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:	05-7-99		HB
SHORT TITLE:		Highway Infrastructure Fund				SB	40/aSFC
					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	$ 5,900.0	$ 6,000.0	Recurring	Highway Infrastructure
$ 0.0	$ (1,900.0)	$ (2,000.0)	Recurring	General Fund
$ 0.0	$ (2,500.0)	$ (2,500.0)	Recurring	State Road
	$ (1,500.0)	$ (1,500.0)	Recurring	Rubberized Asphalt and Tire Recycling

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

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

State Highway and Transportation Department

LFC Files

SUMMARY

Synopsis of SFC Amendments

The SFC amendments make the following changes to the bill:

•the proposed changes and redirection of the petroleum product fee are struck.
•the proposed redirection of leased vehicle gross receipts from the local government road funds is struck. (Leased Vehicle Gross Receipts revenues that currently go the general fund and road fund are still redirected to the infrastructure fund.)
•An emergency clause is added to the bill, making the effective date July 1, 1999. As a result all fiscal impacts are assumed to be full year impacts.

The fiscal impacts of the amended bill are shown in the table at the top of the page.

Synopsis of Bill

Senate Bill 40 would create the highway infrastructure fund and earmark certain revenues to it. The fund would be used to finance highway projects approved during the 1998 legislative session. The State Highway and Transportation Department is obligated to include a requirement in state highway project contracts authorized in the bill 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.

Significant Issues

The revenues earmarked to the infrastructure fund include:

•Petroleum Products Loading Fee revenue that would result from a fee of $70 per load. The provisions in current law that allow the petroleum products loading fee to increase or decrease with the level of unobligated balances in the corrective action fund are struck, and the fee is fixed at $150 per load. The local government road fund continues to receive $40 per load and the corrective action fund the balance of receipts.

•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.

The effective date for the provisions of the bill related to the petroleum product fee is February 1, 2000. The effective date for all other provisions is January 1, 2000.

FISCAL IMPLICATIONS

In FY 2000, the proposed changes would yield $7.2 million in recurring revenue for the Highway infrastructure fund. $3.4 million of this would come from the Petroleum Products Loading Fee; $3 million would come from the de-earmarking of the leased vehicle gross receipts tax. $1.5 million would come redirecting tire recycling fees from the rubberized asphalt and tire recycling funds to the highway infrastructure fund. The FY 2000 impact is roughly half of the full year impact because of the January and February effective dates.

The effect of redistributing revenues from other funds to the highway infrastructure fund are shown in table at the top of the first page. It should be noted that the petroleum product fee revenue results partly from redistributing some of fee revenues from the corrective action fund and part from increasing the fund from its current level of $120 per load to $150 per load. The fee was $150 per load until recently when it was lowered because unobligated balances in the corrective action fund were higher than the $6 million threshold that pushed the fee down to $120 per load.

ADMINISTRATIVE IMPLICATIONS

During the regular session, the Taxation and Revenue Department reported that the administrative impacts are minor and can be accomplished with existing resources.

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