LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 21, 1999 TO: Honorable Eddie Lucio, Chair, Senate Committee on Border Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB 1287 by Lucio (Relating to housing loans to low income families.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1287, As Introduced: negative impact of $(2,300,000) 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 $0 * * 2001 (2,300,000) * * 2002 (2,300,000) * * 2003 (2,300,000) * * 2004 (2,300,000) * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Probable Revenue Probable * * Year Savings/(Cost) from Gain/(Loss) from Savings/(Cost) from * * General Revenue Fund Housing Trust Fund - Housing Trust Fund - * * 0001 Outside Treasury Outside Treasury * * 2000 $0 $0 $0 * * 2001 (2,300,000) 25,000,000 (25,000,000) * * 2002 (2,300,000) 0 0 * * 2003 (2,300,000) 0 0 * * 2004 (2,300,000) 0 0 * ************************************************************************** Fiscal Analysis The bill would amend Chapter 2306 of the Government Code by establishing an Owner-Builder Program at the Texas Department of Housing and Community Affairs (TDHCA). TDHCA would establish eligibility requirements and make loans for owner builders through the colonia self-help centers. The bill would define the circumstances under which TDHCA could make loans for the program and would require TDHCA to solicit gifts and grants to fund the program. The bill would allow TDHCA to utilize funds available under the Housing Trust Fund; eligible federal block grants; proceeds from certain state general obligation bonds; and loan repayments received under the program. The bill would limit the number of loans to 500 in fiscal year 2000 and 1,000 in fiscal year 2001. The bill would require TDHCA to evaluate and report the repayment history of recipients of loans under the program to the Governor, the Lt. Governor, and the Speaker of the House no later than November 15, 2000. The bill would take effect September 1, 1999 and would expire September 1, 2001. Methodology The fiscal impact associated with the bill is contingent on the passage and voter approval of Senate Joint Resolution 34, which proposes a constitutional amendment authorizing general obligation debt in an amount not to exceed $30 million for the Owner-Builder Program. No significant fiscal implication to the State is anticipated if Senate Joint Resolution 34 does not receive voter approval. The Bond Review Board (BRB) estimates debt service costs based on the assumption that Senate Joint Resolution 34 would pass and receive voter approval; there would be sufficient authorization for an issuance of $30 million; that each bond issue would have a thirty year maturity; and that there would be level debt service. The BRB estimates that TDHCA would issue the bonds in September 2000, and the annual debt service required for issuing the taxable bonds would cost $2.8 million in additional general revenue in fiscal year 2001 with the cost continuing each following year for the remaining life of the bonds. However, because the bill would limit the number and amount of loans, only $25 million of the authorization could be issued. The estimated debt service is reduced proportionally Local Government Impact No significant fiscal implication to units of local government is anticipated; however, local property tax bases could increase by enhancing the value of land or dwellings that received improvement loans under the program. Source Agencies: 304 Comptroller of Public Accounts, 332 Department of Housing and Community Affairs, 352 Bond Review Board LBB Staff: JK, DE, RT, MW