LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 28, 1999 TO: Honorable Kim Brimer, Chair, House Committee on Business & Industry FROM: John Keel, Director, Legislative Budget Board IN RE: HB2681 by Bosse (Relating to adoption of the Texas Business Organizations Code; providing penalties.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2681, As Introduced: positive impact of $1,304,130 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 * * 2001 $1,304,130 * * 2002 2,349,463 * * 2003 2,784,433 * * 2004 3,120,304 * * 2005 3,376,160 * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Probable Revenue Change in Number of * * Year Savings/(Cost) from Gain/(Loss) from State Employees from * * General Revenue Fund General Revenue Fund FY 1999 * * 0001 0001 * * 2001 $0 $1,304,130 0.0 * * 2002 (223,457) 2,572,920 1.0 * * 2003 (528,457) 3,312,890 3.0 * * 2004 (710,571) 3,830,875 4.0 * * 2005 (817,275) 4,193,435 4.0 * ************************************************************************** Fiscal Analysis The bill would require corporations, excluding non-profit corporations, and limited liability companies to file an annual report with the Secretary of State. Corporations and limited liability companies would pay a $15 filing fee if the report is filed on paper or a $5 filing fee if the report is filed electronically. Under the bill, the Office of the Secretary of State would review the annual reports for statutory compliance. The bill would increase 25 filing fees currently applied to business entities. For example, the Secretary of State estimates that the following fees are affected by the Act in the manner indicated below: Existing Fee Code Certificate of formation for a Professional Association: $300 $750 Certificate of formation for a Limited Liability Company [LLC]: $200 $300 Certificate of Registration of a Foreign LLC: $500 $750 Methodology The Secretary of State projects gains in General Revenue derived from fee increases (listed above) based upon statistical reports it maintains on document filings. The agency projects gains of $1,304,130 in fiscal year 2001 and a gain of $1,956,195 in fiscal year 2002 from filing fees. The Secretary of State anticipates increased workload resulting from provisions that require annual reports to be filed. The agency projects that it will require four additional employees. The agency anticipates that the cost of generating reports and notices and out-sourcing mailing and procedures relating to the report would cost $5 per document. To handle the increasing workload, the agency anticipates the bill will require one additional employee in fiscal year 2002, three additional employees in fiscal year 2003 and a total of four additional employees in fiscal year 2004. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, TH, PH, SG