LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                            February 14, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB341  by Keffer (Relating to disposition by counties of
               motor vehicle registration fees and sales tax revenue.),
               As Introduced
  
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*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB341, As Introduced:  negative impact of $(4,475,738,000) through    *
*  the biennium ending August 31, 2003.                                  *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2002                     $(1,722,431,000)  *
          *       2003                      (2,753,307,000)  *
          *       2004                      (2,906,116,000)  *
          *       2005                      (3,081,936,000)  *
          *       2006                      (3,271,475,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
**************************************************************************
*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 &    *
*                0001                 0006             Bridge Funds      *
*  2002       $(1,722,431,000)       $(463,883,000)       $2,186,313,000 *
*  2003        (2,753,307,000)        (741,517,000)        3,494,824,000 *
*  2004        (2,906,116,000)        (782,671,000)        3,688,787,000 *
*  2005        (3,081,936,000)        (830,023,000)        3,911,959,000 *
*  2006        (3,271,475,000)        (881,070,000)        4,152,544,000 *
**************************************************************************
  
Fiscal Analysis
  
The bill would amend Chapter 152 of the Tax Code and Chapter 502 of the
Transportation Code to change the formula used to determine the amount of
registration fees and motor vehicle sales and use tax collections
retained by a county tax assessor-collector as the county's reimbursement
for processing motor vehicle transactions.

The bill would take effect January 1, 2002.
  
  
Methodology
  
Reimbursements for Texas counties were computed under the current formula
and the proposed formula using fiscal and calendar 2000 data.

Under the bill, the proposed formula would include a new component that
would require a county, each week, to compute and retain, out of its
registration fee collections, an amount equal to 5 percent of that
county's motor vehicle sales tax and penalty collections in the previous
calendar year.  Therefore, the bill would allow the county to retain each
year an amount equal to 260 percent of the previous county year
collections (five percent times 52 weeks).

Under current law, a county is entitled to retain, out of its
registration fee collections, an amount equal to 5 percent of the
previous calendar year's motor vehicle sales tax and penalty collections
each year.  Also under current law, if a county's registration
collections are insufficient to meet the retainage amount calculated from
the formula, the Comptroller must, upon request, authorize the county to
retain, from that county's motor vehicle sales and use tax collections,
the amount necessary to make up for the deficiency.  This provision would
continue in effect under this bill.  Based on the proposed formula, this
bill would allow counties to keep virtually all of the registration fee
and motor vehicle sales tax revenues that it collected.

Note:  Under the provisions of the bill, the State Highway Fund 0006
could receive a split amount of $125,000 from most counties (a component
in the formula), but this is uncertain because the bill is unclear on
this point.  The following fiscal impact statement is based on the
assumption that the $125,000 split amount would be forwarded to Fund
0006, instead of being retained by the county.

The fiscal impact was adjusted for the January 2002 implementation date.
  
  
Local Government Impact
  
Local units of government would have a corresponding fiscal impact from
sales tax revenues, as indicated in the table above.
  
  
Source Agencies:   304   Comptroller of Public Accounts, 601   Texas
                   Department of Transportation
LBB Staff:         JK, SD, WP, SM