LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 21, 1997 TO: Honorable David Sibley, Chair IN RE: Senate Bill No. 555, Committee Report 1st House, Substituted Committee on Economic Development By: Sibley Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB555 ( Relating to certain business organizations.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB555-Committee Report 1st House, Substituted FN Revision 2 Implementing the provisions of the bill would result in a net posititve impact of $283,920 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 various portions of the Texas Business Corporation Act, the Texas Miscellaneous Corporation Laws Act, the Texas Limited Liability Company Act, the Texas Revised Limited Partnership Act, and the Texas Revised Partnership Act. This bill would add the Business Combination Law as part of the Texas Business Corporation Act. This bill would take effect September 1, 1997 and would apply to all entities affected regardless of the date of formation or incorporation. Methodolgy The changes to the business organization statutes would provide for a business reorganization process to be known as a "conversion," in which a combination of two business entities occurs. In addition, the bill would provide statutory recognition to shareholder agreements. The bill also would provide for the electronic filing of documents with the Secretary of State. The Secretary of State estimates that amendments to the Texas Revised Partnership Act would have a positive impact on general revenue from filing fees for qualification of foreign limited liability partnerships. The Secretary of State projects that this revenue would be $136,500 in fiscal year 1998 and increasing amounts in subsequent years. 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 $136,500 1998 147,420 2000 159,213 2001 171,950 2002 185,706 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 $136,500 1999 147,420 2000 159,213 2001 171,950 2002 185,706 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 ,TH