| TO: | Honorable Mike Krusee, Chair, House Committee on Transportation |
| FROM: | John Keel, Director, Legislative Budget Board |
| IN RE: | SB1083 by Ogden (Relating to the issuance of bonds and other public securities secured by the state highway fund and the financing and construction of highway improvement projects.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2004 | $0 |
| 2005 | $0 |
| 2006 | $0 |
| 2007 | $0 |
| 2008 | $0 |
| Fiscal Year | Probable Revenue Gain/(Loss) fromSTATE HIGHWAY FUND 6 |
Probable Savings/(Cost) fromSTATE HIGHWAY FUND 6 |
|---|---|---|
| 2004 | $1,005,166,000 | ($1,093,755,366) |
| 2005 | $1,005,166,000 | ($1,192,856,706) |
| 2006 | $1,005,166,000 | ($1,291,955,450) |
| 2007 | $1,005,166,000 | ($1,391,051,250) |
| 2008 | $1,005,166,000 | ($1,490,153,389) |
The bill is contingent on the passage and voter approval of Senate Joint Resolution (SJR) 44, or similar legislation which proposes a constitutional amendment authorizing the Texas Transportation Commission (TTC) to issue bonds and other public securities and enter into bond enhancement agreements payable from revenues deposited to the credit of the State Highway Fund. The bill would limit the total amount of bonds and other public securities to $5 billion (the aggregate principal amount could be no more than $1 billion per year); provide guidance, restrictions, and limitations for the expenditure of the proceeds; require that bonds, other public securities, and bond enhancement agreements may not have a principal amount, or terms, at the time of issuance that would cause annual obligation expenditures in excess of 10 percent of the amount deposited to the credit of the State Highway Fund in the year prior to the issuance; and that obligations may not mature later than 20 years after the date of issuance, subject to any refunding or renewals.
The bill would require the Comptroller to withdraw and forward from the State Highway Fund to the TTC, or another person at the direction of the TTC, funds 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 78th 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.
Contingent on the passage and voter approval of SJR 44, or similar legislation, the bill would require debt service costs estimated on the assumption there would be a bond issuance of $1 billion of project costs each year for the next five years beginning on September 1, 2003, at an interest rate of 1.11 percent; that the total revenues available in the State Highway Fund during each year would exceed $5.9 billion; that debt service for the issuance would be for a 20 year period; that the interest rate would increase to 2.6 percent in FY 2005; that repayments would be financed through the State Highway Fund; and that the amount of the bond issue would be reduced by the estimated interest earned on the balance of bond proceeds each year. It is assumed issuance and underwriting costs would be added to the bond issuance.
| Source Agencies: | 352 Bond Review Board, 601 Department of Transportation
|
| LBB Staff: | JK, JO, RR, RT, KG
|