LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 28, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3106 by Alexander (Relating to the rates of state
motor fuel taxes and the allocation of the taxes.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3106, As Introduced: positive impact of $251,187,000 through *
* the biennium ending August 31, 2003. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $127,128,000 *
* 2003 124,059,000 *
* 2004 108,583,000 *
* 2005 100,776,000 *
* 2006 94,096,000 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) Gain/(Loss) Gain/(Loss) Gain/(Loss) *
* from Dedicated from from Available from State *
* General Revenue Non-Dedicated School Fund Highway Fund *
* Fund General Revenue 0002 0006 *
* 0001 Fund *
* 0001 *
* 2002 $6,075,000 $(9,102,000) $130,155,000 $372,672,000 *
* 2003 6,712,000 (13,824,000) 131,171,000 375,628,000 *
* 2004 6,940,000 (33,970,000) 135,613,000 387,956,000 *
* 2005 7,172,000 (46,536,000) 140,140,000 400,725,000 *
* 2006 7,426,000 (58,433,000) 145,103,000 414,844,000 *
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*Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) *
* Year from New Other Teacher Health from New Other County Road *
* Insurance Purposes *
* 2002 $108,511,000 $17,700,000 *
* 2003 183,122,000 17,700,000 *
* 2004 189,346,000 17,700,000 *
* 2005 195,675,000 17,700,000 *
* 2006 202,609,000 17,700,000 *
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Fiscal Analysis
The bill amends Chapter 153 of the Tax Code to raise the tax rate on
motor fuels by $0.05 per gallon. The bill also increases the special use
liquefied gas tax decal rate for transit company vehicles and the weight
and mileage-based taxes imposed on vehicles propelled by liquefied gas.
The current tax rate for gasoline and diesel fuel is $0.20 per gallon.
The bill would raise the tax rate to $0.25. The current tax rate for
liquefied gas is $0.15 per gallon. The bill would raise the rate to
$0.20.
The bill allocates 25 percent of the net revenue derived from the
proposed tax increase for the sole purpose of funding group health
benefits for active employees of school districts.
The bill allocates $17.7 million per year in the gasoline tax revenues
that are currently allocated to the State Highway Fund 006 for the
maintenance of farm-to-market roads to counties to use for specified road
and bridge expenditures.
The bill takes effect September 1, 2001.
The provision which allocates revenue for teacher health benefits would
take effect January 1, 2002, but only if the constitutional amendment
proposed by the 77th Legislature, Regular Session, 2001, which dedicates
any increases in the rate of a motor fuel tax to fund group health
benefits for active employees of school districts, were approved by the
voters. If the constitutional amendment were not approved, the
dedication would not take effect.
Methodology
The current tax rate for gasoline and diesel fuel is $0.20 per gallon.
This bill would raise the tax rate to $0.25. The current tax rate for
liquefied gas is $0.15 per gallon. This bill would raise the rate to
$0.20.
Estimates of the increase in tax revenues were obtained by adjusting the
Comptroller's 2002-2003 Biennial Revenue Estimate to reflect the
increased tax rate. The resulting figures for 2002 and 2003 were
adjusted for collection lags and changes in consumer behavior due to
increased prices. Allowances also were made for the other changes in
allocations specified in the bill.
Once the static fiscal impact was estimated, the dynamic fiscal impact
was calculated using a Texas-specific general equilibrium model to
distribute the amount that otherwise would have been saved or spent on
other items by businesses and consumers among the state's economic
sectors. The revenue feedback calculation was based on the historical
relationship between state tax revenues and associated economic factors.
Note: This estimate assumes voter passage of a constitutional amendment
dedicating the revenue from any increases in the motor fuel tax rate to
fund group health insurance for active employees of local school
districts.
Local Government Impact
An additional $17,700,000 each year would distributed among the counties
of the state for county use in purchasing rights-of-way for state
highways, improving county bridges, purchasing materials from the Texas
Department of Transportation, or for contributing funds to state highway
improvements.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, CT