Austin, Texas
                                   FISCAL NOTE
                               75th Regular Session
                                  May 31, 1997
      TO: Honorable Bob Bullock            Honorable James E. "Pete" Laney
          Lieutenant Governor                Speaker of the 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; authorizing 
the issuance of bonds and the imposition of taxes; granting 
the power of eminent domain; and providing civil penalties.) 
this office has detemined the following:
         Biennial Net Impact to General Revenue Funds by SB370-Conference Committee Report
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; provide for 
specialized professional sports team license plates; allow 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.
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 5 employees per fiscal year and not more than 
$15,000 per employee, or $75,000 annually. 

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 in 
three separate installments. The State Auditor's Office would 
conduct and complete and audit by the first payment date which 
would be not later than December 31, 1997. The remaining payments 
would be required by not later than September 1, 1998 and the 
balance by August 31, 1999. In determining that amount, the 
State Auditor 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.

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 if necessary repayment 
to the department of the start up costs could be initiated in 
the same fiscal year.  

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 would be deposited to the credit 
of the state infrastructure bank.

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 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           Change in Number   
            Savings/(Cost)     of State                                                                   
            from State         Employees from                                                             
            Highway Fund       FY 1997                                                                    
       1998      ($1,631,011)               8.0                                                      
       1998       (1,567,761)               8.0                                                      
       2000         (262,477)               3.0                                                      
       2001         (262,477)               3.0                                                      
       2002         (262,477)               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
               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:   
                      LBB Staff:   JK ,PE ,ML