LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 2, 2001
TO: Honorable Kip Averitt, Chair, House Committee on
Financial Institutions
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2369 by George (Relating to state financing of the
development and production of Texas biotechnological and
biomedical products and small businesses; providing for
the issuance of bonds.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2369, As Introduced: negative impact of $(6,450,000) 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (6,450,000) *
* 2004 (5,670,000) *
* 2005 (5,490,000) *
* 2006 (5,310,000) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 2001 *
* 0001 *
* 2002 $0 0.0 *
* 2003 (6,450,000) 0.0 *
* 2004 (5,670,000) 0.0 *
* 2005 (5,490,000) 0.0 *
* 2006 (5,310,000) 0.0 *
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Fiscal Analysis
This bill creates a new Product Development and Small Business Incubator
Board within the Office of the Comptroller and authorizes the Board to
issue general obligation bonds for the development or improvement of
products and local business incubators across the state. The
Constitution (Section 71, Article XVI) allows up to$45 million in bond
proceeds to be issued - $20 million for business incubators, and $25
million for product development and improvements - for loans to small
businesses for product development and local business incubators.
Preference would be given to products and businesses in the area of
biotechnology and biomedicine with the greatest likelihood of commercial
success, job creation and job retention in the state.
The estimated cost of implementing the provisions of this bill is limited
to debt service requirements, which should average $4,170,000 per fiscal
year.
Methodology
For purposes of this analysis it is assumed that the total bond authority
of $45.0 million would be issued in February 2002, that bonds would be
20 year taxable bonds, and would be sold at an interest rate of 8
percent. It is further assumed that the General Revenue Fund would fund
the annual debt service requirements. However, there is nothing in the
legislation prohibiting the use of loan repayments, application fees or
interest earnings on these funds to fund debt service requirements.
According to the Comptroller, this bill would have no significant fiscal
impact on agency administrative costs. Therefore, it is assumed that
the Comptroller would require no additional resources to implement the
provisions of this bill.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated. Loans for local business incubators and to small
businesses for product development could result in economic gains to the
communities in which these businesses are located.
Source Agencies: 304 Comptroller of Public Accounts, 352 Texas
Bond Review Board, 480 Department of Economic
Development, 347 Texas Public Finance Authority
LBB Staff: JK, JO, ZS, MF