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:  HB1346  by Tillery (Relating to state assistance with the
               payment of school district debt.), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB1346, As Introduced:  negative impact of $(84,000,000) 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                        $(45,500,000)  *
          *       2003                         (38,500,000)  *
          *       2004                         (38,500,000)  *
          *       2005                         (38,500,000)  *
          *       2006                         (38,500,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year      Probable Savings/(Cost) from      *
         *                     Foundation School Fund         *
         *                              0193                  *
         *      2002                            $(45,500,000) *
         *      2003                             (38,500,000) *
         *      2004                             (38,500,000) *
         *      2005                             (38,500,000) *
         *      2006                             (38,500,000) *
         *****************************************************
  
Fiscal Analysis
  
The bill removes the $0.12 tax rate limitation on the Existing Debt
Allotment (EDA) in Texas Education Code, Chapter 46, Subchapter B.
  
  
Methodology
  
In fiscal year 2001, the ceiling rate for the EDA was raised from $0.12
to $0.29 per $100 of valuation, at a cost of approximately $62,000,000.
Increasing property values and adjustments for student enrollment
projections have resulted in an estimated cost of removing the EDA
ceiling for fiscal year 2002 of $45,500,000 over current law costs, and
$38,500,000 for fiscal year 2003.
  
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.

School districts would be required to reduce related tax effort by a
corresponding amount to reflect this increase in state assistance.
  
  
Source Agencies:   701   Texas Education Agency
LBB Staff:         JK, CT, JM