Surprise! New Transparency Requirements for Some Eco Devo Programs. Legislature Not Required.

How did economic development programs end up with new reproting requirements? GASB 77

Which economic development programs will be required to report? The Comptroller points to these programs, with the disclaimer to consult your experts:

• Enterprise Zone Program
• Chapter 313s
• And possibly these too:
  • The Skills Development Fund
  • The Texas Enterprise Fund
  • The Texas Capital Fund Infrastructure Development and Real Estate Programs
  • Franchise tax deductions could trigger GASB 77
  • Local Incentives like Chapters 380, 381, 311, 312
  •  Type A and Type B sales taxes for economic development

What triggers the reporting requirements?

• An agreement
• For a public purpose
• That impacts a tax (not a fee , but specifically a tax)

What is required to reported under GASB 77?

• purpose of the tax break;
• tax being affected;
• dollar amount of taxes;
• the types of commitments made by the recipient;
• provisions for recapturing foregone taxes if the commitments aren’t met; &
• other commitments made by a government in tax abatement agreements, such as the construction of infrastructure assets.

Fiscal Notes November 2016 | TAX INCENTIVES AND GASB 77New Transparency for Tax Breaks