LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 5, 1997 TO: Honorable Clyde Alexander, Chair IN RE: Senate Bill No. 370, As Engrossed Committee on Transportation By: Armbrister House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB370 ( Relating to the continuation and functions of the Texas Department of Transportation, the abolition of the Texas Turnpike Authority, and the creation of regional tollway authorities.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB370-As Engrossed Implementing the provisions of the bill would result in a net impact of $0 to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The bill would continue the Texas Department of Transportation (TxDot) for twelve years. Provisions of the bill would: require the department to conduct a two-year pilot project to determine if outsourcing maintenance and repair of department vehicles is cost-effective; authorize the department to create and use a State Infrastructure Bank; authorize the department to provide financial assistance for moving related expenses; require the department to establish an emergency highway call box system; transfer the functions of the Texas Turnpike authority to the department and create a Texas Turnpike Authority Division within TxDot and; authorize the creation of Regional Tollway Authorities and establishes the North Texas Tollway Authority comprising Collin, Dallas, Denton, and Tarrant counties. Methodolgy The bill would authorize the department to provide reimbursement to transferred employees for expenses or costs related to selling existing housing and purchasing and financing comparable replacement housing on approval by the director. Reimbursement would be for not more than 25 employees per fiscal year and not more than $15,000 per employee. The department estimated that three employees at $15,000 would be approved for relocation expenses annually . The cost included in the estimate for this provision was for reimbursement of 25 employees at $15,000 or $375,000 each fiscal year. The bill authorizes the department to create and use a State Infrastructure Bank (SIB) to encourage public and private investment in transportation facilities, and to develop financing techniques. A staff of three FTEs plus operating costs for the implementation of the SIB would total $210,427 in fiscal year 1998 and $187,477 in fiscal year 1999 and thereafter. Provisions in the bill creating the North Texas Tollway Authority (NTTA) and the Texas Turnpike Authority (TTA) division within TxDot also transfer assets from the Texas Turnpike Authority to the North Texas Tollway Authority. The NTTA would assume and become liable for all duties and obligations of the TTA related to those assets, rights and properties transferred. In addition, as a consideration for the transfer of certain properties to the NTTA, a provision of the bill provides for an amount to be paid to the Department of Transportation, agreed upon by the NTTA and the department, by no later than October 1, 1997. In determining that amount, the NTTA and the department would ensure that, following the payment, the NTTA is in compliance with all agreements assumed by the NTTA and reserves would be maintained at a level consistent with TTA historical practices. Existing obligations incurred by the TTA for feasibility studies for US 183-A and the SH 130 totaling $1,150,000 would need to be funded by the Department until funds generated by projects initiated by TTA could be made available to the TTA division to assume responsibility for the continuation of the studies. In addition, start up costs for the division would need to be made available to allow the division to begin its functions. Those amounts, for five FTEs and operating costs, are $345,584 for fiscal year 1998 and $305,284 for fiscal year 1999. The Division could be self sustaining after projects come on-line by fiscal year 2000 and repayment to the department of the start up costs could be initiated in the same fiscal year. Should a specific amount identified to be paid by the NTTA to the department by October 1, 1997 be higher than the identified outstanding obligations and startup costs, the amounts provided by the department to the TTA division for those costs could be assumed by the Division and therefore provisions related to the creation of the TTA division would have no fiscal impact to the department. The bill would require the department to conduct a two-year pilot project to determine whether contracting with a private entity for maintenance and repair services of all department vehicles would be cost-effective. Any cost savings resulting from the pilot project and from funds appropriated would be used to assist counties with materials to repair county roads damaged as a result of legally permitted overweight truck traffic. The total value of the assistance would be at least $20.0 million a year. The department estimated that the cost to the department would be an additional $14.0 million annually. The bill would require the department to develop a cost/benefit analysis between the use of local materials previously incorporated into roadways verses use of materials blended or transported from other sources. The department has estimated that the research projects would cost approximately $1.0 million per year for fiscal years 1998 and 1999. The bill would require the department to establish an emergency call box program along the state highway system. Farm-to-Market and Ranch-to-Market roads would be excluded. The department has estimated that installation of approximately 11,000 call boxes would be accomplished over a ten year period. The estimated program cost for the first five years is $36 million with revenues required to cover the cost of the program. 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 Change in Number Savings/(Cost) Gain/(Loss) from of State from State State Highway Fund Employees from Highway Fund FY 1997 0006 0006 1998 ($22,733,215) $0 8.0 1998 (22,261,365) 11,389,250 8.0 2000 (21,771,600) 11,482,500 3.0 2001 (22,498,077) 11,598,000 3.0 2002 (23,239,477) 11,713,500 3.0 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 $0 1999 0 2000 0 2001 0 2002 0 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Agencies: 601 Department of Transportation LBB Staff: JK ,PE ,ML