LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 79TH LEGISLATURE 3rd CALLED SESSION - 2006
 
May 12, 2006

TO:
Honorable Steve Ogden, Chair, Senate Committee on Finance
 
FROM:
John S. O'Brien, Deputy Director, Legislative Budget Board
 
IN RE:
SB48 by Brimer (Relating to authority of certain enterprise projects to receive franchise tax credits for job creation and capital investment.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for SB48, As Introduced: a negative impact of ($5,000,000) through the biennium ending August 31, 2007.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2007 ($5,000,000)
2008 ($5,700,000)
2009 ($6,300,000)
2010 ($6,900,000)
2011 ($7,600,000)




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1
2007 ($5,000,000)
2008 ($5,700,000)
2009 ($6,300,000)
2010 ($6,900,000)
2011 ($7,600,000)

Fiscal Analysis

The bill would provide franchise tax credits for certain businesses for job creation and capital investment activity. In order to qualify for the credit the business would have to be subject to the franchise tax as it existed on December 31, 2004, to have been approved as a triple jumbo
enterprise project between September 1, 2004, and November 30, 2004, and not
be located in an enterprise zone.

An enterprise project that is eligible may establish a credit equal to 25 percent of the total wages and salaries paid or to be paid by the enterprise project for qualifying  jobs created during the period beginning on the date the project is designated as an enterprise project through December 31, 2009.

The total credit claimed may not exceed 50 percent of the amount of franchise tax due for the report before any other applicable tax credits. 

If an enterprise project is eligible for a credit that exceeds these limitations, the enterprise project may carry the unused credit forward for not more than five consecutive reports. 


Methodology

This fiscal note is based upon analysis provided by the Comptroller's Office.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, SD, CT