LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
February 21, 1997
TO: Honorable Clyde Alexander, Chair IN RE: House Bill No. 1137
Committee on Transportation By: Uher
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1137 ( Relating
to the requirement that the holder of a discharged lien on a
motor vehicle execute the discharge of the lien.) this office
has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1137-As Introduced
Implementing the provisions of the bill would result in a net
positive impact of $1,035,000 to General Revenue Related Funds
through the biennium ending August 31, 1999.
Fiscal Analysis
The bill would require that the holder of a discharged lien
on a motor vehicle execute the discharge of the lien including
the payment of any required fee.
Methodolgy
The Texas Department of Transportation (TxDot) estimates that
there were approximately 2,300,000 lien titles issued in calendar
year 1996. The department assumed that each lien title issued
by the department would sometime during the loan period or at
the payoff date require a corrected title to be issued removing
the lien. For the purpose of this estimate, TxDot left this
number constant for 1998 through 2002.
Information obtained
from the Motor Vehicle Manufacturer's Association (MVMA) MOTOR
VEHICLE FACTS AND FIGURES BOOKLET, shows the percent of buyers
which plan to keep a vehicle from 1 to 5 years. Based on these
percent factors, TxDot calculated the approximate number of
lien titles that would require discharge of lien by a lienholder
beginning in 1998 through 2002, as a result of a new vehicle
purchase, using vehicle as a trade-in, or refinancing.
1998
- 2% X 2,300,000 lien titles = 46,000 corrected titles issued
1999
- 7% X 2,300,000 lien titles = 161,000 corrected titles issued
2000
- 14% X 2,300,000 lien titles = 322,000 corrected titles issued
2001
- 15% X 2,300,000 lien titles = 345,000 corrected titles issued
2002
- 27% X 2,300,000 lien titles = 621,000 corrected titles issued
TxDot
estimates it would realize a revenue gain in 1998 through 2002
as a result of this legislation requiring lienholders to provide
a clear title to the vehicle owner upon payment of lien. The
split of the $13 title fee is $5 for counties, $5 for the General
Revenue Fund (Fund 001), and $3 for the State Highway Fund (006).
The
Department's costs are based on the estimated number corrected
certificates of title that would be processed and issued.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Probable Revenue Probable Revenue
Savings/(Cost) Gain/(Loss) from Gain/(Loss) from
from State State Highway Fund General Revenue
Highway Fund Fund
0006 0006 0001
1998 ($131,100) $138,000 $230,000
1998 (458,850) 483,000 805,000
2000 (917,700) 966,000 1,610,000
2001 (983,250) 1,035,000 1,725,000
2002 (1,769,850) 1,863,000 3,105,000
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $230,000
1999 805,000
2000 1,610,000
2001 1,725,000
2002 3,105,000
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Upon passage of the legislation, counties would realize a revenue
gain from the increased number of corrected titles issued.
Source: Agencies: 601 Department of Transportation
LBB Staff: JK ,PE ,ML