LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
 
April 15, 2009

TO:
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
HB3835 by Hilderbran (Relating to the exclusion of flow-through funds from total revenue for purposes of the franchise tax.), As Introduced



The bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of $900,504,000 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.




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




Fiscal Year Probable Revenue Gain/(Loss) from
Property Tax Relief Fund
304
2010 ($444,692,000)
2011 ($455,812,000)
2012 ($471,770,000)
2013 ($490,646,000)
2014 ($510,277,000)

Fiscal Analysis

The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax, by changing the requirements on taxable entities for excluding from total revenue flow-through funds mandated by contract to be distributed to other entities.

Current law in Section 171.1011(g) contains a list of flow-through funds that could be excluded from total revenue. This bill would delete the list and a clause restricting the revenue exclusion to the listed items. The bill would permit taxable entities to exclude from total revenue all flow-through funds mandated by contract to be distributed to other entities.

The bill would take effect on January 1, 2010, and apply to reports due on or after that date.


Methodology

Information from the Comptroller's franchise tax files for the 2008 report year was used to estimate the fiscal impact of the bill.

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