LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION

April 19, 2009

TO:	Honorable Rene Oliveira, Chair, House Committee on Ways & Means
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB2593 by Thompson (Relating to the definition of a taxable entity.), As Introduced

The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $729,000 for the 2010-11 biennium.  Any loss to the Property Tax Relief Fund will have to be made up with General Revenue of the same amount to fund property tax relief.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2010	$0
2011	$0
2012	$0
2013	$0
2014	$0

All Funds, Five-Year Impact:

Fiscal Year	Probable Revenue Gain/(Loss) from Property Tax Relief Fund 304
2010	($360,000)
2011	($369,000)
2012	($381,000)
2013	($397,000)
2014	($413,000)

Fiscal Analysis

The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax.

The bill would add to the list of entities that are not taxable entities Subchapter S Corporations under the Internal Revenue Code that is 100 percent owed by an Employee Stock Ownership Plan (ESOP).

The bill would take effect September 1, 2009.

Methodology

The estimated fiscal impact is based on information from the ESOP Association, the Internal Revenue Service, and on 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, MN, SD, SM