LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 14, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB1109 by VanDeaver (Relating to an exemption from certain motor fuel taxes for counties in this state.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB1109, As Introduced: a negative impact of ($2,293,000) through the biennium ending August 31, 2027, if the effective date of the bill is July 1, 2025; or a negative impact of ($2,104,000) through the biennium ending August 31, 2027, if the effective date of the bill is September 1, 2025. All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromAvailable School Fund2 Probable Revenue (Loss) fromState Highway Fund62026($89,000)($1,046,000)($3,139,000)2027($91,000)($1,067,000)($3,202,000)2028($93,000)($1,089,000)($3,266,000)2029($95,000)($1,110,000)($3,331,000)2030($97,000)($1,132,000)($3,397,000)The above table assumes an effective date of July 1, 2025. The table below assumes an effective date of September 1, 2025. All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromAvailable School Fund2 Probable Revenue (Loss) fromState Highway Fund62026($74,000)($872,000)($2,616,000)2027($91,000)($1,067,000)($3,202,000)2028($93,000)($1,089,000)($3,266,000)2029($95,000)($1,110,000)($3,331,000)2030($97,000)($1,132,000)($3,397,000) Fiscal AnalysisThe bill would amend Chapter 162 of the Tax Code (Motor Fuels). Gasoline sales to counties for a county's exclusive use would be exempted from taxation. Conforming changes are made for diesel fuel.The bill would allow counties to request a refund or take a credit on gasoline tax for fuel that had been purchased and used for its exclusive use. Conforming changes are made for diesel fuel.The bill would take effect July 1, 2025, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2025.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 14, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB1109 by VanDeaver (Relating to an exemption from certain motor fuel taxes for counties in this state.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB1109 by VanDeaver (Relating to an exemption from certain motor fuel taxes for counties in this state.), As Introduced
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB1109 by VanDeaver (Relating to an exemption from certain motor fuel taxes for counties in this state.), As Introduced
HB1109 by VanDeaver (Relating to an exemption from certain motor fuel taxes for counties in this state.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1109, As Introduced: a negative impact of ($2,293,000) through the biennium ending August 31, 2027, if the effective date of the bill is July 1, 2025; or a negative impact of ($2,104,000) through the biennium ending August 31, 2027, if the effective date of the bill is September 1, 2025.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1109, As Introduced: a negative impact of ($2,293,000) through the biennium ending August 31, 2027, if the effective date of the bill is July 1, 2025; or a negative impact of ($2,104,000) through the biennium ending August 31, 2027, if the effective date of the bill is September 1, 2025.
All Funds, Five-Year Impact:
2026 ($89,000) ($1,046,000) ($3,139,000)
2027 ($91,000) ($1,067,000) ($3,202,000)
2028 ($93,000) ($1,089,000) ($3,266,000)
2029 ($95,000) ($1,110,000) ($3,331,000)
2030 ($97,000) ($1,132,000) ($3,397,000)
The above table assumes an effective date of July 1, 2025. The table below assumes an effective date of September 1, 2025.
All Funds, Five-Year Impact:
2026 ($74,000) ($872,000) ($2,616,000)
2027 ($91,000) ($1,067,000) ($3,202,000)
2028 ($93,000) ($1,089,000) ($3,266,000)
2029 ($95,000) ($1,110,000) ($3,331,000)
2030 ($97,000) ($1,132,000) ($3,397,000)
Fiscal Analysis
The bill would amend Chapter 162 of the Tax Code (Motor Fuels). Gasoline sales to counties for a county's exclusive use would be exempted from taxation. Conforming changes are made for diesel fuel.The bill would allow counties to request a refund or take a credit on gasoline tax for fuel that had been purchased and used for its exclusive use. Conforming changes are made for diesel fuel.The bill would take effect July 1, 2025, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2025.
Methodology
To estimate the exemption value, data on the number of county-owned and operated vehicles was obtained from the Texas Department of Motor Vehicles. The current number of registered vehicles owned and operated by Texas counties is 23,966. Of this number, 23,816 vehicles have internal combustion engines that use gasoline or diesel fuel. Around 65 percent of these 23,816 vehicles are comprised of sport utility vehicles, trucks (light, medium, and heavy), and buses. Information from the Comptroller's State of the Fleet Report 2025 indicates a very similar percent of internal combustion vehicles in this vehicle type.The average vehicle in the state fleet consumes approximately 880 gallons of fuel per year. Given that the over 60 percent of the internal combustion vehicles in both the state and county fleets are composed of sport utility vehicles, trucks (light, medium, and heavy), and buses, it is assumed that the average annual motor fuel consumption per vehicle of the county fleet is the same as that of the state fleet. Therefore, it is estimated the current total county vehicle consumption is approximately 20.95 million gallons of motor fuel and, at 20 cents tax per gallon, yields $4.2 million in state motor fuel taxes, which amount would be expected to increase gradually in subsequent years.
Local Government Impact
Under current law, several public entities receive an exemption from the payment of gasoline and diesel fuel taxes. This bill would add counties to the list of entities that are exempted from the payment of such taxes and are entitled to file refund claims on the taxes paid for motor fuel that is exclusively used in their operations, resulting in reduced costs for counties.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD
JMc, KK, SD