LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 19, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1812 by Wohlgemuth (Relating to a franchise tax credit
for expenditures made toward the cost of long-term care
insurance policies for certain employees.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1812, As Introduced: negative impact of $(1,586,000) through *
* the biennium ending August 31, 2003. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (1,586,000) *
* 2004 (2,118,000) *
* 2005 (2,480,000) *
* 2006 (2,902,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) from *
* General Revenue Fund *
* 0001 *
* 2002 $0 *
* 2003 (1,586,000) *
* 2004 (2,118,000) *
* 2005 (2,480,000) *
* 2006 (2,902,000) *
*****************************************************
Fiscal Analysis
The bill amends Chapter 171 of the Tax Code, authorizing a franchise tax
credit for an employer's expenses of providing a long-term care insurance
policy for an employee or the employee's spouse or parent.
For a policy that does not allow individuals to build equity in the
policy, the credit would be equal to the lesser of 30 percent of the
actual insurance costs incurred by the employer or $150 per insured
person. For a policy that allows individuals to build equity in the
policy, the credit would be equal to the lesser of 40 percent of the
actual insurance costs incurred by the employer or $200 per insured
person. The credit could not exceed $10,000 per report.
The bill takes effect January 1, 2002, and it applies to a tax report due
on or after that date and to an insurance expenditure made on or after
that date.
Methodology
This estimate is based on analysis done by the Comptroller's Office.
The Office estimated fiscal impact as based on actual credit data from
states that have similar tax credits. The calculations were adjusted to
reflect economic and tax system differences between Texas and the
comparison states.
The bill has no fiscal impact in fiscal year 2002, because the corporate
accounting year on which the fiscal year 2002 tax report is based would
be concluded before the bill's effective date. The bill has a reduced
revenue impact in fiscal year 2003, because the accounting year for
non-calendar year corporations would be partially completed before the
effective date. The bill would be fully implemented in fiscal year
2004.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, CT