LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session February 28, 2001 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John Keel, Director, Legislative Budget Board IN RE: HB1280 by Hilderbran (Relating to providing revenue from the gasoline tax to municipalities and counties for constructing and maintaining roads.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1280, As Introduced: negative impact of $(7,080,105) 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. * ************************************************************************** General Revenue-Related Funds, Six-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2001 $(206,204) * * 2002 (5,255,041) * * 2003 (1,618,860) * * 2004 (1,620,814) * * 2005 (1,464,335) * * 2006 (1,466,457) * **************************************************** All Funds, Six-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Change in * * Year Savings/(Cost) Revenue Revenue Number of State * * from General Gain/(Loss) Gain/(Loss) Employees from * * Revenue Fund from State from Counties FY 2000 * * 0001 Highway Fund and * * 0006 Municipalities * * 2001 $(206,204) $0 $0 5.0 * * 2002 (5,255,041) (101,485,000) 101,485,000 38.0 * * 2003 (1,618,860) (113,565,000) 113,565,000 38.0 * * 2004 (1,620,814) (116,495,000) 116,495,000 38.0 * * 2005 (1,464,335) (119,535,000) 119,535,000 32.0 * * 2006 (1,466,457) (122,743,000) 122,743,000 32.0 * *************************************************************************** Technology Impact The technology impact cost would be $3.4 million in fiscal year 2002 for programming a new automated system. The estimate includes CPU, DASD, and tape silo costs of $36,000 for fiscal year 2003 and assumes a 5 percent growth rate every fiscal year thereafter. The technology impact also includes over $200,000 per year for electronic data processing equipment and software. Fiscal Analysis The bill amends Chapter 153 of the Tax Code by allocating a portion of the state gasoline tax to the county or municipality in which the gasoline was sold. The state gasoline tax would remain at $0.20 per gallon, but $0.01 of the gasoline tax would be distributed to the county or municipality in which the gasoline was sold. The $0.01 allotment would be taken from the portion of the tax presently deposited in the State Highway Fund 0006. The funds distributed to counties or municipalities would be deposited and maintained by the local entities in accounts separate from all other local revenue accounts. Local entities could use the funds only to acquire rights-of-way and to construct and maintain roads. The bill requires dealers and gasoline jobbers to include information in their tax reports specifying how many gallons of taxable gasoline were sold in each county in Texas. These reports would be obliged to indicate how many gallons of taxable gasoline were sold within each municipality of a county. Each month, the Comptroller's Office would compute, for the previous month: the total number of gallons of taxable gasoline sold, the total number of gallons sold in each county but outside of a municipality, and the total number of gallons sold in each county and inside of a municipality. The Comptroller's Office would then allocate a portion of the gasoline tax collected equivalent to one cent per gallon sold to municipalities or counties. The bill takes effect October 1, 2001. Methodology This estimate is based on an analysis made by the Comptroller's Office. The Comptroller's Office assumed that the duplication of reported taxable gasoline sales by jobbers to dealers could be corrected by jobbers and dealers filing additional supplements with the Comptroller's Office. As written, the bill would not permit the capture of information relating to taxable gasoline sales by distributors to bulk end-users. The Comptroller's Office also assumed that distributors filing additional supplement information would yield data on county-specific gasoline sales. Forecasted gasoline tax revenues contained in the Comptroller's 2002-2003 Biennial Revenue Estimate, as well as projections through 2006, were the bases for estimates of the bill's proposed allocation amounts. However, the estimate for fiscal year 2002 was adjusted for the October 1, 2001 effective date. The Comptroller's Office estimated an additional five persons would be needed in fiscal year 2001 and 38 persons in fiscal year 2002 and each year thereafter to handle the increased workload of developing a system to generate and process data returns, maintaining files, processing, taxpayer correspondence, undertaking audits and enforcement activities, and distributing the monthly allocations to the counties and/or cities. Local Government Impact Local units of government, either counties or municipalities, would receive additional funding in the amounts shown in the above table. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, SD, WP, CT