LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 9, 1999 TO: Honorable Rene Oliveira, Chair, House Committee on Ways & Means FROM: John Keel, Director, Legislative Budget Board IN RE: HB551 by Goolsby (relating to exempting certain small corporations from the franchise tax), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB551, Committee Report 1st House, Substituted: negative impact * * of $(57,167,000) through the biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(28,234,000) * * 2001 (28,933,000) * * 2002 (30,658,000) * * 2003 (32,599,000) * * 2004 (34,697,000) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * General Revenue Fund * * 0001 * * 2000 $(28,234,000) * * 2001 (28,933,000) * * 2002 (30,658,000) * * 2003 (32,599,000) * * 2004 (34,697,000) * ***************************************************** Fiscal Analysis The bill would exempt from the franchise tax any corporation with $100,000 or less in gross receipts. This portion of the bill would take effect January 1, 2000 and only would apply to franchise tax reports originally due on or after that date. Before the beginning of the 79th Legislative Session, the Comptroller would be required to report to the Legislature and the Governor regarding the exemption's impact on the state economy and on the administration of tax law, including a recommendation for retaining, eliminating, or amending the exemption. Methodology The proposed change in law was modeled on a firm-by-firm basis by the Comptroller's Office. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts LBB Staff: JK, CT, BB, BR