LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 29, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1200 by Shapiro (Relating to a franchise tax credit
for contributions to organizations assisting
educationally disadvantaged children.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1200, As Introduced: negative impact of $(8,670,000) 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 (8,670,000) *
* 2004 (10,600,000) *
* 2005 (11,342,000) *
* 2006 (12,159,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) from *
* General Revenue Fund *
* 0001 *
* 2002 $0 *
* 2003 (8,670,000) *
* 2004 (10,600,000) *
* 2005 (11,342,000) *
* 2006 (12,159,000) *
*****************************************************
Fiscal Analysis
The bill amends Chapter 171 of the Tax Code by adding Subchapter S
entitled, "Tax Credit for Contributions to Organizations Assisting
Educationally Disadvantaged Children."
Under provisions of the bill, a corporation could claim a credit against
its franchise tax liability for a contribution to a nonprofit corporation
organized for certain educational purposes. Eligible purposes would
include aid to community colleges and other schools in meeting the needs
of at-risk children by an entity that spent at least 80 percent of its
funds for direct assistance for at-risk children. An "at-risk child"
would be defined as a student at risk of dropping out of school or a
child eligible for the national school lunch program.
The amount of credit available to a taxpayer would be equal to the amount
of the contribution up to a limit. The credit would be limited to not
more than 25 percent of the tax due after any other credits, would be
available only in the reporting period in which the credit was claimed,
and would not be assignable. A corporation would have to apply for the
credit on a form adopted by the Comptroller.
The bill takes effect January 1, 2002. Credits could be claimed only for
contributions made on or after that date.
Methodology
This estimate is based on analyses made by the Comptroller's Office of
the estimated contributions made to organizations in Texas that would
qualify under the bill as assisting educationally disadvantaged
children. This figure was adjusted to reflect only corporations. The
impact for fiscal year 2003 was adjusted to reflect differences in
corporate accounting years.
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