LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION May 17, 2021 TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB1258 by Ashby (Relating to data matching with financial institutions to facilitate the collection of certain delinquent tax liabilities.), As Engrossed Estimated Two-year Net Impact to General Revenue Related Funds for HB1258, As Engrossed : a positive impact of $38,480,000 through the biennium ending August 31, 2023.Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,530,000 for the 2022-23 biennium. Any gain to the Property Tax Relief Fund will result in an equal amount of savings to the General Revenue for funding the Foundation School Program. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2022$12,860,0002023$25,620,0002024$24,340,0002025$19,470,0002026$15,580,000All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain fromGeneral Revenue Fund1 Probable Revenue Gain fromProperty Tax Relief Fund3042022$12,860,000$510,0002023$25,620,000$1,020,0002024$24,340,000$970,0002025$19,470,000$770,0002026$15,580,000$620,000 Fiscal AnalysisThe bill would amend Chapter 111 of the Tax Code, relating to data matching with financial institutions to facilitate the collection of state delinquent tax liabilities.The bill allows the Comptroller to request that financial institutions search their systems for delinquent taxpayers with accounts at those institutions. Search criteria can include account holder names, social security numbers, or federal employer identification numbers. Reports from the financial institution to the Comptroller would contain account types and amount of funds within accounts.The Comptroller's Enforcement division would incorporate the record match information into current enforcement processes by targeting the matched accounts for freeze action, significantly improving efficiency, and increasing return on delinquent tax collections.The bill would take effect September 1, 2021.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
May 17, 2021
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB1258 by Ashby (Relating to data matching with financial institutions to facilitate the collection of certain delinquent tax liabilities.), As Engrossed
TO: Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB1258 by Ashby (Relating to data matching with financial institutions to facilitate the collection of certain delinquent tax liabilities.), As Engrossed
Honorable Jane Nelson, Chair, Senate Committee on Finance
Honorable Jane Nelson, Chair, Senate Committee on Finance
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB1258 by Ashby (Relating to data matching with financial institutions to facilitate the collection of certain delinquent tax liabilities.), As Engrossed
HB1258 by Ashby (Relating to data matching with financial institutions to facilitate the collection of certain delinquent tax liabilities.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for HB1258, As Engrossed : a positive impact of $38,480,000 through the biennium ending August 31, 2023.Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,530,000 for the 2022-23 biennium. Any gain to the Property Tax Relief Fund will result in an equal amount of savings to the General Revenue for funding the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1258, As Engrossed : a positive impact of $38,480,000 through the biennium ending August 31, 2023.Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,530,000 for the 2022-23 biennium. Any gain to the Property Tax Relief Fund will result in an equal amount of savings to the General Revenue for funding the Foundation School Program.
Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,530,000 for the 2022-23 biennium. Any gain to the Property Tax Relief Fund will result in an equal amount of savings to the General Revenue for funding the Foundation School Program.
General Revenue-Related Funds, Five- Year Impact:
2022 $12,860,000
2023 $25,620,000
2024 $24,340,000
2025 $19,470,000
2026 $15,580,000
All Funds, Five-Year Impact:
2022 $12,860,000 $510,000
2023 $25,620,000 $1,020,000
2024 $24,340,000 $970,000
2025 $19,470,000 $770,000
2026 $15,580,000 $620,000
Fiscal Analysis
The bill would amend Chapter 111 of the Tax Code, relating to data matching with financial institutions to facilitate the collection of state delinquent tax liabilities.The bill allows the Comptroller to request that financial institutions search their systems for delinquent taxpayers with accounts at those institutions. Search criteria can include account holder names, social security numbers, or federal employer identification numbers. Reports from the financial institution to the Comptroller would contain account types and amount of funds within accounts.The Comptroller's Enforcement division would incorporate the record match information into current enforcement processes by targeting the matched accounts for freeze action, significantly improving efficiency, and increasing return on delinquent tax collections.The bill would take effect September 1, 2021.
Methodology
The bill would bring an estimated additional $13.37 million to the treasury for fiscal year 2022, and an additional $26.64 million for fiscal year 2023. The estimate is based on the conservative end of success rates from five other states that have implemented similar programs. Under the provisions of the bill, it is estimated that of the 67,698 freezes issued in fiscal year 2019, an additional 6,326 would have been successfully captured, with an average amount of $4,248 per capture, resulting in a gain of $26.87 million. As a result of initial program implementation, partial effects would occur in fiscal 2022.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, AAL, CMA, SD
JMc, KK, AAL, CMA, SD