| TO: | Honorable David Dewhurst, Lieutenant Governor, Senate |
| FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
| IN RE: | SB1570 by Williams (Relating to the rate of interest on certain tax refunds.), As Passed 2nd House |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2006 | $10,051,000 |
| 2007 | $11,726,000 |
| 2008 | $12,045,000 |
| 2009 | $10,945,000 |
| 2010 | $12,473,000 |
| Fiscal Year | Probable Savings from GENERAL REVENUE FUND 1 |
Probable Savings from General Revenue Dedicated - Various |
Probable Savings from Other Funds - Various |
|---|---|---|---|
| 2006 | $10,051,000 | $24,000 | $975,000 |
| 2007 | $11,726,000 | $28,000 | $1,138,000 |
| 2008 | $12,045,000 | $29,000 | $1,168,000 |
| 2009 | $10,945,000 | $27,000 | $1,061,000 |
| 2010 | $12,473,000 | $30,000 | $1,210,000 |
The bill would implement the recommendation entitled Reduce the Interest Rate Paid on Tax Refunds from the Legislative Budget Board's Staff Performance Report, State Government Efficiency and Operations Submitted to the 79th Legislature.
Under current law, the state pays interest on refunds of taxes paid for a report period on or after January 1, 2000. The interest rate is set annually at the prime rate plus one percent.
The bill would change the rate of interest paid on certain tax refunds claimed after September 1, 2005 for any report period due on or after January 1, 2000. The rate would be the lesser of: 1) the prime rate plus one percent, or 2) the annual rate of interest earned on state treasury deposits during December of the previous year.
The bill would take effect September 1, 2005.
| Source Agencies: | 304 Comptroller of Public Accounts
|
| LBB Staff: | JOB, SD, JI, RS
|