LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION March 31, 2009 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB3119 by Alvarado (Relating to a franchise tax credit for the acquisition and installation of certain air quality monitoring devices to evaluate the emission of air contaminants.), As Introduced The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $525,000 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
March 31, 2009
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB3119 by Alvarado (Relating to a franchise tax credit for the acquisition and installation of certain air quality monitoring devices to evaluate the emission of air contaminants.), As Introduced
TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB3119 by Alvarado (Relating to a franchise tax credit for the acquisition and installation of certain air quality monitoring devices to evaluate the emission of air contaminants.), 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
HB3119 by Alvarado (Relating to a franchise tax credit for the acquisition and installation of certain air quality monitoring devices to evaluate the emission of air contaminants.), As Introduced
HB3119 by Alvarado (Relating to a franchise tax credit for the acquisition and installation of certain air quality monitoring devices to evaluate the emission of air contaminants.), As Introduced
The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $525,000 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 $525,000 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 $0
2010 $0
2011 $0
2012 $0
2013 $0
2014 $0
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromProperty Tax Relief Fund304 2010 $0 2011 ($525,000) 2012 ($1,050,000) 2013 ($1,200,000) 2014 ($1,350,000)
Fiscal Year Probable Savings/(Cost) fromProperty Tax Relief Fund304 2010 $0 2011 ($525,000) 2012 ($1,050,000) 2013 ($1,200,000) 2014 ($1,350,000)
2010 $0
2011 ($525,000)
2012 ($1,050,000)
2013 ($1,200,000)
2014 ($1,350,000)
Fiscal Analysis
The bill would add new Subchapter U to Chapter 171 of the Tax Code, regarding the franchise tax. The new subchapter would establish a tax credit for the acquisition and installation of air quality monitoring devices, as defined in the bill. Under the bill, a taxable entity would qualify for the tax credit if it (1) provides for daily monitoring of air contaminants from a major source as defined in the Federal Clean Air Act; (2) makes and maintains records on emissions; and (3) provides the Texas Commission on Environmental Quality (TCEQ) a copy of the records. The records would have to include monitoring data on air pollutants listed in the Clean Air Act as well as other air contaminants. The amount of the credit would be based on the total cost of acquiring and installing the air quality monitoring devices. After acquiring and installing the devices, the credit would be equal to 35 percent of that cost on each of the next two reports and 10 percent of that cost on each of the following three reports. The credit would have to be claimed on consecutive reports. The credit on any report would be limited to the amount of franchise tax due after any other credits. The credit would not be transferable. A taxable entity claiming the credit would be required to provide along with its tax report a certification from TCEQ confirming that the taxable entity provided the records on emissions as required by the bill. The Comptroller would adopt rules to implement the bill's provisions. The bill would take effect on January 1, 2010, and apply to a report due on or after that date.
The bill would add new Subchapter U to Chapter 171 of the Tax Code, regarding the franchise tax.
The new subchapter would establish a tax credit for the acquisition and installation of air quality monitoring devices, as defined in the bill.
Under the bill, a taxable entity would qualify for the tax credit if it (1) provides for daily monitoring of air contaminants from a major source as defined in the Federal Clean Air Act; (2) makes and maintains records on emissions; and (3) provides the Texas Commission on Environmental Quality (TCEQ) a copy of the records. The records would have to include monitoring data on air pollutants listed in the Clean Air Act as well as other air contaminants.
A taxable entity claiming the credit would be required to provide along with its tax report a certification from TCEQ confirming that the taxable entity provided the records on emissions as required by the bill.
The Comptroller would adopt rules to implement the bill's provisions.
The bill would take effect on January 1, 2010, and apply to a report due on or after that date.
Methodology
The estimated fiscal impact of the bill is based on information from TCEQ on the number of major source sites in Texas and on the range of costs of air quality monitoring systems. According to TCEQ, there was a small volume of voluntary air quality monitoring activity. Most of the air quality monitoring occurring was either done by TCEQ or was the result of enforcement actions. There would be no fiscal impact in 2010 since a taxable entity could not earn any credit prior to that year. Credit earned in 2010 would be reported on a return due in 2011.
The estimated fiscal impact of the bill is based on information from TCEQ on the number of major source sites in Texas and on the range of costs of air quality monitoring systems. According to TCEQ, there was a small volume of voluntary air quality monitoring activity. Most of the air quality monitoring occurring was either done by TCEQ or was the result of enforcement actions.
There would be no fiscal impact in 2010 since a taxable entity could not earn any credit prior to that year. Credit earned in 2010 would be reported on a return due in 2011.
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