LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 23, 1997
TO: Honorable Tom Craddick, Chair IN RE: Senate Bill No. 461,
As Engrossed
Committee on Ways & Means By: Moncrief
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB461 ( Relating
to the authority of the comptroller to contract for certain
tax collection services.)) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB461-As Engrossed
Implementing the provisions of the bill would result in a net
positive impact of $40,127,000 to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would appropriate revenue received from tax audits,
which would vary depending on the amount of revenue received
by the Comptroller for out-of-state audits by contract audit
entities.
Fiscal Analysis
The bill would amend Chapter 111 of the Tax Code to authorize
the Comptroller to contract with an appropriate vendor to develop
and implement an advanced database system to enhance tax collections.
The contract would allow the vendor that developed, implemented,
and maintained the system to receive compensation equal to the
product of the percentage stated in the contract and the amount
of revenue collected from audit and enforcement actions taken
by the Comptroller as a result of cases identified by the system.
The amount of compensation paid to a vendor could not exceed
any maximum amount stated in the contract.
The bill would
authorize the Comptroller to contract with one or more appropriate
persons to perform tax audits in states that were not covered
by Comptroller field offices. The contract would provide that
the person performing the audits receive compensation equal
to the product of a percentage stated in the contract and the
amount of revenue deposited into the State Treasury as a result
of the audits. The amount of compensation paid to a vendor
could not exceed any maximum amount stated in the contract.
The
bill would appropriate the revenue resulting from tax audits
conducted under the bill to the Comptroller for the fiscal biennium
ending August 31, 1999. The Comptroller could use this appropriation
only to pay contract expenses and the Comptroller's direct administrative
costs associated with those contracts. Any amounts that exceed
the amount necessary to pay these expenses and costs would be
transferred to the General Revenue Fund or any dedicated or
special funds to which the excess amount belongs.
Methodolgy
The state would receive additional revenue from audit payments,
collections through enforcement actions, and enhanced voluntary
compliance.
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 $3,210,000
1998 36,917,000
2000 47,328,000
2001 59,567,000
2002 74,665,000
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 $3,210,000
1999 36,917,000
2000 47,328,000
2001 59,567,000
2002 74,665,000
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
If a taxpayer, delinquent in state taxes, was also delinquent
in local taxes, the comptroller would attempt to collect the
delinquent local taxes on behalf of the appropriate locality
or localities. The comptroller would not attempt to collect
delinquent local taxes from a taxpayer who was not also delinquent
in state taxes. Consequently, the potential exists for units
of local government to receive a revenue gain due to increased
collection of delinquent local taxes.
Source: Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK ,RR ,RN