LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 3, 1995
TO: Honorable Rene O. Oliveira, Chair IN RE: House Bill No. 2065
Committee on Economic Development By: Oliveira
House of Representatives
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
2065 (relating to enterprise zones) this office has determined
the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
The bill would require the Department of Commerce to prepare a
cost-benefit analysis of the enterprise zone program on or before
December 1 of each even-numbered year. The bill would require
the State Auditor's office to submit the cost-benefit analysis
and comments to the governor, the lieutenant governor, and the
speaker of the House of Representatives.
The bill would require the Office of the Attorney General to
certify that an enterprise zone area is an area that has suffered
from substantial economic hardship caused by significant and
repeated criminal activity committed by gang members.
The bill would limit the number of businesses that may be
designated enterprise projects to 65 during any biennium.
The Sales Tax Chapter of the Tax Code would be amended to allow
an eligible enterprise project a refund of state sales taxes paid
on purchases of labor for remodeling, rehabilitating, or
constructing a structure; and electricity and natural gas.
The portion of the code which provides for the rebate, refund, or
payment of 100 percent of state sales and use taxes and 100
percent of state hotel occupancy taxes paid by a qualified hotel
project would be repealed. The bill would eliminate references
to qualified hotel projects in the Texas Enterprise Zone Act.
An enterprise project designated under Chapter 2303, Government
Code, after August 31, 1995 would not be eligible to receive a
state sales tax refund or a reduction in state franchise taxes
before September 1, 1997.
Provisions of the bill affecting sales and used tax refunds would
have no significant fiscal implication to the state. Such
refunds have already been incorporated into the Comptroller's
Biennial Revenue Estimate.
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Probable Cost to Change in
Year Administrative the State Number of State
Cost Auditor's Employees from
to the Office of Office Out of FY 1995
the General Revenue
Attorney General Fund 001
Out
of General
Revenue
Fund 001
1996 $139,118 $12,375 2.0
1997 133,812 2.0
1998 133,812 12,375 2.0
1999 133,812 2.0
2000 133,812 12,375 2.0
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
The fiscal implication to units of local government cannot be
determined.
Source: Comptroller of Public Accounts, Department of Commerce,
Office of the Attorney General, State
Auditor's Office
LBB Staff: JK, VS, RR