COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2225S.01I Bill No.:SB 586 Subject:Appropriations; Boards, Commissions, Committees, and Councils; Bonds -
General Obligation and Revenue; Federal - State Relations; Roads and Highways;
Transportation; Department of Transportation
Type:Original Date:March 26, 2025Bill Summary:This proposal modifies which revenue sources shall be deposited into the
State Road Fund.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028State Road Fund
(0320)
Less than
($1,400,000,000)
Less than
($1,400,000,000)
Less than
($1,400,000,000)
Federal Road Fund$0 or Less than
$1,400,000,000
$0 or Less than
$1,400,000,000
$0 or Less than
$1,400,000,000
Total Estimated Net
Effect on Other State
Funds
Less than
($1,400,000,000)
Less than
($1,400,000,000)
Less than
($1,400,000,000)
Numbers within parentheses: () indicate costs or losses. L.R. No. 2225S.01I
Bill No. SB 586
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 2225S.01I
Bill No. SB 586
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FISCAL ANALYSIS
ASSUMPTION
§§226.150, 226.200 & 226.220 – State Road Fund Provisions
Officials from the Missouri Department of Transportation (MoDOT) assume the following
regarding this proposal:
These sections create a “Federal Road Fund” to receive all moneys and credits from the U.S.
Government that are designated to be spent by the State on its Highway System. This fund is to
be expended upon appropriation by the General Assembly.
Federal funds for highway projects are received by MoDOT on a reimbursement basis. Per
federal law (Title 23), all payments must be made in full by MoDOT before the department can
seek federal reimbursement. The reimbursement typically covers 80% of the cost of the
completed expenditure. Currently, money is expended from the State Road Fund (SRF) and then
80% is returned to the SRF once a federal reimbursement request is fulfilled. This ensures that
the fund is balanced, and money is always available to make required payments. In FY 2024,
Missouri Received $1.4 billion in federal transportation funds for highways.
This bill would block reimbursement from returning to the SRF, instead being diverted into the
Federal Road Fund, only to be expended upon General Assembly appropriation. This would have
a significant negative impact on MoDOT’s ability to operate and deliver the Statewide
Transportation Improvement Program (STIP).
Projects programed in the STIP could be delayed or must be abandoned under this funding
process. Subjecting these funds to the appropriations process adds uncertainty and would hinder
MoDOT’s ability to estimate future revenue and plan for construction in future years.
Additionally, many expenditures for projects in the STIP span multiple fiscal years. Annual
appropriations would cloud the availability of future funding of these projects. This also adds a
new layer of risk that would have downstream effects on the price contractors would be willing
to agree to in order to work on the highway system. Timing is another critical element to ensure
the SRF remains solvent. Relying on appropriations could jeopardize the ability for timely
payments to be made to contractors and potentially MoDOT payroll.
These provisions would also affect the federal funding received by Local Public Agencies
(LPA’s) for their work on roads. Federal funding and grants designated to cities and counties
passes through MoDOT. This provision would require federal monies designated for LPAs to be
diverted into the new Federal Road Fund. This could cause delays and require additional
appropriations for these LPAs to use this money. L.R. No. 2225S.01I
Bill No. SB 586
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It is likely that this proposal will negatively affect MoDOT’s ability to bond. The money that is
currently set to be deposited into the State Road Fund is already associated with existing bonds
and their agreements. Diverting federal funds from the State Road Fund would effectively nullify
the revenue pledges made by the MHTC in its ongoing bonding programs. This could then
negatively impact MHTC’s credit and bond ratings. This would lead to higher rates on future
bonding attempts, yielding less proceeds that can be used on road and bridge construction
projects.
Officials from the Office of Administration - Budget and Planning (B&P) assume this
legislation will create a new fund inside of the State Treasury, described as the "Federal Road
Fund." There is no impact to total state revenues or 18/e as all deposits into this fund will consist
of existing revenues being redirected to this new fund.
Officials from the Department of Revenue (DOR) assume this legislation changes the fund in
which federal transportation funds get deposited into and has no fiscal impact on the Department.
Officials from the Office of the State Treasurer assume the proposal will have no fiscal impact
on their organization. Oversight does not have any information to the contrary. Therefore,
Oversight will reflect a zero impact in the fiscal note for these agencies.
FISCAL IMPACT – State
Government
FY 2026
(10 Mo.)
FY 2027FY 2028STATE ROAD FUND (0320)Savings – projects no longer funded
by the State Road FundUnknownUnknownUnknown
Loss – MoDOT – federal funding
being diverted to the new Federal
Road Fund (§226.221)($1,400,000,000)
($1,400,000,000)($1,400,000,000)
ESTIMATED NET EFFECT ON
THE STATE ROAD FUND
(0320)
Less than
($1,400,000,000)
Less than
($1,400,000,000)
Less than
($1,400,000,000) L.R. No. 2225S.01I
Bill No. SB 586
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FISCAL IMPACT – State
Government
FY 2026
(10 Mo.)
FY 2027FY 2028FEDERAL ROAD FUNDRevenue – federal funding being
diverted from the State Road Fund
(§226.221) $1,400,000,000$1,400,000,000$1,400,000,000
Cost – road and bridge projects
appropriated by the General
Assembly
$0 or Up to
($1,400,000,000)
$0 or Up to
($1,400,000,000)
$0 or Up to
($1,400,000,000)
ESTIMATED NET EFFECT ON
THE FEDERAL ROAD FUND
$0 or Less than
$1,400,000,000
$0 or Less than
$1,400,000,000
$0 or Less than
$1,400,000,000
FISCAL IMPACT – Local
Government
FY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This act provides that federal funds designated for highway purposes shall be deposited in the
"Federal Road Fund", created in the act, rather than the State Road Fund.
The act also modifies several transportation funds to provide that revenues intended for highway
purposes of the state and not allocated to the State Road Fund under the Missouri Constitution
shall be allocated to the Federal Road Fund.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space. L.R. No. 2225S.01I
Bill No. SB 586
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SOURCES OF INFORMATION
Missouri Department of Transportation
Department of Revenue
Office of the State Treasurer
Office of Administration - Budget and Planning
Julie MorffJessica HarrisDirectorAssistant DirectorMarch 26, 2025March 26, 2025