Estimated Two-year Net Impact to General Revenue Related Funds for HB1851, As Introduced: a negative impact of ($9,361,916) through the biennium ending August 31, 2027.
The bill would amend Government Code, Section 2175.308 related to the disposal of former Department of Public Safety (DPS) vehicles through the TFC State Surplus Property Program. The code currently authorizes transfers to municipal or county law enforcement agencies in economically disadvantaged areas. The bill would expand this authorization to include school districts in these areas.
Under current law and rule, TFC retains 12 percent of the sale price of these vehicles sold by the State Surplus Program as a commission. Of the remaining sale price, DPS receives 25 percent for the purchase of future vehicles while the remaining 75 percent is returned to the Treasury as General Revenue. For vehicles transferred under the provisions of Government Code, Section 2175.308, TFC only receives a handling fee and no funds are returned to either DPS or the Treasury.
The amendment to the bill could therefore reduce both Appropriated Receipts and General Revenue to the extent that school districts participate in the expanded program.
According to TFC, in fiscal year 2024 a total of 627 surplus DPS vehicles were disposed of by the State Surplus Program. Of these vehicles, 30 were transferred to law enforcement entities under the provisions of Government Code 2175.308, while the remaining 597 vehicles were sold as surplus.
Law enforcement entities that receive transfers of these vehicles pay TFC a transfer fee of $1,000 per vehicle for the service. TFC allows the transfer of three vehicles per eligible requesting agency every three years, with a maximum of 30 transferred vehicles per year under the program. According to the agency, the remaining vehicles disposed of through the State Surplus Program are sold for between $12,000 and $15,000 per vehicle.
This analysis assumes that, given the number of school districts in economically disadvantaged areas and the opportunity to purchase a vehicle for a small fraction of its market value, all DPS vehicles currently sold by the State Surplus Program would instead be transferred to these districts. The analysis also assumes the same number of DPS vehicles would be available for disposal each year.
It is assumed that the average sale price per vehicle would be $13,500, the midpoint of the range of vehicle sale values according to TFC. TFC would receive an estimated $1,620 in commissions for each vehicle if sold; as a result, the $1,000 transfer fee per vehicle would represent a loss in Appropriated Receipts per vehicle of $620. The total estimated net loss of Appropriated Receipts to TFC would be $340,140 per year.
Because all vehicles are assumed to be transferred, DPS would receive no Appropriated Receipts from the disposed vehicles. The estimated sale price of these vehicles, less TFC commission, would be $11,880, of which DPS would have received an estimated $2,970 per vehicle. The total estimated loss of Appropriated Receipts for DPS would be $1,773,090 per year. The remaining sales proceeds, totaling $4,680,958 per year, would represent a loss of General Revenue.
According to the Texas Education Agency, no fiscal impact is anticipated.
According to DPS, no significant fiscal impact is anticipated.
The loss of Appropriated Receipts and General Revenue estimated above would represent a positive impact to local school districts.