Legislative leaders reached agreement just as the clock struck midnight Sunday on a proposal to phase out the franchise tax businesses pay on their capital and to cut personal income taxes.

The tax cut plan will have a limited impact on only $3 million for the upcoming fiscal year, which begins July 1. Most state agencies and the universities and community colleges already are facing budget cuts in the upcoming fiscal year because of ongoing sluggish tax collections.

Legislative leaders worked up to the midnight deadline to finalize the tax cut plan, which will have to be passed on the floor of the House and Senate Monday to stay within the constitutionally mandated deadlines for the 2016 session, which is scheduled to end April 24.

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