LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 6, 2001
TO: Honorable Paul Sadler, Chair, House Committee on Public
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB992 by Hochberg (Relating to circumstances under which
a publisher or manufacturer of textbooks must maintain or
arrange for a textbook depository in this state.), As
Introduced
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* No significant fiscal implication to the State is anticipated. *
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The bill amends Section 31.151(a), 31.103(b) and 31.104(b) of the
Education Code to restructure textbook depository requirements.
Publishers or manufacturers of textbooks would maintain a depository in
Texas or arrange with a depository in this state to receive and fill
orders for textbooks, if the home offices are located more than 300 miles
from a Texas border. In the absence of a designated depository,
publishers and manufacturers would fill requisition and replacement
orders for textbooks. The legislation takes effect September 1, 2001.
Under the current structure, textbook publishers pay the freight charges
to get textbooks to the depository as well as a depository fee. The
state pays to ship the books from the depository to local school
districts. The bill does not stipulate that textbook publishers would be
responsible for shipping charges from their own warehouse to a school
district; it is assumed that that charge would be borne by the state.
It is not possible to know how many publishers would, at this time or in
the future, be impacted by the legislation. A publisher or
manufacturer's headquarters could also be located within 300 miles of the
Texas/Mexico border. No figures are currently available regarding
freight charges, insurance, tariffs or other costs associated with
international carriage.
The only publisher currently located within 300 miles of Texas borders is
believed to be Saxon Publishing Company, located in Norman, Oklahoma.
The Textbooks Division of the Texas Education Agency received an analysis
of shipping charges from Norman, Oklahoma versus Dallas, Texas (the site
of a major textbook depository). If this legislation had been in effect
the last time Saxon shipped math textbooks, the increased cost to the
state would have been approximately $27,000. If all publishers
established warehouses within 300 miles of the Texas border, increased
cost to the state could be as high as $300,000 to $400,000 per year. The
legislation does not explicitly give the State Board of Education
authority to establish rules requiring publishers to pay shipping costs.
It is noted that all freight charges are paid through the Textbooks
Division program budget. This bill does not change the current practice
of payment of freight charges. Assuming shipment from Norman, Oklahoma,
it is estimated that truckload costs would increase an average of 38.61%
and shipments in the 500-pound bracket would increase 33.81%. Although
exact cost increments cannot be determined, there could be significant
costs impacting the Textbooks Division budget.
Based on the analysis of the additional mileage to be incurred in
shipping from Norman, Oklahoma to various points in the state, it should
be expected that freight costs from points outside the state will be
greater than the current costs. If that publisher chose to ship directly
and the costs were paid by the state, freight charges are likely to
increase by at least 33%. Reductions in depository charges paid by the
publisher may permit the publisher to reduce future prices for books,
but the law does not require such action.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 701 Texas Education Agency
LBB Staff: JK, CT, UP