Austin, Texas
                    FISCAL NOTE, 76th Regular Session
                              March 27, 1999
          TO:  Honorable David Swinford, Chair, House Committee on
               Agriculture & Livestock
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  HB3050 by Counts (Relating to the development of
               agricultural enterprises and programs.), As Introduced
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB3050, As Introduced:  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 $15,000,000 to $25,000,000.

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.

The bill would transfer Section 481.0067, Government Code, to Chapter 12,
Texas Agricultural Code.  No later than January 1, 2000, the TDA would
establish and maintain the Office of Rural Affairs which, prior to this
legislation, was part of the Texas Department of Economic Development
(TDED).  Under the bill, the TDA would receive all appropriations,
assets, and FTEs to facilitate this transfer from TDED.
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 $4,000,000 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

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.

There would be no fiscal impact to moving the Office of Rural Affairs to
TDA as the funding which supports this activity would be transferred
from TDED to TDA.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:   
LBB Staff:         JK, DE, TT