LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION Revision 1 March 17, 2009 TO: Honorable Mark Homer, Chair, House Committee on Culture, Recreation & Tourism FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2242 by Leibowitz (Relating to the abolition of the Texas cultural endowment fund.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2242, As Introduced: an impact of $0 through the biennium ending August 31, 2011. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
Revision 1
March 17, 2009
Revision 1
Revision 1
TO: Honorable Mark Homer, Chair, House Committee on Culture, Recreation & Tourism FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2242 by Leibowitz (Relating to the abolition of the Texas cultural endowment fund.), As Introduced
TO: Honorable Mark Homer, Chair, House Committee on Culture, Recreation & Tourism
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB2242 by Leibowitz (Relating to the abolition of the Texas cultural endowment fund.), As Introduced
Honorable Mark Homer, Chair, House Committee on Culture, Recreation & Tourism
Honorable Mark Homer, Chair, House Committee on Culture, Recreation & Tourism
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB2242 by Leibowitz (Relating to the abolition of the Texas cultural endowment fund.), As Introduced
HB2242 by Leibowitz (Relating to the abolition of the Texas cultural endowment fund.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2242, As Introduced: an impact of $0 through the biennium ending August 31, 2011. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2242, As Introduced: an impact of $0 through the biennium ending August 31, 2011.
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 2010 $0 2011 $0 2012 $0 2013 $0 2014 $0
2010 $0
2011 $0
2012 $0
2013 $0
2014 $0
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromArts Operating Account334 Probable Revenue Gain fromArts Operating Account334 2010 ($378,717) $7,574,332 2011 ($378,717) $0 2012 ($378,717) $0 2013 ($378,717) $0 2014 ($378,717) $0
Fiscal Year Probable Savings/(Cost) fromArts Operating Account334 Probable Revenue Gain fromArts Operating Account334 2010 ($378,717) $7,574,332 2011 ($378,717) $0 2012 ($378,717) $0 2013 ($378,717) $0 2014 ($378,717) $0
2010 ($378,717) $7,574,332
2011 ($378,717) $0
2012 ($378,717) $0
2013 ($378,717) $0
2014 ($378,717) $0
Fiscal Analysis
The bill would implement one of the options presented in the LBB Government Effectiveness and Efficiency Report to the Eighty-first Legislature entitled, "Optimize the Texas Commission on the Arts' Cultural Endowment Fund." The bill would abolish the Texas Commission on the Arts' Cultural Endowment Fund, established outside the Treasury, and would repeal sections of the Government Code pertaining to the Cultural Endowment Fund.The bill would amend the Government Code to deposit donations of money to the Texas Commission on the Arts in the agencys operating account (#334), and not in the Cultural Endowment Fund. It would repeal statute enabling a person to designate a donation for the Cultural Endowment Fund and statutory references to funds required to be deposited in the Cultural Endowment Fund. It would amend statute to require that proceeds from the sale of compact discs under the Texas Music Project be deposited in the agencys operating fund, and not in the Cultural Endowment Fund.The bill would require the Texas Commission on the Arts to review donor restrictions on donations to the Cultural Endowment Fund before December 1, 2009. On December 1, 2009, the Cultural Endowment Fund would be abolished and the money in the fund would be transferred to the agencys operating fund or returned to donors, as applicable.The bill would take effect September 1, 2009.
Methodology
The bill would result in a one-time gain in General Revenue-Dedicated Funds of $7,574,332 to the Texas Commission on the Arts operating account (#334). The amount available for transfer differs from the LBB Government Effectiveness and Efficiency Report due to losses sustained by the fund since the report's publication. This analysis assumes the Cultural Endowment Fund's value as of January 31, 2009 and that no further changes would be made with regard to the funds fair market value. Because the fund would be abolished on December 1, 2009, the amount available for transfer would have to be adjusted. This analysis also assumes none of the private donations would need to be returned to private donors because the funds balance would be transferred to the agencys operating account to be used to support the agencys operations. However, if upon review of donor restrictions, the agency finds it must return some portion of the estimated $1,839,807 in private donations to the fund, the amount available for transfer would be reduced. The agency indicates there would be no cost associated with review of donations to determine whether they are available for transfer. The agency indicates there is no expectation of increased deposits in its operating account from private donations or deposits from the Texas Music Project as a result of the fund's abolition. The bill would result in a loss of General Revenue Dedicated-Funds from future interest and income earned on the Cultural Endowment Fund that the agency is required by statute to transfer to its operating account annually. This amount is estimated to be $378,717 per year, based on the funds current value and an expected rate of return of 5 percent per year.
The bill would result in a one-time gain in General Revenue-Dedicated Funds of $7,574,332 to the Texas Commission on the Arts operating account (#334). The amount available for transfer differs from the LBB Government Effectiveness and Efficiency Report due to losses sustained by the fund since the report's publication. This analysis assumes the Cultural Endowment Fund's value as of January 31, 2009 and that no further changes would be made with regard to the funds fair market value. Because the fund would be abolished on December 1, 2009, the amount available for transfer would have to be adjusted.
This analysis also assumes none of the private donations would need to be returned to private donors because the funds balance would be transferred to the agencys operating account to be used to support the agencys operations. However, if upon review of donor restrictions, the agency finds it must return some portion of the estimated $1,839,807 in private donations to the fund, the amount available for transfer would be reduced. The agency indicates there would be no cost associated with review of donations to determine whether they are available for transfer.
The agency indicates there is no expectation of increased deposits in its operating account from private donations or deposits from the Texas Music Project as a result of the fund's abolition.
The bill would result in a loss of General Revenue Dedicated-Funds from future interest and income earned on the Cultural Endowment Fund that the agency is required by statute to transfer to its operating account annually. This amount is estimated to be $378,717 per year, based on the funds current value and an expected rate of return of 5 percent per year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 813 Commission on the Arts
813 Commission on the Arts
LBB Staff: JOB, WK, JI, LL
JOB, WK, JI, LL