LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION April 15, 2009 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB277 by Zerwas (Relating to the franchise tax and alternative revenue sources and spending priorities for this state.), As Introduced The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $105,125,000 for the 2010-11 biennium. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
April 15, 2009
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB277 by Zerwas (Relating to the franchise tax and alternative revenue sources and spending priorities for this state.), As Introduced
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB277 by Zerwas (Relating to the franchise tax and alternative revenue sources and spending priorities for this state.), As Introduced
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB277 by Zerwas (Relating to the franchise tax and alternative revenue sources and spending priorities for this state.), As Introduced
HB277 by Zerwas (Relating to the franchise tax and alternative revenue sources and spending priorities for this state.), As Introduced
The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $105,125,000 for the 2010-11 biennium. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $105,125,000 for the 2010-11 biennium. Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2010 $0 2011 $0 2012 $0 2013 $0 2014 ($3,025,848,000)
2010 $0
2011 $0
2012 $0
2013 $0
2014 ($3,025,848,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund304 2010 $0 ($18,000,000) 2011 $0 ($87,125,000) 2012 $0 ($90,174,000) 2013 $0 ($93,781,000) 2014 ($3,025,848,000) ($2,006,468,000)
Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund304 2010 $0 ($18,000,000) 2011 $0 ($87,125,000) 2012 $0 ($90,174,000) 2013 $0 ($93,781,000) 2014 ($3,025,848,000) ($2,006,468,000)
2010 $0 ($18,000,000)
2011 $0 ($87,125,000)
2012 $0 ($90,174,000)
2013 $0 ($93,781,000)
2014 ($3,025,848,000) ($2,006,468,000)
Fiscal Analysis
The bill would amend Chapter 171 of the Tax Code, relating to the amount of total revenue an entity subject to the franchise tax may have for a period and owe no tax. The current amount is $300,000. This bill would raise the amount to $600,000 effective January 1, 2010, and to $1,000,000 effective January 1, 2011. The bill would require the Comptroller's Office to conduct a comprehensive study that (1) analyzes and compares revenue alternatives to the franchise tax; (2) prioritizes the revenue needs of this state; and (3) identifies potential reductions in state expenditures. The Comptroller would be required to submit a report with the results from the study to the Legislature not later than November 1, 2010, to include specifying one or more revenue alternatives that would effectively meet the state's revenue needs, specific state expenditure reductions, and legislation needed to implement those revenue and expenditure proposals. The bill would repeal Chapter 171 (franchise tax) of the Tax Code on January 1, 2014. The bill would take effect September 1, 2009.
The bill would amend Chapter 171 of the Tax Code, relating to the amount of total revenue an entity subject to the franchise tax may have for a period and owe no tax. The current amount is $300,000. This bill would raise the amount to $600,000 effective January 1, 2010, and to $1,000,000 effective January 1, 2011.
The bill would require the Comptroller's Office to conduct a comprehensive study that (1) analyzes and compares revenue alternatives to the franchise tax; (2) prioritizes the revenue needs of this state; and (3) identifies potential reductions in state expenditures. The Comptroller would be required to submit a report with the results from the study to the Legislature not later than November 1, 2010, to include specifying one or more revenue alternatives that would effectively meet the state's revenue needs, specific state expenditure reductions, and legislation needed to implement those revenue and expenditure proposals.
The bill would repeal Chapter 171 (franchise tax) of the Tax Code on January 1, 2014.
The bill would take effect September 1, 2009.
Methodology
Data from the Comptroller's Office tax files were used to estimate the fiscal impact of raising the total revenue threshold for no-tax-due amounts for 2010 and 2011. The fiscal impact shown in 2014 reflects the repeal of Chapter 171 of the Tax Code. The fiscal impact of the required study and any potential revenue alternatives that might be enacted cannot be determined.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, MN, SD, SM
JOB, MN, SD, SM