LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 8, 2001
TO: Honorable Frank Madla, Chair, Senate Committee on
Intergovernmental Relations
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB820 by Giddings (Relating to the number of qualified
businesses designated as enterprise projects in certain
municipalities.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB820, As Engrossed: negative impact of $(586,601) through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(52,877) *
* 2003 (533,724) *
* 2004 (533,724) *
* 2005 (533,724) *
* 2006 (533,724) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 2001 *
* 0001 *
* 2002 $(52,877) 1.0 *
* 2003 (533,724) 1.0 *
* 2004 (533,724) 1.0 *
* 2005 (533,724) 1.0 *
* 2006 (533,724) 1.0 *
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Technology Impact
None.
Fiscal Analysis
The bill would amend Section 2303.403, Government Code, by increasing
from 65 to 85 the number of businesses that could become enterprise
projects each biennium.
The bill would allow for the designation of four projects per enterprise
zone for governing bodies of less than 250,000 in population and six
projects per zone for governing bodies of 250,000 or more. Currently,
program rule allows for up to four projects per governing body with the
ability to obtain two additional bonus projects through the scoring
process.
The Act would take effect September 1, 2001.
Methodology
According to the Texas Department of Economic Development (TDED), it is
estimated that the cost for carrying out the responsibilities of the
program would come from the General Revenue Fund in an amount of $52,877
in FY 2002 and $533,724 in FY 2003 and for each fiscal year thereafter.
The agency also assumes one additional FTE would be required.
The structure of the Enterprise Zone Program provides for benefits to
flow to businesses that have received designation as an enterprise
project. Based on the increase in the number of projects that could be
designated under the provisions of the bill, from 65 projects per year to
85 projects per year, TDED anticipates an increase in state benefits
dispensed under the program in the form of sales and use tax refunds and
franchise tax reductions.
According to TDED, the agency has experience in administering this
incentive program and thus has a history of costs involved with
implementation. It is assumed that TDED would be able to utilize
existing staffing currently administering the enterprise zone program to
defray the costs of credit underwriting. Additionally, it is also
assumed all marketing material costs would be absorbed through existing
programs.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 480 Department of Economic Development
LBB Staff: JK, DB, RT, ER