LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                               May 10, 2001
  
  
          TO:  Honorable Rodney Ellis, Chair, Senate Committee on Finance
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3391  by Oliveira (Relating to the definition of a
               strategic investment area for purposes of certain tax
               credits.), As Engrossed
  
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*  No significant fiscal implication to the State is anticipated.        *
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The bill amends a portion of the franchise tax law,  Section 171.721 of
the Tax Code, relating to the definition of a strategic investment area
(SIA).  The bill would add a county within the state that has a
spaceport, as defined by the Development Corporation Act, within its
boundaries.

There are active spaceport authorities in three counties of Texas:
Brazoria, Kenedy, and Pecos counties.  Of these, Kenedy County is not
currently designated as an SIA.  

According to the Development Corporation Act, a spaceport includes:  (1)
an area intended to be used to launch or land a spacecraft; (2) a
spaceport building or facility located on an appurtenant to a launching
or landing area; (3) an area appurtenant to a launching or landing area
that is intended for use for a spaceport building or facility; and (4) a
right-of-way related to a launching or landing area, building, facility
or other area that is appurtenant to a launching or landing area.

Based on information from the South Texas Spaceport Consortium, the
spaceport in Kenedy County is in the planning stage.  Construction might
begin as early as calendar year 2003, but that date is subject to much
uncertainty.  Because Kenedy County does not have a spaceport at this
time, the bill would have no immediate fiscal impact.

All of the more populous counties surrounding Kenedy County are SIA's.
These counties with cities and a large labor force would more likely be
the locations where research facilities would locate rather than Kenedy
County.  The granting by the bill of franchise tax credits would have a
negative impact on state general revenues, but given that few facilities
would soon be located in Kenedy County, the negative impact would not be
significant.
  
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