LEGISLATIVE BUDGET BOARD 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 Senate 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. 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 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 0006 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 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