LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 9, 2001
  
  
          TO:  Honorable Paul Sadler, Chair, House Committee on Public
               Education
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB604  by George (Relating to the small and mid-sized
               district adjustment under the public school finance
               system.), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB604, As Introduced:  negative impact of $(29,400,000) 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                        $(14,100,000)  *
          *       2003                         (15,300,000)  *
          *       2004                         (15,500,000)  *
          *       2005                         (15,600,000)  *
          *       2006                         (15,600,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year    Probable Revenue Gain/(Loss) from   *
         *                      General Revenue Fund          *
         *                              0001                  *
         *      2002                            $(14,100,000) *
         *      2003                             (15,300,000) *
         *      2004                             (15,500,000) *
         *      2005                             (15,600,000) *
         *      2006                             (15,600,000) *
         *****************************************************
  
Fiscal Analysis
  
Under current law, school districts identified as property-wealthy and
subject to the requirements of Chapter 41 are not eligible for the
mid-size adjustment.  The bill grants the adjustment to these districts.
  
  
Methodology
  
A school finance model was run to identify the fiscal impact of applying
the mid-size school adjustment to school districts subject to Chapter
41. The cost represents the resulting reduction in recapture payments
from the eligible Chapter 41 districts.
  
  
Local Government Impact
  
There would be a increase in the amount of local tax revenue that certain
districts would be permitted to keep.
  
  
Source Agencies:   701   Texas Education Agency
LBB Staff:         JK, CT, PF, RN