HB 542

relating to the use of certain money transferred to and deposited in
the state highway fund as required by the Texas Constitution.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 162.503, Tax Code, is amended to read as
Sec. 162.503.  ALLOCATION OF GASOLINE TAX.  [(a)]  On or
before the fifth workday after the end of each month, the
comptroller, after making all deductions for refund purposes and
for the amounts allocated under Sections 162.502 and 162.5025,
shall allocate the net remainder of the taxes collected under
(1)  one-fourth of the tax shall be deposited to the
credit of the available school fund;
(2)  one-half of the tax shall be deposited to the
credit of the state highway fund for the purposes authorized by
Section 7-a, Article VIII, Texas Constitution [construction and
maintenance of the state road system under existing law]; and
(3)  from the remaining one-fourth of the tax the
(A)  deposit to the credit of the county and road
district highway fund all the remaining tax receipts until a total
of $7,300,000 has been credited to the fund each fiscal year; and
(B)  after the amount required to be deposited to
the county and road district highway fund has been deposited,
deposit to the credit of the state highway fund the remainder of the
one-fourth of the tax, the amount to be provided on the basis of
allocations made each month of the fiscal year, which sum shall be
used by the Texas Department of Transportation for the
construction, improvement, and maintenance of farm-to-market
SECTION 2.  Section 201.002(c), Transportation Code, is
(c)  All money authorized to be appropriated in accordance
with this section for the operation of the department and the
purchase of equipment shall be appropriated from the state highway
fund.  The commission shall use the amount remaining in the fund
for the furtherance of public road construction and for
establishing a system of state highways and for transit-oriented
SECTION 3.  Section 202.002(a), Transportation Code, is
(a)  The commission shall use automobile registration fees
in the state highway fund for the purposes authorized by Section
7-a, Article VIII, Texas Constitution, [to maintain state highways]
and may not divert funds from automobile registration fees for
SECTION 4.  Section 222.001, Transportation Code, is amended
by amending Subsection (a) and adding Subsection (a-1) to read as
(a)  Money that is required to be used for public roadways by
the Texas Constitution, except for Section 7-a, Article VIII, Texas
Constitution, or federal law and that is deposited in the state
treasury to the credit of the state highway fund, including money
deposited to the credit of the state highway fund under Title 23,
United States Code, may be used only:
(1)  to improve the state highway system; or
(2)  to mitigate adverse environmental effects that
result directly from construction or maintenance of a state highway
(a-1)  Money that is required to be used for public roadways
and transit-oriented projects by the Texas Constitution and that is
deposited in the state treasury to the credit of the state highway
(1)  improve the state highway system;
(2)  support transit-oriented projects; or
(3)  mitigate adverse environmental effects that
result directly from construction or maintenance of a project
described by Subdivision (1) or (2).
SECTION 5.  Section 222.002, Transportation Code, is amended
Sec. 222.002.  USE OF STATE HIGHWAY FUND FOR DEPARTMENT
FUNCTIONS.   Money in the state highway fund that is not required to
be spent for public roadways or transit-oriented projects by the
Texas Constitution or federal law may be used for any function
SECTION 6.  This Act takes effect September 1, 2027, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, authorizing the use of money in the state
highway fund for transit-oriented projects is approved by the
voters.  If that amendment is not approved by the voters, this Act