LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 9, 2001
  
  
          TO:  Honorable Bob Hunter, Chair, House Committee on State,
               Federal & International Relations
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB310  by Flores (Relating to the establishment and
               operation of veterans cemeteries.), Committee Report 1st
               House, Substituted
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB310, Committee Report 1st House, Substituted:  negative impact      *
*  of $(665,996) through the biennium ending August 31, 2003.            *
*                                                                        *
*  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                *
          *       2002                                   $0  *
          *       2003                            (665,996)  *
          *       2004                            (665,996)  *
          *       2005                          (1,165,492)  *
          *       2006                          (1,165,492)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
***************************************************************************
*Fiscal    Probable Savings/(Cost) from    Probable Savings/(Cost) from   *
* Year         General Revenue Fund          Federal Funds - Federal      *
*                      0001                            0555               *
*  2002                                $0                              $0 *
*  2003                         (665,996)                     (3,600,000) *
*  2004                         (665,996)                               0 *
*  2005                       (1,165,492)                     (2,700,000) *
*  2006                       (1,165,492)                               0 *
***************************************************************************
  
Fiscal Analysis
  
CSHB310 would establish up to seven veterans cemeteries across the state.
The General Land Office (GLO) Veterans Land Board would be responsible
for the operations of the cemeteries including maintenance. The Veterans
Land Board, chairman of the Texas Veterans Commission, and two
representatives of the veterans community selected by the chairman would
be responsible for developing guidelines for site selection of the
cemeteries. The legislation would allow GLO to accept gifts, grants,
money, securities, services, or property for the cemeteries.

According to the GLO, the Department of Veterans Affairs limits its
funding for veterans cemeteries to establishing, expanding, or improving
a cemetery. Any and all costs associated with land acquisition,
administration, operation, and maintenance of the cemeteries are the sole
responsibility of the state.
  
  
Methodology
  
The GLO excluded any costs for land acquisition in its cost estimate of
the legislation based on information from local communities regarding
donation of land for the cemeteries. According to the GLO, local
communities from at least seven geographic regions in the state have
expressed interest in land donation for the cemeteries. As a result, the
GLO does not anticipate any costs associated with the purchase of land
for the cemeteries.

According to the GLO, the Department of Veterans Affairs estimates each
cemetery would receive between $700,000 and $1.1 million (variance due to
geographic location) for the establishment of a cemetery with 1,000
plots. The average of these two numbers, $900,000, was used for the
development cost of each cemetery.

The cost-estimate assumes fiscal year 2002 would be used for the federal
grant application process. Development costs are assumed (federal funds)
for four cemeteries in fiscal year 2003 and three cemeteries in fiscal
year 2005.

The GLO estimates it would need approximately $3.884 million each year
for operating costs associated with seven fully-operational cemeteries
($554,996 each year for each cemetery). The GLO based its estimate on
cemeteries with 1,000 plots. These costs are based on the feasibility
study conducted by the Texas Veterans Commission in 1998 (State Veterans
Cemetery Feasibility Study).

Operating costs (General Revenue Funds) are assumed for four partially
operational cemeteries, defined as less than 100 percent occupied
resulting in less operating costs, in fiscal years 2003, 2004 and 2005.
The estimate for fiscal years 2003, 2004 and 2005 assumes operational
costs at 30 percent of the total for the four cemeteries. Three
additional cemeteries are estimated to be partially operational by
fiscal year 2006, for a total of seven cemeteries. The estimate for
fiscal year 2006 assumes operational costs at 30 percent of the total
for the seven cemeteries.
  
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   808   Texas Historical Commission, 305   General Land
                   Office
LBB Staff:         JK, JO, JC