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Relating to data matching with financial institutions to facilitate the collection of certain delinquent tax liabilities.
Estimated Two-year Net Impact to General Revenue Related Funds for HB 1258, As Engrossed: a positive impact of $38,480,000 through the biennium ending August 31, 2023.
Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $1,530,000 for the 2022-23 biennium. Any gain to the Property Tax Relief Fund will result in an equal amount of savings to the General Revenue for funding the Foundation School Program.
HB 1258 would require financial institutions to exchange data with the Comptroller every quarter to facilitate matching the names of delinquent taxpayers with the names of their account holders. They would be required to either submit a list of all of their open accounts or a list of accounts matched with an inquiry by the Comptroller. If enacted, the Comptroller would be permitted to contract with a third party to facilitate the data match requests.
HB 1258 includes certain limitations on this process. The Comptroller would be limited to one data match request per quarter and have to make their requests compatible with the institution’s data processing system. If enacted, financial institutions would not be permitted to notify their account holders about requests. Both parties would be required to return or destroy any information obtained after the data match is completed and financial institutions would not be liable for disclosing account information.
Texas Action opposes HB 1258 as it stands because it would require financial institutions to submit account data with the state every calendar quarter. While enforcing tax laws is well within the legitimate powers of the state, this requirement is an unnecessary burden on private financial institutions. We would be neutral on HB 1258 if institutions were only required to comply with specific data requests from the Comptroller.