LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 16, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB241 by Lucio (Relating to the financing and
construction of highways.), Committee Report 1st House,
Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB241, Committee Report 1st House, Substituted: 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 - *
* 0006 0006 Federal *
* 0555 *
* 2002 $813,299,760 $(406,649,880) $(100,012,850) *
* 2003 0 (406,649,880) (100,099,847) *
* 2004 0 0 (100,014,409) *
* 2005 0 0 (100,013,711) *
* 2006 0 0 (100,010,494) *
**************************************************************************
Fiscal Analysis
The bill is contingent on the passage and voter approval of Senate Joint
Resolution (SJR) 7, SJR 10, 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 require that bonds issued may not
have a principal amount, or terms, at the time of issuance with
obligation expenditures in excess of five percent of the federal highway
obligation authority that the state anticipates it will receive during
any year in which payments would be made on the obligations. The bill
would require the TTC to obtain approval from the Bond Review Board prior
to issuing bonds and it would require the Attorney General's approval
that proceedings conform to law before bonds could be issued or bond
enhancement agreements could be entered into. The bill would require the
Comptroller to withdraw and forward funds from the State Highway Fund
under the direction of the TTC for the payment of principal, interest,
and other bond and bond enhancement agreement related costs.
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 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 SJR 7, SJR 10, or similar
legislation, the bill would require debt service costs estimated on the
assumption that there would be one bond issuance of $819 million of
project costs on February 1, 2002 at an interest rate of 3.2 percent;
that the federal highway obligation authority amount received each year
would be approximately $2.0 billion; that each issuance would be for a
ten year period; that the interest rate would increase to 3.8 percent in
FY 2006; that repayments would be financed through 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 issuance
costs of $1.96 per $1,000 of bonds; underwriting fees of $5 per $1,000
of bonds; and that the bonds would be issued over a one year period at
the same project cost amount. It is estimated that payment costs would
be approximately $100 million during each fiscal year.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 352 Texas Bond Review Board
LBB Staff: JK, JO, RT, MW