October 17, 2012 James M. Bass Chief Financial Officer Texas Department Of Transportation

T x D O T F I N A N C E 1 0 1

2012 Transportation Short Course

Work with others to provide safe and reliable transportation solutions for Texas.

4

State Highway Fund

5

State Highway Fund

– State Motor Fuels Tax • 75% State Highway Fund and 25% to Education

– Split is listed in Constitution (Art 8, Sec 7-a) • $0.20 per gallon for gasoline and diesel • $0.15 per gallon for LPG

– Federal Motor Fuels Tax • $0.184 per gallon for gasoline • $0.244 per gallon for diesel • $0.136 per gallon for special fuels • Collected in Texas and sent to DC for redistribution

6

State Fuel Tax Deposits to SHF

$900,000,000

$1,200,000,000

$1,500,000,000

$1,800,000,000

$2,100,000,000

$2,400,000,000

FY 1993

FY 1994

FY 1995

FY 1996

FY 1997

FY 1998

FY 1999

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Available Funding

7

State Fuel Tax Deposits to SHFPurchasing Power

$900,000,000

$1,200,000,000

$1,500,000,000

$1,800,000,000

$2,100,000,000

$2,400,000,000

FY 19

93

FY 19

94

FY 19

95

FY 19

96

FY 19

97

FY 19

98

FY 19

99

FY 20

00

FY 20

01

FY 20

02

FY 20

03

FY 20

04

FY 20

05

FY 20

06

FY 20

07

FY 20

08

FY 20

09

FY 20

10

FY 20

11

FY 20

12

Available Funding

Federal Aid Highway Process Multi-year

authorization (SAFETEA-LU)

Annual distribution (apportionment or

allocation)

Total possible Federal aid

available for a FY

Obligation (Federal government’s

promise to pay)

Reimbursement

MAP-21 recently enacted by Congress goes through Federal FY 2014.

Provides the upper limits for annual funding of the Program. Apportionment is a distribution by formula.

Includes unobligated balances of prior years’ apportionment

Federal appropriations process will determine how much of the possible federal aid available can be obligated in a FY. Once funds are obligated the federal government has promised to reimburse the States as they incur expenditures, generally at 80% of total eligible cost.

As projects may take many years to complete, the actual reimbursement of funds obligated in Year 1 will occur over many years.

$49.1

$38.1

33

38

43

48

53

58

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

($ b

illio

ns)

Total Outlays Total Receipts

Note: Excludes $8.017 billion transfer from General Fund to Highway Account of HTF in September 2008; $7 billion transfer from General Fund to Highway Account of HTF in August 2009; $19.5 billion transfer from General Fund to Highway and Mass Transit Accounts of HTF in March 2010; $2.4 billion transfer from Leaking

Underground Storage Tank Trust Fund to HTF in June 2012; $6.2 billion transfer from General Fund to Highway Account of HTF in October 2012; $10.4 billion transfer from General Fund to Highway Account of HTF in October 2013; $2.2 billion transfer from General Fund to Mass Transit Account of HTF in October 2013

Highway Trust Fund: Receipts and Outlays Discrepancy

10

State Highway Fund

– Vehicle Registration Fees • Now one fee of $50.80 as of Sept 1, 2011

» Prior had three tiers $58.80, $50.80, and $40.80 – Fees listed on TxDMV website at: ftp://ftp.dot.state.tx.us/pub/txdot-info/vtr/fees/fee_chart_2009_1c.pdf

• Counties may charge additional amounts – Listed on the website above

• Some collections are retained by the Counties and remainder is sent to State Highway Fund

– Distribution is covered in Transportation Code Ch. 502

11

Vehicle Registration Fees to SHF

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

FY 1993

FY 1994

FY 1995

FY 1996

FY 1997

FY 1998

FY 1999

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Available Funding

12

Vehicle Registration Fees to SHFPurchasing Power

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

FY 19

93

FY 19

94

FY 19

95

FY 19

96

FY 19

97

FY 19

98

FY 19

99

FY 20

00

FY 20

01

FY 20

02

FY 20

03

FY 20

04

FY 20

05

FY 20

06

FY 20

07

FY 20

08

FY 20

09

FY 20

10

FY 20

11

FY 20

12

Available Funding

13

Typical Loan/Mortgage

Future Earnings

14

State Highway Fund Bonds Prop 14

• Authority granted in 2003 – 20-Year maximum maturity – Annual Debt Service no more than 10% of revenue – Lifetime cap of $6 Billion in bonds issued

• Annual cap of $1.5 Billion issued • At least $1.2 Billion for safety projects

• Future revenues pledged – All revenues of the State Highway Fund

• State motor fuel taxes, vehicle registration fees, federal highway funds, etc.

15

Texas Mobility Fund State Highway Fund Bonds

Prop 14

16

Texas Mobility Fund • Fund Established in 2001

– 30-Year maximum maturity – 1.10 Minimum Coverage (GO backstop)

• If dedicated revenues in a year are not sufficient to pay debt service then GR makes up the difference

– Comptroller Certified projection of revenue

• Dedicated Revenues for debt service – Vehicle Inspection Fees; Driver Record Information Fees; Driver’s

License Fees; and, Certificate of Title Fees

17

Texas Mobility Fund Texas Mobility Fund

Bond Process

18

$5 Billion of G.O. Bonds Prop 12

• Constitutional Amendment approved in 2007 – To provide funding for highway improvement projects – Maximum of $5 Billion to be issued – Debt Service paid by General Revenue (GR)

• Enabling legislation passed in 2009 – HB 1, First Called Session – 30 year maximum maturity – $2 billion program approved in budget

• Actions in 2011 – $3 billion program approved in budget

19

Texas Mobility Fund Prop 12 Bond Process

20

Texas Mobility Fund Debt Summary

Program Issued Authorized Total Repaid MADS

Prop 14 $4.6 billion $6.0 billion $9.4 billion $407 million

TMF $6.3 billion $6.3 billion $12.5 billion $504 million

Prop 12 $1.0 billion $5.0 billion $9.2 billion $310 million

Total $11.9 billion $17.3 billion $31.1 billion $1,221 million