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 ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** 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