The bill would amend the Transportation Code to authorize the Texas Department of
Transportation (TxDOT) to finance one non-tolled highway project under a design-build contract
to be financed, including through the issuance of bonds, wholly or partly using revenue from
transportation reinvestment zones or an economic impact zone, as established by the bill. The bill
would authorize TxDOT to establish an economic impact zone that extends not more than one mile
from the centerline of the chosen project. The bill would require the Comptroller to (1) at the
beginning of each calendar year, estimate the projected annual increase in state sales tax revenue
in the zone during the calendar year over the amount of state sales tax revenue in the zone during
the calendar year in which the zone was established; (2) monthly deposit one-twelfth of that
amount to a separate account outside the treasury for the purposes of financing the project; and
(3) at the end of each calendar year, transfer from the separate account to TxDOT the amount
necessary to pay the costs of the project. The bill would require Comptroller to transfer any
amounts remaining in the separate account to the General Revenue Fund. The bill would stipulate
that revenue in the separate account may only be used for project development and construction,
payment of debt, and project maintenance. The bill would require financing agreements for the
project to contain provisions to allow the early retirement of debt using money from an economic
impact zone or money appropriated by the Legislature. The bill would take effect on August 31,
2017.
The bill would require the Comptroller to deposit state sales tax revenue from taxable spending
within a TxDOT-designated economic impact zone to a separate account outside the State
Treasury rather than the General Revenue Fund. Based on the analysis provided by the
Comptroller's office, it is assumed the implementation of an economic impact zone would result in
a significant revenue loss to the General Revenue Fund and gain to a separate account outside the
Treasury. State sales tax revenue from taxable spending that would occur in the general region of
a project zone would be diverted from General Revenue to a separate account outside the treasury
for the purpose of financing the project.
Because the bill does not specify the location and zone boundaries, and annual project costs and
the economic characteristics of a zone are unknown, a specific estimate of the fiscal implications
cannot be determined at this time; however, the Comptroller's office indicates the bill could result
in a loss of sales tax revenue deposited to the General Revenue Fund ranging from $2.4 million to
$9.7 million in the 2020-21 biennium. This estimated range of losses would increase to $5.7
million to $23.8 million in the following biennium. This revenue would be deposited instead to the
new fund outside of the treasury. Because the bill does not specify a limit on the amount of revenue that may be transferred from the General Revenue Fund to the account or an end date for
the transfers, it is assumed the fiscal implications of the bill would continue indefinitely, and grow
by approximately 12 percent per biennium. The table below displays the Comptroller's range of estimates.
|
Low Estimate |
Low Estimate |
High Estimate |
High Estimate |
| Fiscal Year |
(Loss) to General Revenue Fund |
Gain to New Separate Account |
(Loss) to General Revenue Fund |
Gain to New Separate Account |
| 2018 |
$0 |
$0 |
$0 |
$0 |
| 2019 |
$0 |
$0 |
$0 |
$0 |
| 2020 |
($800,000) |
$800,000 |
($3,100,000) |
$3,100,000 |
| 2021 |
($1,600,000) |
$1,600,000 |
($6,600,000) |
$6,600,000 |
| 2022 |
($2,400,000) |
$2,400,000 |
($10,000,000) |
$10,000,000 |
| 2023 |
($3,300,000) |
$3,300,000 |
($13,800,000) |
$13,800,000 |
| 2024 |
($4,300,000) |
$4,300,000 |
($17,800,000) |
$17,800,000 |
| 2025 |
($5,300,000) |
$5,300,000 |
($21,900,000) |
$21,900,000 |
| 2026 |
($6,200,000) |
$6,200,000 |
($25,290,000) |
$25,290,000 |
| 2027 |
($7,300,000) |
$7,300,000 |
($30,300,000) |
$30,300,000 |
| 2028 |
($8,100,000) |
$8,100,000 |
($34,000,000) |
$34,000,000 |
| 2029 |
($8,900,000) |
$8,900,000 |
($37,000,000) |
$37,000,000 |
| 2030 |
($9,500,000) |
$9,500,000 |
($39,600,000) |
$39,600,000 |
| 2031 |
($10,100,000) |
$10,100,000 |
($42,000,000) |
$42,000,000 |
| 2032 |
($10,700,000) |
$10,700,000 |
($44,500,000) |
$44,500,000 |
| 2033 |
($11,300,000) |
$11,300,000 |
($47,200,000) |
$47,200,000 |
| 2034 |
($12,000,000) |
$12,000,000 |
($50,000,000) |
$50,000,000 |
| 2035 |
($12,700,000) |
$12,700,000 |
($53,000,000) |
$53,000,000 |
| 2036 |
($13,500,000) |
$13,500,000 |
($56,200,000) |
$56,200,000 |
| 2037 |
($14,300,000) |
$14,300,000 |
($59,600,000) |
$59,600,000 |
| 2038 |
($15,200,000) |
$15,200,000 |
($63,200,000) |
$63,200,000 |
| 2039 |
($16,100,000) |
$16,100,000 |
($67,000,000) |
$67,000,000 |
| 2040 |
($17,100,000) |
$17,100,000 |
($71,000,000) |
$71,000,000 |
| 2041 |
($18,000,000) |
$18,000,000 |
($74,600,000) |
$74,600,000 |
| 2042 |
($18,900,000) |
$18,900,000 |
($78,300,000) |
$78,300,000 |
| 2043 |
($19,800,000) |
$19,800,000 |
($82,200,000) |
$82,200,000 |
| 2044 |
($20,800,000) |
$20,800,000 |
($86,300,000) |
$86,300,000 |
| 2045 |
($21,800,000) |
$21,800,000 |
($90,600,000) |
$90,600,000 |
| 2046 |
($22,900,000) |
$22,900,000 |
($95,100,000) |
$95,100,000 |
| 2047 |
($24,000,000) |
$24,000,000 |
($99,900,000) |
$99,900,000 |
| 2048 |
($25,200,000) |
$25,200,000 |
($104,900,000) |
$104,900,000 |
| 2049 |
($26,500,000) |
$26,500,000 |
($110,100,000) |
$110,100,000 |
This analysis assumes the provisions of the bill would not provide TxDOT with the authority to
issue bonds for the purposes of financing the costs of a non-tolled highway project in connection
with an economic impact zone. The Texas Transportation Commission and TxDOT have used all
of the Commission's current bonding authority for non-tolled transportation projects. Therefore,
this analysis assumes TxDOT would finance the costs of a design-build contract for a non-tolled
highway project subject to the provisions of the bill by using tax revenue from the account outside
the Treasury and the agency's existing highway planning and construction funds. It is also
assumed TxDOT would use proceeds from the account to fund ongoing routine maintenance
expenses after the completion of the highway project. Based on LBB's analysis of TxDOT, it is
assumed any additional costs or duties associated with implementing the provisions of the bill
could be absorbed within the agency's existing resources.
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.
No significant fiscal implication to units of local government is anticipated.