LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 26, 1997
TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 760, Committee Report 1st House, Substituted
Committee on Ways & Means By: Shields
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB760 ( Relating
to a franchise tax credit for contributions made to medical
savings accounts.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB760-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
impact of $0 to General Revenue Related Funds through the biennium
ending August 31, 1999.
Fiscal Analysis
The bill would allow corporations, employing 50 or fewer employees
and not offering employer-paid health insurance, eligible for
a franchise tax credit. The credit would be limited to 50 percent
of the total amount of money contributed by the employer to
the employee medical savings accounts, on and after January
1, 1997.
Unused credits could be carried over until another
tax year or until completely used.
The bill would apply to
franchise tax reports and payments due on or after January 1,
2000 and would be effective September 1, 1997.
Methodolgy
The estimate assumes that the use of the medical savings accounts
would allow a representative employer to reduce the cost of
employer-provided health benefits by 30 percent, a cost savings
that would be split between contributions to a medical savings
account and the cost of high deductible insurance policy.
The
estimate assumes the use of medical savings accounts by corporations
would begin slowly, but accelerate over time.
The bill has
no fiscal impact in fiscal years 1998 and 1999, because the
bill would apply only to franchise tax reports and payments
due during and after fiscal year 2000.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue
Gain/(Loss) from
General Revenue
Fund
0001
1998 $0
1998 0
2000 (15,184,000)
2001 (31,936,000)
2002 (58,512,000)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 (15,184,000)
2001 (31,936,000)
2002 (58,512,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No fiscal implication to units of local government is anticipated.
Source: Agencies:
LBB Staff: JK ,RR ,CT