LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 1, 1999
TO: Honorable Jim Solis, Chair, House Committee on Economic
Development
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB64 by Greenberg (Relating to a Texas community
investment program to assist certain businesses in
distressed areas of the state), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB64, As Introduced: negative impact of $(5,000,000) through the *
* biennium ending August 31, 2001. *
* *
* 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 *
* 2000 $(2,500,000) *
* 2001 (2,500,000) *
* 2002 (2,500,000) *
* 2003 (2,500,000) *
* 2004 (2,500,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2000 $(2,500,000) *
* 2001 (2,500,000) *
* 2002 (2,500,000) *
* 2003 (2,500,000) *
* 2004 (2,500,000) *
*****************************************************
Fiscal Analysis
The bill amends Chapter 2306 of the Government Code by adding Subchapter
EE which would require the Department of Housing and Community Affairs to
establish a community investment program in which the department makes
grants or interest-free loans to or purchases stock of community
development investors. These community development investors would make
loans to or invest in businesses located in distressed areas of the state
that could not otherwise qualify for conventional bank loans. The bill
establishes guidelines for the program and rule-making authority for the
department. The bill also requires community development investors to
submit a report to the director which details the status of each
investment or loan made under the program. In addition, the bill
provides for an annual audit of all amounts awarded to the community
development investors.
The bill would take effect September 1, 1999.
Methodology
This analysis assumes that administrative costs relating to the
development, implementation, and monitoring of this program would be
absorbed by the department. In order to implement the program on a
statewide basis, the department estimates that $2.5 million per year in
general revenue would be required to make loans to and investments in
community development investors in distressed areas of the state.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated. As businesses in distressed areas become established and
multiply, local governments may experience increased property and sales
tax revenue related to the corresponding growth.
Source Agencies:
LBB Staff: JK, TH, RT, MW