Honorable Steve Ogden, Chair, Senate Committee on Finance
John S. O'Brien, Director, Legislative Budget Board
SB696 by Ellis (Relating to the lease of certain state parking facilities to other persons.), As Introduced
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The bill would implement recommendations in the report, "Optimize the Use of State Parking Facilities," in the LBB Government Effectiveness and Efficiency Report submitted to the Eighty-First Texas Legislature, 2009.
The bill would expand the Texas Facilities Commissionís (TFC) authority related to the operations of state-owned parking lots and garages. The bill would authorize the Commission to lease individual excess parking spaces to individuals. The bill would also authorize the Commission to lease an entire parking facility, or a significant part of a facility, to an institution of higher education, private business, or local government. The bill allows the Commission to hire a private vendor to manage the leasing operations. The bill directs revenue received from the leasing operations to be deposited to General Revenue but limits its appropriation to the
The LBB estimates that implementing the provisions of the bill would result in revenue of $772,000 per year. This estimate is based on leasing 40 percent of the currently available excess parking spaces in the Capitol Complex to individuals at $50 per month. Because the exact implementation (number of parking spaces to be leased and the contract lease rate to be applied) is currently unknown, the Comptroller of Public Accounts cannot provide a certifiable revenue estimate at this time. Changes in the implementation of the program from the assumptions made above will alter projected revenue.
The implementation of a program to lease specific parking spaces to individuals would require the Texas Facilities Commission (TFC) to hire an additional employee due to the quantity of leases involved. The additional employee would cost $63,000 of General Revenue Funds in fiscal year 2010 and $58,000 of General Revenue Funds in fiscal year 2011, for a biennial cost of $121,000. The TFC could manage the lease of entire parking facilities, or segments of parking facilities, with existing resources due to the limited number of opportunities.
The Texas Public Finance Authority (TPFA) believes leasing state parking facilities to private businesses, or the operation of a leasing program by a private vendor, could jeopardize the standing of the stateís tax-exempt bonds related to the construction and maintenance of these facilities, if the use is not within specified limits. The calculation and analysis of such limits would require TPFA to obtain outside legal counsel. TPFA cannot calculate the potential cost to the state of losing tax-exempt status on any outstanding bond issuances, however, such a cost is considered significant.
303 Facilities Commission, 304 Comptroller of Public Accounts, 347 Public Finance Authority
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