LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 27, 2015 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3111 by Button (Relating to the rate of interest on certain tax refunds.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3111, As Introduced: a negative impact of ($436,054,000) through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($111,190,000) for the 2016-17 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 27, 2015
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3111 by Button (Relating to the rate of interest on certain tax refunds.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3111 by Button (Relating to the rate of interest on certain tax refunds.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB3111 by Button (Relating to the rate of interest on certain tax refunds.), As Introduced
HB3111 by Button (Relating to the rate of interest on certain tax refunds.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3111, As Introduced: a negative impact of ($436,054,000) through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($111,190,000) for the 2016-17 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3111, As Introduced: a negative impact of ($436,054,000) through the biennium ending August 31, 2017.Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($111,190,000) for the 2016-17 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($180,987,000) 2017 ($255,067,000) 2018 ($297,171,000) 2019 ($305,798,000) 2020 ($315,421,000)
2016 ($180,987,000)
2017 ($255,067,000)
2018 ($297,171,000)
2019 ($305,798,000)
2020 ($315,421,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromProperty Tax Relief Fund304 Probable Revenue (Loss) fromOther Funds 2016 ($180,987,000) ($46,150,000) ($3,614,000) 2017 ($255,067,000) ($65,040,000) ($5,094,000) 2018 ($297,171,000) ($75,776,000) ($5,934,000) 2019 ($305,798,000) ($77,976,000) ($6,107,000) 2020 ($315,421,000) ($80,430,000) ($6,299,000)
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromProperty Tax Relief Fund304 Probable Revenue (Loss) fromOther Funds 2016 ($180,987,000) ($46,150,000) ($3,614,000) 2017 ($255,067,000) ($65,040,000) ($5,094,000) 2018 ($297,171,000) ($75,776,000) ($5,934,000) 2019 ($305,798,000) ($77,976,000) ($6,107,000) 2020 ($315,421,000) ($80,430,000) ($6,299,000)
2016 ($180,987,000) ($46,150,000) ($3,614,000)
2017 ($255,067,000) ($65,040,000) ($5,094,000)
2018 ($297,171,000) ($75,776,000) ($5,934,000)
2019 ($305,798,000) ($77,976,000) ($6,107,000)
2020 ($315,421,000) ($80,430,000) ($6,299,000)
Fiscal Analysis
The bill would amend Section 111.064 of the Tax Code, regarding state tax collection procedures and the rate of interest to be paid on tax refunds or credits. The bill would stipulate that, for a refund or credit of state taxes, the rate of interest would be the rate set in Section 111.060 Tax Code. The bill would require that refunds or credits claimed after August 31, 2015 would accrue interest at the prime interest rate plus one percent. Section 111.060 references the prime interest rate as published in the Wall Street Journal on the first business day of each calendar year. The bill would take effect September 1, 2015.
Methodology
Currently, refund claims accrue interest at either the Treasury Pool rate or the prime interest rate plus one percent, whichever is less. The estimated fiscal impact was based on historic interest payments on a refund or credit of tax in Comptroller records, estimates in the Comptroller's Fall 2014 state economic forecast, and estimated Treasury Pool interest rates. The estimate assumed that taxpayers do not overpay in an effort to receive a higher return.
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: UP, KK, SD
UP, KK, SD