BILL ANALYSIS AND FISCAL IMPACT REPORT	Page 1 of  1

DATE: March 8, 2001	Submitted by: TAXATION AND REVENUE DEPT.       
	T. GLENN ELLINGTON, SECRETARY

BILL NUMBER:  HTC Substitute for HB-367, HB-479 and HB-651

SPONSOR:  House Transportation Committee

CONFLICTS, DUPLICATES, COMPANIONS: HB-666, SB-207 (MV Excise Tax)

DESCRIPTION:  This bill increases both the Gasoline Tax rate and Special Fuel Excise Tax rate by 1 cent per gallon each year in January for 4 years (2003 through 2006). Distribution shares for recipients of these fuel taxes are adjusted to be revenue neutral, with the increased revenue being directed to the State Road Fund along with an increasing share of the Motor Vehicle Excise Tax.  In calendar year 2003, 12.5% of Motor Vehicle Excise Tax would be diverted from the State General Fund to the State Road Fund, 25% in calendar year 2004, 37.5% in calendar year 2005, and 50% of the tax to the Road Fund in calendar year 2006 and subsequent years.

The bonding authority for highway department road projects would be increased and a list of 20 road projects is proposed.  The current law 1 cent per gallon decrease in the Gasoline Tax scheduled for July 1, 2003 would be repealed.

EFFECTIVE DATE:  Not specified – assume 90 days following adjournment (approx. June 15, 2001).

FISCAL IMPACT (Thousands of dollars)   Parenthesis ( ) indicate a revenue loss:

Estimated Impact on Revenues	Recurring or		
			Nonrecurring	Funds	
(FY 2002-2003)	(FY 2003-2004)	(FY 2004-2005)	     Impact     	         Affected         	
(9,147)	(25,399)	(43,477)	Recurring	State General Fund	
14,743   	42,868	73,276	Recurring	State Road Fund	
*	*	*	Recurring	other gasoline tax recipients	
(*)	*	(*)	Recurring	Local Govt Road Fund	

Estimated Impact on Revenues    	Recurring or		
			Nonrecurring	Funds	
	(FY 2005-2006)	(FY 2006-2007)	     Impact     	         Affected         	
	(63,493)	(73,596)	Recurring	State General Fund	
	105,623  	122,918  	Recurring	State Road Fund	
	*	*	Recurring	other gasoline tax recipients	
	0	0	Recurring	Local Govt Road Fund	

*  Distribution shares to gasoline tax recipients are rounded up in the bill to assure no loss of revenue; those recipients would realize small inconsequential increases in revenue, but there would be no noticeable fiscal impact on local governments, the State Aviation Fund, the Motorboat Fuel Fund, the Municipal Arterial Program, or the Local Governments Road Fund.  Rounding of the distribution share to the Local Governments Road Fund results in small inconsequential revenue changes in the first 3 years, but is revenue neutral after the 3rd year. 

ADMINISTRATIVE IMPACT:  A moderate negative administrative impact on both taxpayers and the Fuels Tax Unit of the Revenue Processing Division would result from the two fuel tax rate changes every year for 4 years. The Department would have to administer, and taxpayers would have to report and pay, 8 separate fuel inventory taxes over a 4 year period.

Tax form changes, taxpayer notification, and revenue distribution changes for each of these tax rate changes would require a significant amount of time which would come at the expense of other projects and/or taxpayer service levels.  The changes proposed by the bill can be accomplished with existing personnel and budget resources, however, service levels could be expect to be somewhat degraded at certain periods due to the extra administrative burden.