Austin, Texas
                    FISCAL NOTE, 77th Regular Session
                              April 5, 2001
          TO:  Honorable David Sibley, Chair, Senate Committee on
               Business & Commerce
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  SB1296  by Lucio (Relating to the issuance of general
               obligation bonds to provide financial assistance to
               counties for roadway projects to serve border
               colonias.), Committee Report 1st House, Substituted
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  SB1296, Committee Report 1st House, Substituted:  negative impact     *
*  of $(7,480,000) 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                                   $0  *
          *       2003                          (7,480,000)  *
          *       2004                         (12,753,200)  *
          *       2005                         (15,394,500)  *
          *       2006                         (15,400,400)  *
All Funds, Five-Year Impact:
*Fiscal      Probable        Probable        Probable       Change in     *
* Year    Savings/(Cost)     Revenue      Savings/(Cost) Number of State  *
*          from General    Gain/(Loss)      from Bond     Employees from  *
*          Revenue Fund     from Bond        Proceeds        FY 2001      *
*              0001          Proceeds          0854                       *
*                              0854                                       *
*  2002                $0              $0              $0             0.0 *
*  2003       (7,480,000)      42,500,000    (42,500,000)             0.0 *
*  2004      (12,753,200)      85,000,000    (85,000,000)             0.0 *
*  2005      (15,394,500)      47,500,000    (47,500,000)             0.0 *
*  2006      (15,400,400)               0               0             0.0 *
Technology Impact
Fiscal Analysis
Assuming the voters of Texas adopt the related constitutional amendment
in November 2001, this bill would authorize the Texas Public Finance
Authority to issue $175.0 million in general obligation bonds for county
roads to improve access to colonias.  Such funds could be used for
construction, right-of-way acquisitions and utility adjustments.

The bill as substituted directs the Office of the Governor to determine
the number of bond issues, the amount and time of each issue.  TxDOT is
responsible for administering the use of the bond proceeds and
determining in cooperation with the Office of the Governor the criteria
for selecting the counties and colonias roadway projects eligible for
bond funding. TxDOT is also required to work in cooperation with the
Secretary of State and the Texas A & M University Center for Housing and
Urban Development in the administration of this program.
The only significant additional cost anticipated to result from the
adoption of this legislation is annual debt service payments to retire
the general obligation bonds.  For the 2002-03 biennium, these debt
service requirements total an estimated $7.4 million.  Beginning in
fiscal year 2004, annual debt service requirements increase to $15.4
million.  Generally, debt service requirements are paid for out of the
General Revenue Fund.   Annual debt service payments were calculated
assuming a 6 percent interest rate and level debt service payments over
twenty (20) years.  It is assumed that there would be two bond issues: an
$80.0 million issue in February 2002; and a second issue of the
remaining $90.0 million in August 2003.  Assuming 1,000 miles are
constructed each fiscal year and an average construction cost per mile of
$85,000, all bond proceeds would be expended by fiscal year 2004.

Both TxDOT and the Texas A & M University Center for Housing and Urban
Development anticipate additional administrative costs as a result of
this legislation.  However, it appears that both agencies could absorb
any additional administrative costs within existing resources.
Local Government Impact
Assuming the constitutional amendment is adopted by the voters in
November 2001, the proposed bill would result in bond funds being
available to counties to construct, improve or develop roads in, around
or near colonias.  The bond proceeds would be distributed to
approximately 22 counties within the El Paso, Laredo and Pharr highway
districts.  It is anticipated that participating counties would provide
in-kind matching contributions of 10 to 15 percent.  These matching
contributions would likely take the form of labor provided by county
road crews.
Source Agencies:   301   Office of the Governor, 710   The Texas A&M
                   University System
LBB Staff:         JK, JO, ZS