LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 28, 1995
TO: Honorable Tom Craddick, Chair IN RE: Committee Substitute
Committee on Ways & Means for House
House of Representatives Bill No. 3155
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
3155 (relating to tax credits for real property contributed to
institutions of higher education) this office has determined the
following:
This bill allows certain universities to acquire real estate,
which would otherwise not be acquired due to insufficient funding
sources, in exchange for a state sales or franchise tax credit
granted to the property owner. The bill's provisions would be
effective only for the University of
Houston (UH) and only for property transferred to UH before
August 31, 1996.
The bill allows UH to petition the Higher Education Coordinating
Board for approval to obtain
the desired real estate. The board could approve the acquisition
if the real estate was included
in UH's master plan as a desired acquisition, if the real estate
were fairly priced, and if UH
did not have sufficient funds available otherwise.
If the board approved the petition, the Comptroller would be
required to grant the property owner a franchise or sales tax
credit within 10 days of the approval. The tax credit would
equal
50 percent of the fair market value of the property. The tax
credit could be taken by the former
property owners in equal increments over twenty years (five
percent of the total credit per year)
against their franchise tax or sales tax liability.
The bill becomes effective September 1, 1995 and expires on
September 1, 1997.
This fiscal note is premised on the transfer of one property to
the University of Houston worth
$13 million and is the minimum estimate of revenue losses.
Actual losses might be greater.
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 Revenue Probable
Year Loss to General Administrative
Revenue Fund 001 Cost to the
Comptroller's
Office from of
General Revenue
Fund 001
1995 $83,322
1996 325,000
1997 325,000
1998 325,000
1999 325,000
2000 325,000
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
LBB Staff: JK, CT, DF