LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 25, 1997
TO: Honorable Rene Oliveira, Chair IN RE: House Bill No. 2001
Committee on Economic Development By: Oliveira
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2001 ( Relating
to the enterprise zone program.) this office has detemined the
following:
Biennial Net Impact to General Revenue Funds by HB2001-As Introduced
Implementing the provisions of the bill would result in a net
positive impact of $828,000 to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
This bill would amend Chapter 2303 of the Government Code and
Chapters 151 and 171 of the Tax Code in order to make several
changes to the Texas Enterprise Zone Program administered by
the Department of Commerce (TDOC). The most significant changes
would occur in the Tax Code and would repeal the provision that
provides a franchise tax refund and would increase the amount
of the sales tax refund for new and retained jobs created by
businesses designated as enterprise projects.
In addition,
the bill would lower the number of years an area could be designated
an enterprise zone. The bill would revise the definition of
retained jobs that are eligible for a sales tax refund and the
criteria that must be met in order for a business to qualify
as an enterprise project. The bill would lower the number of
new and retained jobs that can be eligible for a refund granted
an enterprise project.
Methodolgy
The 1996 level of state sales tax refunds report in the Enterprise
Zone Program Fiscal Year 1996 Cost-Benefit Analysis was used
to estimate the increase in the existing cost of sales tax refunds
due to the 25 percent increase the bill provides for sale tax
refunds for new and retained jobs. Data from the fiscal year
1996 report was used to estimate the savings resulting from
the repeal of the franchise tax provision of the Enterprise
Zone program. The savings was estimated as the average of the
last five year of franchise tax refunds. The estimate assumes
TDOC would have sufficient appropriation authority to cover
any cost associated with administering the provisions of this
bill .
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 Probable
Savings/(Cost) Savings/(Cost)
from General from General
Revenue Fund Revenue Fund
0001 0001
1998 $814,000 ($400,000)
1998 814,000 (400,000)
2000 814,000 (400,000)
2001 814,000 (400,000)
2002 814,000 (400,000)
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 $414,000
1999 414,000
2000 414,000
2001 414,000
2002 414,000
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Source: Agencies: 465 Department of Commerce
304 Comptroller of Public Accounts
LBB Staff: JK ,TH ,CG