LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 2, 2001
  
  
          TO:  Honorable Steven Wolens, Chair, House Committee on State
               Affairs
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1409  by Junell (Relating to certain restrictions on
               the authority of a regional planning commission, a
               council of governments, or a similar regional planning
               agency to contract to administer or collect a fee for
               administering federal funds.), As Introduced
  
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*  No fiscal implication to the State is anticipated.                    *
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Local Government Impact
  
The bill would prohibit a regional planning commission, a council of
governments, or a similar regional planning agency from contracting to
provide a service for administering federal funds or from collecting a
fee for administering community development block grant program funds
allocated to eligible counties and municipalities.

According to the Texas Association of Regional Councils (TARC), planning
commissions currently charge a 5 percent administrative fee for grant
management.  Private firms charge an administrative fee of 10 percent to
12 percent. Based on those differences, TARC estimates costs to cities
and counties would at least double if they have to manage or contract
with consulting firms for administering federal grant funds instead of
contracting with regional planning commissions.

TARC surveyed their membership and reported that planning commissions
would experience a revenue loss in a range from $65,000 to $200,000
annually as a result of the provisions of the bill.
  
  
Source Agencies:   
LBB Staff:         JK, RB, DB