LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 27, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1037 by Ellis, Rodney (Relating to authorizing the
comptroller to establish a program to permit certain
certified public accountants to perform certain
audits.), Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1037, Committee Report 2nd House, Substituted: positive impact *
* of $6,962,000 through the biennium ending August 31, 2003. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $3,381,000 *
* 2003 3,581,000 *
* 2004 3,581,000 *
* 2005 3,581,000 *
* 2006 3,581,000 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Probable Change in Number of *
* Year Gain/(Loss) to Savings/(Cost) to State Employees from *
* General Revenue Fund General Revenue Fund FY 2001 *
* 0001 0001 *
* 2002 $3,756,000 $(375,000) 2.0 *
* 2003 3,756,000 (175,000) 2.0 *
* 2004 3,756,000 (175,000) 2.0 *
* 2005 3,756,000 (175,000) 2.0 *
* 2006 3,756,000 (175,000) 2.0 *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to allow the
Comptroller, by rule, to establish a program whereby taxpayers could hire
a certified public accountant, not employed by the Comptroller, to
perform an audit to determine a taxpayer's liability for the taxes under
Chapter 151.
The program would include eligibility requirements for taxpayer
participation, training requirements and qualifications, and safeguards
to protect the confidentiality of information used in connection with the
audit. The Comptroller could waive all or part of the accrued interest
on an amount resulting from an audit under the program.
The bill would take effect immediately upon enactment, assuming that it
received the requisite two-thirds majority votes in both houses of the
Legislature. Otherwise, it would take effect September 1, 2001.
Methodology
The bill would implement recommendation AFM-5(E) from the Comptroller's
report, e-Texas: Smaller, Smarter, Faster Government.
Creation of a Certified Audit Program in Texas, modeled after a program
currently in use in Florida, could increase sales tax revenue assessed
and collected by the Comptroller. In its first year of operation in
Florida, the Certified Audit Program resulted in auditor time saved
equivalent to the work of more than five additional staff auditors.
Based on the Florida return on investment, it was assumed that Texas
could achieve similar results. In terms of fiscal impact, it was
estimated that Texas would garner the equivalent of five additional staff
auditors. On average, Comptroller staff auditors spend approximately
1,456 hours per year actively working taxpayer audits. This estimate
assumes that additional revenue would be generated at the average rate
for Priority 2 Audit Accounts or $516 per hour.
The costs to administer the program would include one Project Manager at
$75,000 per year; one training specialist at $50,000 per year; a
one-time cost to design, develop, and implement the Certified Audit
training Program, $200,000; and ongoing administrative costs, including
travel and training, $50,000 per year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, SM