programs. Additionally, loan application fees ($50)
for 25 new loans under the Young Farmer Loan Guarantee program would
generate $1,250 per year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, DE, TT