Master FIR (1988)

NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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F I S C A L I M P A C T R E P O R T

SPONSOR:	Aragon		DATE TYPED:	03-9-99		HB
SHORT TITLE:		Highway Infrastructure Fund				SB	590\aSFL
					ANALYST:		Taylor

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY99	FY2000	Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
$ 0.0	$ 12,100.0	$ 12,100.0	Recurring	Highway Infrastructure
$ 0.0	$ (1,500.0)	$ (1,500.0)	Recurring	Rubberized Asphalt
$ 0.0	$ (1,500.0)	$ (1,500.0)	Recurring	Local Gov. Road*
$ 0.0	$ (2,500.0)	$ (2,500.0)	Recurring	State Road Fund*
$ 0.0	$ (1,900.0)	$ (2,000.0)	Recurring	General Fund*

* Losses to these funds result from the redirecting the leased vehicle excise tax.

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB-457, HB-537.

SOURCES OF INFORMATION

Taxation and Revenue Department

LFC Files

SUMMARY

Synopsis of Senate Floor Amendment

The Senate Floor amendment obligates the State Highway and Transportation Department to require that any sand, gravel, caliche or similar material needed for projects financed by the highway infrastructure fund be mined from state lands, if practicable. Practicability is based on the material being available to the vicinity of the project, the lease or purchase of the material being in the best interest of state land trust beneficiaries, and the cost of materials being competitive with the cost of materials from non-state lands.

The Senate Floor amendment does not change the fiscal implications of the bill.

Synopsis of Bill

Senate Bill would create the highway infrastructure fund and earmark certain revenues to it. The fund would be used to finance highway projects approved during the last legislative session.

Significant Issues

The revenues earmarked to the infrastructure fund include:

•Petroleum Products Loading Fee revenue resulting from a $30 per load (or 0.375 cents per gallon) fee increase. This offsets the $30 per load decrease in the fee in October 1998. A load is equal to 8 thousand gallons. The petroleum products loading fee is charged for the privilege of loading gasoline or special fuel from a rack at a refinery or pipeline terminal.

•Leased Vehicle Excise Tax Revenues. All revenue from this source would be directed to the new fund. Currently 42 percent of the revenue goes to the state road fund; 33 percent goes to the general fund; and the rest to the local governments road fund.

•Tire recycling fees. All fee revenue would be redirected to the new fund. Currently revenue is earmarked to the rubberized asphalt and tire recycling funds.

•One cent of gasoline tax revenue in 2003. This represents the penny that is currently scheduled to be eliminated in 2003.

FISCAL IMPLICATIONS

In FY 2000, the proposed changes would yield $12.1 million in recurring revenue for the Highway infrastructure fund. $4.6 million of this would come from the Petroleum Products Loading Fee and the remainder from the de-earmarking of the leased vehicle gross receipts tax and the rubberized asphalt fund. In FY 2003, the Highway fund would get a boost from the repeal of the one-cent gas tax that is set to sunset in that year. The expected revenues to the highway fund are shown in the following table.

Dollars in Millions

Funding Sources	FY 2000	FY 2001	FY 2002	FY 2003
Petroleum Products Loading Fee	$4.6	$4.6	$4.6	$4.6
De-earmark rubberized asphalt Fund	$1.5	$1.5	$1.5	$1.5
Redirect leased vehicle gross receipts	$6.0	$6.0	$6.0	$6.0
Repeal One Cent Gas Tax Reduction	$0.0	$0.0	$0.0	$9.2
Total Funds Available	$12.1	$12.1	$12.1	$21.3

ADMINISTRATIVE IMPLICATIONS

The Taxation and Revenue Department reports that the administrative impacts are minor and can be accomplished with existing resources.

OTHER SUBSTANTIVE ISSUES

The State Highway Department raised a concern about moving the $2.5 million from the road fund to the highway infrastructure fund, suggesting that it may be unconstitutional. They cite article IX, Section 16, which provides that "the legislature shall not enact any law which will decrease the amount of the annual revenues pledged for the payment of state highway debentures or which will divert any revenues to any other purpose as any said debentures issued to anticipate the collection thereof remain unpaid."

However, the LFC believes this may not be a problem because while the funds are moved, they are still eligible for the bonded projects.

BT/gm