LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 17, 1999
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1068 by Fraser (relating to the disposition of revenue
from the motor vehicle sales tax by certain counties),
Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Fundsfor *
* SB1068, Committee Report 2nd House, Substituted: negative impact *
* of $(21,000) through the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(10,000) *
* 2001 (11,000) *
* 2002 (12,000) *
* 2003 (12,000) *
* 2004 (13,000) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Probable Revenue Probable Revenue *
* Year Gain/(Loss) to Gain/(Loss) to State Gain/(Loss) to *
* General Revenue Fund Highway Fund Counties' Road and *
* 0001 0006 Bridge Funds *
* 2000 $(10,000) $(459,000) $(469,000) *
* 2001 (11,000) (479,000) (490,000) *
* 2002 (12,000) (510,000) (522,000) *
* 2003 (12,000) (533,000) (545,000) *
* 2004 (13,000) (556,000) (569,000) *
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Fiscal Analysis
The bill would amend the Transportation Code and the Tax Code as they
relate to the disposition by counties of motor vehicle registration fees
and sales tax revenue.
The bill would amend Chapter 502 of the Transportation Code to reverse
the order of two steps in the formula used by counties to determine the
commission income retained by the counties from motor vehicle
registration fees and sales taxes. Counties would be entitled to keep an
amount from registration fees of up to $125,000 before computing the
additional amount equal to 5 percent of motor vehicle sales tax
collections.
In addition, Chapter 152 of the Tax Code would be amended to say that in
qualifying counties, the county tax assessor-collector could estimate
the amount of motor vehicle sales tax collections to be requested from
the Comptroller.
Methodology
The bill states (on page 2, lines 16 through 20) that a tax
assessor-collector would credit the county road and bridge fund each week
with an amount equal to 5 percent of the taxes and penalties collected
in the preceding calendar year. A literal interpretation of this
language would allow the county to retain each year an amount equal to
260 percent of the previous calendar year collections (5 percent times
52 weeks). The fiscal note assumes that the intent is to credit the
county road and bridge fund an amount equal to the net collections made
during the previous week until the amounts so credited totaled 5 percent
of the taxes and penalties collected in the previous calendar year.
The formula used to allocate motor vehicle registration fees to counties
has a close relationship to a county's population. The larger the county
population, generally, the greater the amount of fees retained. There
is a point, under the formula, when a county no longer shares in
registration fees and sends all collections to the state.
Texas counties keep the first $60,000 of motor vehicle registration fees
collected and, once reached, an additional amount equal to $350 for each
mile of county road maintained to a maximum of $175,000. About 24
counties never collect the full $235,000, and most of these do not
collect even $60,000. These counties keep all registration fees and
motor vehicle sales taxes collected and would not be affected under the
bill. A special provision in the Tax Code allows counties not receiving
an amount equal to 5 percent of the motor vehicle sales taxes collected
out of registrations, to petition the Comptroller to keep a portion of
their allocation out of taxes collected.
The bill would allow counties to keep half of all collections up to
$125,000 and then an amount equal to 5 percent of all motor vehicle sales
taxes collected, including seller financed sales, out of registrations.
This change in the formula would allow about 80 counties to keep
additional registration fees. Some counties also would keep additional
amounts out of motor vehicle sales taxes collected.
The remaining 150 counties would see no change in the allocation amounts
being retained.
Local Government Impact
The fiscal impact to local units of government is shown in the table
above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, BB, BR, SM