LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 20, 2015 TO: Honorable Joseph Pickett, Chair, House Committee on Transportation FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SJR5 by Nichols (Proposing a constitutional amendment dedicating certain revenue derived from the tax imposed on the sale, use, or rental of a motor vehicle to the state highway fund and the available school fund.), As Engrossed Estimated Two-year Net Impact to General Revenue Related Funds for SJR5, As Engrossed: a negative impact of ($118,681) through the biennium ending August 31, 2017. The resolution would result in a General Revenue Related Funds loss of ($5,676,883,000) in the subsequent biennium ending August 31, 2019. The resolution would constitutionally dedicate a portion of motor vehicle sales tax revenue; therefore appropriations from this revenue would not be restricted by the Article VIII, Section 22 spending limit. 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.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 20, 2015
TO: Honorable Joseph Pickett, Chair, House Committee on Transportation FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SJR5 by Nichols (Proposing a constitutional amendment dedicating certain revenue derived from the tax imposed on the sale, use, or rental of a motor vehicle to the state highway fund and the available school fund.), As Engrossed
TO: Honorable Joseph Pickett, Chair, House Committee on Transportation
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SJR5 by Nichols (Proposing a constitutional amendment dedicating certain revenue derived from the tax imposed on the sale, use, or rental of a motor vehicle to the state highway fund and the available school fund.), As Engrossed
Honorable Joseph Pickett, Chair, House Committee on Transportation
Honorable Joseph Pickett, Chair, House Committee on Transportation
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SJR5 by Nichols (Proposing a constitutional amendment dedicating certain revenue derived from the tax imposed on the sale, use, or rental of a motor vehicle to the state highway fund and the available school fund.), As Engrossed
SJR5 by Nichols (Proposing a constitutional amendment dedicating certain revenue derived from the tax imposed on the sale, use, or rental of a motor vehicle to the state highway fund and the available school fund.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for SJR5, As Engrossed: a negative impact of ($118,681) through the biennium ending August 31, 2017. The resolution would result in a General Revenue Related Funds loss of ($5,676,883,000) in the subsequent biennium ending August 31, 2019. The resolution would constitutionally dedicate a portion of motor vehicle sales tax revenue; therefore appropriations from this revenue would not be restricted by the Article VIII, Section 22 spending limit. 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.
Estimated Two-year Net Impact to General Revenue Related Funds for SJR5, As Engrossed: a negative impact of ($118,681) through the biennium ending August 31, 2017. The resolution would result in a General Revenue Related Funds loss of ($5,676,883,000) in the subsequent biennium ending August 31, 2019.
The resolution would constitutionally dedicate a portion of motor vehicle sales tax revenue; therefore appropriations from this revenue would not be restricted by the Article VIII, Section 22 spending limit. 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.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($118,681) 2017 $0 2018 ($2,744,415,000) 2019 ($2,932,468,000) 2020 ($3,101,511,000)
2016 ($118,681)
2017 $0
2018 ($2,744,415,000)
2019 ($2,932,468,000)
2020 ($3,101,511,000)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue Gain fromAvailable School Fund2 Probable Revenue Gain fromState Highway Fund6 2016 ($118,681) $0 $0 $0 2017 $0 $0 $0 $0 2018 $0 ($2,845,338,000) $100,923,000 $2,752,308,000 2019 $0 ($3,108,644,000) $176,176,000 $2,940,440,000 2020 $0 ($3,345,335,000) $243,824,000 $3,109,562,000 Fiscal Year Probable Revenue (Loss) fromTexas Emissions Reduction Plan5071 2016 $0 2017 $0 2018 ($15,786,000) 2019 ($15,944,000) 2020 ($16,103,000)
Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue Gain fromAvailable School Fund2 Probable Revenue Gain fromState Highway Fund6 2016 ($118,681) $0 $0 $0 2017 $0 $0 $0 $0 2018 $0 ($2,845,338,000) $100,923,000 $2,752,308,000 2019 $0 ($3,108,644,000) $176,176,000 $2,940,440,000 2020 $0 ($3,345,335,000) $243,824,000 $3,109,562,000
2016 ($118,681) $0 $0 $0
2017 $0 $0 $0 $0
2018 $0 ($2,845,338,000) $100,923,000 $2,752,308,000
2019 $0 ($3,108,644,000) $176,176,000 $2,940,440,000
2020 $0 ($3,345,335,000) $243,824,000 $3,109,562,000
Fiscal Year Probable Revenue (Loss) fromTexas Emissions Reduction Plan5071 2016 $0 2017 $0 2018 ($15,786,000) 2019 ($15,944,000) 2020 ($16,103,000)
2016 $0
2017 $0
2018 ($15,786,000)
2019 ($15,944,000)
2020 ($16,103,000)
Fiscal Analysis
The resolution would propose an amendment to Article VIII of the Texas Constitution to add new Section 7-c requiring the dedication of certain revenues derived from the motor vehicle sales tax, the motor vehicle rental tax, and the motor vehicle sales and use tax from seller-financed sales to the credit of the State Highway Fund (SHF) and the Available School Fund (ASF). Beginning in fiscal 2018, the amendment 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 allocated as follows: 50 percent to the SHF, 30 percent to the General Revenue (GR) Fund, and 20 percent to the ASF. Under current law net revenue collections from these taxes are deposited to GR. The amendment 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 proposed amendment would be submitted to voters at an election to be held November 8, 2016.
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 divided between GR, the ASF, and the SHF. This analysis interprets the amendment to include all revenues from the taxes received under Chapter 152 that involve the sale, use, or rental of a motor vehicle. This would include revenue collections from the surcharge on certain diesel vehicles currently allocated to GR Account 5071-Emission Reduction Plan, and collections currently deposited to GR 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. Excluded from the amendment's effects would be allocations to the PTRF. The resolution is self-enacting and the described re-allocation of revenue would occur without any associated enabling legislation.The cost to the state for publication of the resolution is $118,681.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, AG, SD, KK
UP, AG, SD, KK