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
          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 
         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.
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
               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