LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 17, 2001
TO: Honorable Clyde Alexander, Chair, House Committee on
Transportation
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB52 by Oliveira (Relating to the financing and
construction of highways by the Texas Department of
Transportation.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB52, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* 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 *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Probable Probable *
* Year Gain/(Loss) from Savings/(Cost) from Savings/(Cost) from *
* State Highway Fund - State Highway Fund Federal Funds - *
* Bond Proceeds 0006 Federal *
* 0006 0555 *
* 2002 $712,645,000 $(246,852,170) $(37,215,346) *
* 2003 711,695,000 (502,724,741) (111,778,962) *
* 2004 0 (512,062,168) (149,128,670) *
* 2005 0 (274,513,331) (149,126,662) *
* 2006 0 (37,281,979) (149,127,915) *
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Fiscal Analysis
The bill is contingent on the passage and voter approval of House Joint
Resolution (HJR) 13 or similar legislation which proposes a
constitutional amendment authorizing the Texas Transportation Commission
(TTC) to issue bonds and enter into bond enhancement agreements,
including Grant Anticipation Revenue Bonds, to fund improvements to the
state highway system. The bill would establish requirements and
guidelines for the use of bond proceeds and the annual debt service on
the bonds. The bill would remove the TTC's authority to issue bonds
after September 1, 2005.
The bill would also require the Sunset Advisory Commission (SAC) to
conduct a performance evaluation of the issuance of bonds authorized by
the bill before September 1, 2004. The bill would require SAC to report
its findings to the Governor, the Lieutenant Governor, and the Speaker of
the House of Representatives before each regularly scheduled legislative
session. The reporting requirement made by the bill would expire
September 1, 2005.
The bill would take effect on the date on which the constitutional
amendment proposed by the 77th Legislature, Regular Session, authorizing
the issuance of bonds for certain improvements to the state highway
system would take effect. If that amendment does not receive approval
by the voters, this bill would have no effect.
Methodology
Contingent on the passage and voter approval of HJR 13, or similar
legislation, the bill would require debt service costs estimated on the
assumption that there would be two separate bond issuances of $750
million on February 1, 2002 and 2003 at an interest rate of 4.4 and 4.5
percent respectively; that bond proceeds would fund actual construction
costs; that each issuance would be for a ten year period; that there
would be level debt service; that repayments would be financed through
20 percent state funds and 80 percent federal funds; and that the amount
of each bond issue would be reduced by the estimated interest earned on
the balance of bond proceeds deposited during each of the three-year
construction periods. Other assumptions include fees of $400,000 for
the cost of issuance; underwriting fees of $5 per $1,000 of bonds; and
that the bonds would be issued over a two year period at similar project
cost amounts above $50 million. Total costs (federal and state
portions) include approximately $46.5 million in fiscal year 2002,
$139.7 million in fiscal year 2003, and $186.4 million for fiscal years
2004-06 respectively.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 352 Texas Bond Review Board, 601 Texas Department
of Transportation, 304 Comptroller of Public
Accounts
LBB Staff: JK, JO, RT, MW