LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                            February 17, 2001
  
  
          TO:  Honorable Clyde Alexander, Chair, House Committee on
               Transportation
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1484  by Hawley (Relating to the authority of a county
               to borrow from the state infrastructure bank.), As
               Introduced
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill would amend Chapter 222 of the Transportation Code to allow a
county to borrow directly from the State Infrastructure Bank for road
and bridge construction projects.  The bank would be repaid from the
proceeds of ad valorem taxes imposed for that purpose. The bill would
take effect immediately if it received the requisite two-thirds majority
votes of each house of the Legislature.  Otherwise, it would take effect
September 1, 2001.
  
Local Government Impact
  
Local public entities spend time implementing the tax note approach and
incur costs for bond counsel and financial advisors that would not be
otherwise required.  According to the Texas Bond Review Board, issuance
costs primarily consist of underwriters fees, bond counsel fees,
financial advisor fees, rating agency fees, and printing costs.  These
costs average $3.21 per $1,000 issued in 2000.  Generally, the larger the
bond issue, the greater the issuance costs.

Local government entities that choose to utilize the State Infrastructure
Bank because of direct borrowing would incur a cost savings from reduced
issuance costs.  The amount of savings would vary based on the amount of
each loan and the number of projects for which money is borrowed.
  
  
Source Agencies:   
LBB Staff:         JK, JO, MW