LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
 
February 27, 2015

TO:
Honorable Robert Nichols, Chair, Senate Committee on Transportation
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
SB5 by Nichols (Relating to the allocation of certain motor vehicle sales, use, and rental tax revenue to the state highway fund and to the uses of that revenue.), Committee Report 1st House, Substituted



Estimated Two-year Net Impact to General Revenue Related Funds for SB5, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2017.  The bill would result in a General Revenue Related Funds loss of ($5,676,883,000) in the subsequent biennium ending August 31, 2019.

The bill would have a negative effect on the state's cash flow and may require additional Tax Revenue Anticipation Notes to be issued to meet the state's annual cash flow needs.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2016 $0
2017 $0
2018 ($2,744,415,000)
2019 ($2,932,468,000)
2020 ($3,101,510,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1
Probable Revenue Gain from
State Highway Fund
6
2016 $0 $0
2017 $0 $0
2018 ($2,744,415,000) $2,744,415,000
2019 ($2,932,468,000) $2,932,468,000
2020 ($3,101,510,000) $3,101,510,000

Fiscal Analysis

The bill would amend Chapter 152 of the Tax Code, regarding taxes on motor vehicles, to provide for allocations of revenue from those taxes to the State Highway Fund (SHF).
 
Beginning in fiscal 2018, the bill would direct the Comptroller to deposit the total revenue from the motor vehicle sales and use tax, the motor vehicle rental tax, and the motor vehicle sales and use tax from seller-financed sales in excess of $2,500,000,000, after making the required allocation to the Property Tax Relief Fund (PTRF), to the credit of the SHF.  The deposits would continue until a total of $2,500,000,000 has been deposited to the SHF in that state fiscal year.  Any tax revenue generated in excess of the $2,500,000,000 deposited to the SHF would be evenly divided between SHF and the General Revenue (GR) Fund.  Under current law net revenue collections from these taxes are deposited to GR. 
 
The bill would direct that the funds to be deposited to the SHF be used only to construct, maintain, or acquire rights-of-way for public roadways other than toll roads or to repay the principal and interest on general obligation bonds issued as authorized by Section 49-p, Article III, of the Texas Constitution.
 
The bill would take effect September 1, 2015.

Methodology

Future annual net revenue collections from the taxes in Chapter 152 that would be deposited to GR were based on the amounts forecasted in the 2016-17 Biennial Revenue Estimate, projected forward, and reduced by the amounts to be transferred to the PTRF.  The allocations to the SHF beginning in fiscal 2018 (and the resulting losses to GR) were then calculated by allocating the first $2,500,000,000 from the net amounts forecasted to be received from the affected taxes to GR, the second $2,500,000,000 to the SHF, and the excess being evenly divided between GR and the SHF.
 
The bill would not change the deposit to GR of collections from the $5 tax on the even exchange of vehicles, the $10 tax on the gift of a motor vehicle, and the $25 tax on metal dealer plates, and would not change the deposit to GR Account 5071-Emissions Reduction Plan of collections from the 1.0 or 2.5 percent tax surcharge on certain diesel motor vehicles sold or used in the state.
 
Note:  This legislation would do one or more of the following:  create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source.  The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
UP, AG, SD, KK