LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 17, 1997 TO: Honorable Bill Ratliff, Chair IN RE: Senate Bill No. 1741 Committee on Finance By: Armbrister Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1741 ( Relating to the authority of the Parks and Wildlife Department to issue revenue bonds and to the allocation of certain sales, excise, and use tax revenue to the Parks and Wildlife Department for debt service on revenue bonds.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1741-As Introduced Implementing the provisions of the bill would result in a net negative impact of $(10,000,000) to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The bill would amend the Parks and Wildlife Code authorize the Texas Parks and Wildlife Department to request the issuance of up to $60 million in revenue bonds. The bonds would be issued by the Texas Public Finance Authority and would be used for the repair, renovation, improvement, and equipping of parks and wildlife facilities. The bond proceeds would be deposited to the credit of the Texas Parks and Wildlife Capital GR-Account 5004. The bill would limit the amounts that the State Parks GR-Account 0064 and the Texas Recreation and Parks GR-Account 0467 would receive in state sales tax revenues from the sale of sporting goods. Chapter 151 of the Tax Code would be amended to increase the maximum annual credit of sales tax on sporting goods to the Parks and Wildlife Department from $32 million to $37 million. The bill would take effect September 1, 1997. Methodolgy The bill would have no effect on the State Parks Account and the Texas Recreation and Parks Accounts because their formulas are currently computed using the limit proposed by the bill. The amounts above the current limit of $32 million and up to the new $37 million cap would be credited to the Parks & Wildlife Capital Account in the General Revenue Fund. The bonds issued by the department would be revenue bonds and would thus be supported directly by the revenues of the facilities constructed or improved. Unless otherwise specified in the indenture, holders of these revenue bonds would have no claims on the issuer's other resources. The cost of debt service in the following table is provided for illustrative purposes only as the bill does not specify the increments of the bond issuance. It assumes that the $60 million of bond authority that would be granted upon passage of the bill would be issued in four $15 million annual installments. The estimate also assumes that the debt service would be paid out of the GR dedicated Texas Parks and Wildlife Capital Account 5004. The following are the total estimated debt service payment amounts (principal and interest) that will be incurred on $15 million bond issues, each with a 20 year maturity, issued annually for four years. It is assumed that the bonds will be fixed-rate and tax-exempt, issued in the 1998 fiscal year, and will remain outstanding for 20 years, paying level annual debt service amounts. 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 Revenue Probable Revenue Probable Gain/(Loss) from Gain/(Loss) from Savings/(Cost) General Revenue Texas Parks and from Texas Parks Fund Wildlife Capital and Wildlife Account/ Capital Account/ GR-Dedicated GR-Dedicated 0001 5004 5004 1998 ($5,000,000) $5,000,000 ($1,288,998) 1998 (5,000,000) 5,000,000 (2,581,543) 2000 (5,000,000) 5,000,000 (3,872,698) 2001 (5,000,000) 5,000,000 (5,160,813) 2002 (5,000,000) 5,000,000 (5,160,180) 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 ($5,000,000) 1999 (5,000,000) 2000 (5,000,000) 2001 (5,000,000) 2002 (5,000,000) 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: 802 Parks and Wildlife Department 347 Texas Public Finance Authority 352 Bond Review Board 304 Comptroller of Public Accounts LBB Staff: JK ,RR ,SM