Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL NOTE

TABOR Refund Impact

(Replaces Fiscal Note dated March 23, 1997)

State Cash Fund Revenue and Expenditure Impact

Local Revenue and Expenditure Impact


Drafting Number:

Prime Sponsor(s):

LLS 98-088

Rep. May

Sen. Mutzebaugh

Date:

Bill Status:

Fiscal Analyst:

April 29, 1998

Senate 3rd Reading

Scott Nachtrieb (866-4752)


 

TITLE: CONCERNING TRANSPORTATION. 


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

Highway Users Tax Fund (HUTF)

Transportation Infrastructure Revolving Fund


Capital Construction Fund (GF Transfer)


$25,000

Federal, State, and Private Grants

$100,000,000


$25,000

Federal, State, and Private Grants

State Expenditures

General Fund (Transfer to Capital Const. Fund)

Distributive Data Processing Fund

Transportation Infrastructure Revolving Fund



Risk Management Fund


$100,000,000

$63,500

Continuous appropriations authority

Potential Increased Liability







Potential Increased Liability

FTE Position Change

None

None

Local Government ImpactSee Local Government Impacts



Summary of Legislation


             The revised bill would transfer $100 million in General Funds to the Capital Construction Fund in FY 1998-99 and extend the current diversion of 10 percent of the sales and use tax to the Highway Users Tax Fund (HUTF) an additional six years. Under current law, the State Highway Fund receives 10 percent of the sales and use taxes attributable to automobiles and related items until FY 2007-08.


            The revised bill would allow the Department of Revenue (DOR) to enter into motor fuel tax cooperative agreements with other states by allowing them to contract with other jurisdictions, including foreign countries for tax collection. Several changes would be made to the statutes concerning Ports of Entry weigh stations to allow for an automated port clearance procedure and reduce the time it takes for vehicles to clear the ports. The DOR would be required to establish standard primary body colors and record the information for motor vehicle registration purposes. Vehicles hauling aggregate materials would be required to have rear mud flaps.


            The Department of Transportation (DOT) would be allowed to solicit bids using electronic on-line access, including the Internet, to obtain construction contracts for public projects. The correct federal official would be designated in statute to approve the use of federal funds by the DOT to acquire land adjacent to federal-aid highways. The disposition of tolls enacted by H.B. 96-1144 would be modified to require that any fees, fares, and tolls charged must be sufficient to pay for the reasonable return on investment or to reimburse the DOT for costs relating to the turnpike project. The date by which cities and counties must file a report indicating expenditures for all road and street systems would change from May 1 to June 30.


            The bill would create the Transportation Infrastructure Revolving Fund within the DOT and provide a continuous appropriation authority to the DOT from the fund. The fund could receive appropriations from the General Assembly and grants from federal, state, or private sources which would contain four subaccounts for highways, transit, aviation, and rail. The DOT would determine the amounts allotted to each account. Expenditures from the accounts would be subject to the provisions of Article X, Section 18 of the Colorado Constitution which limits expenditures of motor fuel and motor vehicle related fees and taxes to public highway purposes and aviation fuel taxes to aviation purposes.


            Dispersement from the fund would be used to assist public and private entities for the acquisition, improvement, or construction of highways or multi modal and intermodal transportation facilities. The fund would also pay the administrative costs of the DOT and the State Treasurer. The bill allows the DOT to charge interest on loans, recover the costs of processing and reviewing applications, and file civil actions for failure to repay loans. Cities and counties that failed to repay loans would have their HUTF distributions withheld for the amount of the outstanding balance.


            Local governments could not adopt an ordinance that would prohibit more than one motorcycle from parking in a space. The bill would clarify that any city and other political subdivision of the state would have to obtain a certificate of self insurance from the Division of Insurance. Vehicles under the control of any public entity would be included in the partial waiver of governmental immunity. The DOR would be authorized to charge a fee for probationary driver’s licenses. The fee would be set by rule and regulation. The bill would become effective upon the Governor’s signature.


State Revenues


            The bill would give the DOR the ability to charge a fee for issuing a probationary driver’s licenses. Approximately 5,000 probationary licenses were issued in FY 1996-97. The estimated fee the DOR would assess is $5.00 which would generate an estimated $25,000 in HUTF revenue. The amount of any federal, state, or private grants or other State appropriations that may be made to the revolving fund has not been estimated.


Highway Users Tax Fund. Under current law, ten percent of the sales and use taxes attributable to the sale of motor vehicles and related products is diverted to the State Highway Fund in the Highway Users Tax Fund (HUTF) until FY 2001-02. The bill would extend the diversion another six years. Table I below provides an estimate of the additional amount of the diversion of sales and use taxes for each year. This bill would divert approximately $1.4 billion in additional sales and use taxes in the next ten fiscal years to the HUTF.


            Capital Construction Fund. The bill would also transfer $100 million in General Funds to the Capital Construction Fund in FY 1998-99 (see Table I).

 

Table I

Revenues Made Available For Transportation Purposes by HB 98-1001 - Revised

($ in millions)

 

FY 98-99

FY 99-00

FY 00-01

FY 01-02

FY 02-03

FY 03-04

FY 04-05

FY 05-06

FY 06-07

FY 07-08

TOTAL

Sales/Use Tax *

$0.0

$0.0

$0.0

$0.0

$200.9

$211.0

$221.6

$232.7

$244.4

$256.7

$1,367.3

$100 Transfer

100

0

0

0

0

 

 

 

 

 

100

TOTAL

$100.0

$0.0

$0.0

$0.0

$200.9

$211.0

$221.6

$232.7

$244.4

$256.7

$1,467.3

* Twenty percent of the state increase may be used for major investment study corridors.


TABOR Refund Impact


            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.


State Expenditures


            The amended bill would require the DOR to include the primary vehicle color as a part of the motor vehicle registration information recorded at the time of registering a motor vehicle. This additional information would require 1,270 hours of computer programming at a cost of $63,500 in Distributive Data Processing Funds (DDP).


            The amount of any revenues that may be deposited into the revolving fund has not been estimated. However, the bill provides the DOT with continuous spending authority for dispersing the funds to public and private entities. The administrative costs of administering the fund would be recovered from the moneys in the fund. The administrative costs to the DOT and the State Treasurer are estimated to be minimal. The DOT would also experience costs associated with processing and reviewing applications for revolving fund loans. These costs would vary depending upon the proposals submitted. It would appear that the DOT could accomplish these additional duties within their current personal service appropriations. No additional FTE would be required.


            The bill would divert $100.0 million in General Funds in FY 1998-99 identified in Table I. In FY 2002-03, $200.9 million in additional sales and use tax revenues would be diverted to the HUTF. The bill would increase the amount of money available for state highway projects by an estimated $1,367.4 million in the next ten fiscal years.


            The revised bill would include vehicles under the control of the state into the partial waiver of governmental immunity. Including vehicles under the control of a public entity in the partial waiver of governmental immunity may increase the potential liability of the state. The amount of increased liability would depend upon the Judicial Branch’s interpretation of what “vehicles under the control” of an entity means. If this were interpreted to include employee owned vehicles used on state business, the increase in exposure to liability claims may be significant. No estimates of the increased potential liability have been made at this time.


Spending Authority


            The bill transfers $100 million from the General Fund to the Capital Construction Fund in FY 1998-99. The Department of Revenue would also require a $63,500 increase in Distributive Data Processing Funds spending authority for FY 1998-99 to implement this bill.


Departments Contacted


Revenue          Transportation            Treasurer