LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 2, 2001
TO: Honorable Clyde Alexander, Chair, House Committee on
Transportation
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB4 by Shapiro (Relating to the administration and use
of the Texas Mobility Fund and the issuance of
obligations for financing the construction,
reconstruction, acquisition, and expansion of state
highways and other mobility projects.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB4, As Engrossed: negative impact of $(160,442,701) 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 $(26,646,736) *
* 2003 (133,795,965) *
* 2004 (131,423,563) *
* 2005 (129,051,161) *
* 2006 (126,678,759) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Savings/(Cost) Savings/(Cost) *
* Gain/(Loss) Gain/(Loss) from New Texas from General *
* from New Texas from New Texas MobilityFund Revenue Fund *
* MobilityFund - MobilityFund 0001 *
* Bond Proceeds -Debt Svc *
* Reserve *
* 2002 $1,353,279,280 $132,609,764 $(270,655,856) $(26,646,736) *
* 2003 0 0 (270,655,856) (133,795,965) *
* 2004 0 0 (270,655,856) (131,423,563) *
* 2005 0 0 (270,655,856) (129,051,161) *
* 2006 0 0 (270,655,856) (126,678,759) *
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Fiscal Analysis
The bill would amend the Transportation Code to authorize the Texas
Transportation Commission (TTC) to issue and enter into credit agreements
related to, obligations in the name and on behalf of the state for
financing the construction, reconstruction, acquisition, and expansion of
state highways and other mobility projects through the Texas Department
of Transportation (TxDOT) and the Texas Mobility Fund. The bill would
pledge the full faith and credit of the state to the payment of
obligations and credit agreements in the event that revenue and money for
and on deposit in the fund would be insufficient to cover debt
obligations. The bill would establish authorizations, requirements, and
limitations for issuing and aggregating obligations, investing, using,
and administering the fund. The bill would not dedicate a specific
amount to the Texas Mobility Fund, but would provide for annual
appropriations determined by the General Appropriations Act to be made to
the fund out of miscellaneous and general revenue. The bill would also
require the Comptroller to hold and certify amounts within the fund.
The bill would take effect on the date on which the constitutional
amendment proposed by the 77th Legislature, Regular Session, creating
the Texas Mobility Fund and authorizing the issuance of obligations for
financing the construction and acquisition of extensions, improvements,
and expansions of the state's highways, roads, and other mobility
projects would take effect. If that amendment does not receive approval
by the voters, this bill would have no effect.
Methodology
It is assumed that an annual transfer would be made from the General
Revenue Fund to the Texas Mobility Fund for the purposes of making
required debt payments for the bonds. It is assumed bonds totaling $1.49
billion would be issued for 20 years at an interest rate of 4.6 percent
with semi-annual payments. Other assumptions include fees of $700,000
for the cost of issuance, underwriting fees of $5 per $1,000 of bonds, a
debt service reserve, and that interest earnings during construction
would be used towards the project cost base on an 83 month draw. It is
estimated that TxDOT would issue bonds in February 2002, and that the
debt service required for the bonds would cost $26.6 million in general
revenue in fiscal year 2002 with the cost increasing to $133.7 million in
fiscal year 2003 and $131.4 million in fiscal year 2004. It is
estimated that annual debt service costs would decrease by approximately
$2.4 million in each subsequent year for the remaining life of the bonds.
It is assumed that the issuance of these obligations would impact the
constitutional debt limit under Article III, Section 49-j of the Texas
Constitution.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, SD, RB, MW