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 ************************************************************************** * No fiscal implication to the State is anticipated. * ************************************************************************** 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