LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                             February 6, 2001
  
  
          TO:  Honorable David Sibley, Chair, Senate Committee on
               Business & Commerce
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  SB41  by Zaffirini (Relating to a franchise tax credit
               for expenditures made toward the cost of long-term care
               insurance policies for certain employees.), As
               Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  SB41, As Introduced:  negative impact of $(793,000) 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                            (793,000)  *
          *       2004                          (1,059,000)  *
          *       2005                          (1,240,000)  *
          *       2006                          (1,450,000)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year    Probable Revenue Gain/(Loss) from   *
         *                      General Revenue Fund          *
         *                              0001                  *
         *      2002                                       $0 *
         *      2003                                (793,000) *
         *      2004                              (1,059,000) *
         *      2005                              (1,240,000) *
         *      2006                              (1,450,000) *
         *****************************************************
  
Fiscal Analysis
  
The bill authorizes a franchise tax credit for employer expenditures on
long-term care insurance provided an employee or the employee's spouse or
parent.

The credit would be equal to the lesser of 20 percent of the actual
insurance cost incurred by the employer or $100 per insured person.  The
total credit per tax report could not exceed $5,000 per year.

The bill has an effective date of January 1, 2002.  The bill would have
no fiscal impact in fiscal year 2002 , because the corporate accounting
year on which a fiscal year 2002 tax report would be based would have
concluded before the effective date of the bill.  Fiscal year 2003
reports and revenues would reflect only a partial year effect of the
bill.  The bill would be fully implemented in fiscal year 2004.
  
  
Methodology
  
Comptroller analysis of Texas franchise tax reports and the experience of
other states that provide similar tax credits provide the basis for this
estimate.
  
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, SD, WP, CT