LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 16, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB412 by Shapiro (Relating to the allocation and use by
counties of revenue from motor vehicle sales and use
taxes and vehicle registration fees.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB412, As Introduced: negative impact of $(263,574,000) 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 $(130,160,000) *
* 2003 (133,414,000) *
* 2004 (136,749,000) *
* 2005 (140,168,000) *
* 2006 (143,672,000) *
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All Funds, Five-Year Impact:
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*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 and *
* 0001 0006 Bridge Funds *
* 2002 $(130,160,000) $129,624,000 $536,000 *
* 2003 (133,414,000) 132,864,000 549,000 *
* 2004 (136,749,000) 136,186,000 563,000 *
* 2005 (140,168,000) 139,590,000 577,000 *
* 2006 (143,672,000) 143,080,000 592,000 *
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Fiscal Analysis
The bill would amend the Tax Code and the Transportation Code to revise
the state/county allocation formula used for motor vehicle sales taxes
and registration fees.
Chapter 152 of the Tax Code would be amended to require a county tax
assessor-collector to retain 5 percent of the motor vehicle sales taxes
and penalties collected. In addition, each calendar year, tax
assessor-collectors would retain an amount equal to 5 percent of the tax
and penalties collected in the previous calendar year by the Comptroller
from the sale of seller-financed motor vehicles in the county.
The county would credit motor vehicle sales tax collections to the
county's road and bridge fund. Use of the revenues would be limited to
county road construction, maintenance, and repair; bridge construction,
maintenance, and repair; the purchase of rights-of-way for proposed roads
or highways; or the relocation of utilities for road or highway
purposes.
The bill would eliminate provisions in the Tax Code relating to the
current formula that requires the Comptroller to authorize counties to
retain motor vehicle sales taxes and penalties when registration
collections prove insufficient to meet certain provisions.
The bill would amend the Transportation Code to delete the requirement
for county tax-assessor collectors to withhold, from registration fees
collected, an amount equal to 5 percent of the collections made from
motor vehicle sales taxes and penalties, and 5 percent of the collections
made from motor vehicle sales taxes and penalties in seller-financed
motor vehicle sales.
The bill would take effect September 1, 2001.
Methodology
Counties now collect, but do not retain, motor vehicle sales taxes and
penalties. Counties retain out of registration collections an amount
equal to 5 percent of motor vehicle sales tax and penalties collected.
Motor vehicle sales tax collections are deposited to the credit of the
General Revenue Fund 0001, and registration fees are deposited to the
credit of the State Highway Fund 0006. In cases where a county does not
collect registration fees in sufficient amounts to recover the sales tax
amount allowable, a tax assessor-collector may petition the Comptroller
to release motor vehicle sales taxes to cover the deficit. This bill
would require counties to retain 5 percent of its motor vehicle sales
taxes and penalties, as collected.
Because counties would no longer retain any portion of registration fees
collected in lieu of motor vehicle sales taxes, the net effect would be
to reduce the amounts that counties withheld from Fund 0006, and to
increase, by approximately the same amount, the amount withheld from Fund
0001.
Approximately 61 counties would see increased funding for roads and
bridges, ranging from a high of $35,000 in San Saba County to a low of
$400 in Live Oak County.
Note: Although the bill would not make an appropriation, it would
establish the basis for an appropriation.
Local Government Impact
Local units of government would have a corresponding fiscal impact from
motor vehicle sales tax revenues, as indicated in the table above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, SM