LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 4, 2001
TO: Honorable Jim Solis, Chair, House Committee on Economic
Development
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3271 by Coleman (Relating to the regulation of state
subsidies granted for economic development purposes.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3271, As Introduced: negative impact of $(262,436) 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 $(134,818) *
* 2003 (127,618) *
* 2004 (127,618) *
* 2005 (127,618) *
* 2006 (127,618) *
****************************************************
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 $(134,818) 2.0 *
* 2003 (127,618) 2.0 *
* 2004 (127,618) 2.0 *
* 2005 (127,618) 2.0 *
* 2006 (127,618) 2.0 *
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Fiscal Analysis
The bill would provide for the standardization of requirements to be met
by beneficiaries of public subsidies. Subsidies would include loans,
grants, tax abatements, tax increment financing, contribution of
property, tax reduction, and preferential use of a government facility
that is provided to a business or non-profit organization for economic
development purposes.
The bill would allow for each state agency and local entities to create a
subsidy agreement for assistance awarded in excess of $25,000 (or
$75,000 if the assistance is a loan). The subsidy agreement would
provide for a standardized criteria that must be met in order to receive
a subsidy and minimum required wage levels for jobs created with the
subsidy. No state agency that grants subsidies would be able to enter
into a subsidy agreement without the Texas Department of Economic
Development (TDED) approving the eligibility of the recipient to receive
the subsidy. Eligibility to receive a subsidy may be impacted if the
intended recipient has not complied with a previous subsidy agreement.
The bill would take effect September 1, 2001.
Methodology
The Department of Economic Development estimates a cost of $134,818 for
FY 2002 and $127,618 for FY 2003 and each subsequent year, and two FTEs.
In order to carry out the responsibilities of the program at least one
additional Finance Program FTE would be needed and one additional
Attorney in the legal department to coordinate with other agencies
affected by the legislation. TDED also anticipates increased printing
expenses of $1,800 per year.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 480 Department of Economic Development
LBB Staff: JK, JO, RT, ER