LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 30, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3140 by Swinford (Relating to eligibility for certain
franchise tax credits.), As Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3140, As Introduced: negative impact of $(626,000) 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 $(282,000) *
* 2003 (344,000) *
* 2004 (395,000) *
* 2005 (422,000) *
* 2006 (453,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) from *
* General Revenue Fund *
* 0001 *
* 2002 $(282,000) *
* 2003 (344,000) *
* 2004 (395,000) *
* 2005 (422,000) *
* 2006 (453,000) *
*****************************************************
Fiscal Analysis
The bill amends a portion of the franchise tax law, Section 171.751(1) of
the Tax Code, by adding thirteen 4-digit SIC codes to the industry
definition of agricultural processing. Industries defined as
agricultural processing industries by Section 171.751(1) are eligible for
franchise tax credits for job creation and capital investment if the job
creation or capital investment activity occurs in a county with a
population of less than 50,000.
The following industries would be added to the definition: manmade
organic fibers (SIC 2824); drugs (SIC 2833-2836); soaps (SIC 2841);
industrial organic chemicals (SIC 2861, SIC 2865, SIC 2869); adhesives
and sealants (SIC 2891); chemicals not elsewhere classified (SIC 2899);
vitreous china table and kitchen articles (SIC 3262); and lead pencils,
crayons, and artists' materials (SIC 3952).
The bill takes effect January 1, 2002 and would apply to reports and
taxes originally due on or after that date.
Methodology
This estimate is based upon analyses done by the Comptroller's Office.
Comptroller staff used county employment and wage data for the industries
added to the definition of agricultural processing and compared to
similar data for industries included under the current definition. The
data came from counties designated as limited-purpose strategic
investment area counties for fiscal year 2001. Estimated agricultural
processing credits based on the existing industry definition were
increased to reflect the additional industries. The impact for fiscal
year 2002 was adjusted to reflect the January 1, 2002 effective date and
differences in corporate accounting years.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, CT