LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
 
April 15, 2013

TO:
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB1475 by Hilderbran (relating to the exclusion of certain flow-through payments related to petroleum and mineral interests in determining total revenue for purposes of the franchise tax.), Committee Report 1st House, Substituted



Estimated Two-year Net Impact to General Revenue Related Funds for HB1475, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2015.

Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($1,827,000) for the 2014-15 biennium.  Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2014 $0
2015 $0
2016 $0
2017 $0
2018 $0




Fiscal Year Probable Revenue (Loss) from
Property Tax Relief Fund
304
2014 ($912,000)
2015 ($915,000)
2016 ($933,000)
2017 ($916,000)
2018 ($909,000)

Fiscal Analysis

The bill would amend Chapter 171 of the Tax Code, regarding the franchise tax.
 
The bill would add a provision to Section 171.1011(g), which deals with exclusions from total revenue for calculating franchise tax. The bill would provide that a taxable entity primarily engaged in the business of performing landman services would exclude from total revenue subcontracting payments made by the taxable entity to nonemployees for the performance of landman services on behalf of the taxable entity. The bill would provide a definition of "landman services".
 
The bill would take effect on January 1, 2014, and apply to a report due on or after that date.       

Methodology

The estimated fiscal impact is based on franchise tax data for taxable entities that likely use subcontractors for preforming services of a petroleum landman.     

Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
UP, KK, SD