LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

April 3, 2007

TO:	Honorable Jim Keffer, Chair, House Committee on Ways & Means
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB3033 by McClendon (Relating to the dedication of certain sales and use tax and franchise tax revenue to the Texas rail relocation and improvement fund.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB3033, As Introduced: a negative impact of ($16,773,000) through the biennium ending August 31, 2009.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008	($8,244,000)
2009	($8,529,000)
2010	($8,975,000)
2011	($9,447,000)
2012	($9,887,000)

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue Gain/(Loss) from GENERAL REVENUE FUND 1	Probable Revenue Gain/(Loss) from Texas Rail Relocation and Improvement Fund 0306
2008	($8,244,000)	$8,244,000
2009	($8,529,000)	$8,529,000
2010	($8,975,000)	$8,975,000
2011	($9,447,000)	$9,447,000
2012	($9,887,000)	$9,887,000

Fiscal Analysis

The bill would amend Chapters of 151 and 171 of the Tax Code to require sales and use tax and franchise tax paid by rail carriers to be deposited to the credit of the Texas Rail Relocation and Improvement Fund 0306. Under the provisions of the bill, the dedication of rail carrier franchise tax revenues would not affect the amounts deposited to the Property Tax Relief Fund 0304.

The sales tax provisions of the bill would take effect September 1, 2007. The franchise tax provisions would take effect January 1, 2008.

Methodology

The Comptroller of Public Accounts based the fiscal impact to the General Revenue Fund 0001from the sales tax provisions on data on taxable purchases by rail carriers gathered from its tax files. To determine the impact the Comptroller multiplied the data by the state sales tax and extrapolated it through fiscal year 2012.

The Comptroller based the fiscal impact of the franchise tax provisions on the information reports required by HB 3, 79th Legislature, Third Called Session (2006) and data from the Comptroller's franchise tax files.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JOB, CT, SD, EB