LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 9, 1999
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB209 by Cuellar (relating to exempting the purchase of
certain school supplies from the sales tax), Committee
Report 1st House, Substituted
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* Estimated Two-Year Net Impact to General Revenue Related Fundsfor *
* HB209, Committee Report 1st House, Substituted: a negative impact *
* of $(10,380,000) through the biennium ending August 31, 2001, if *
* the effective date is July 1, 1999; and a negative impact of *
* $(5,844,000) through the biennium ending August 31, 2001, if the *
* effective date is October 1, 1999. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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The following fiscal implications assume an effective date of July 1,
1999.
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to *
* General Revenue Cities Transit Counties/SPDs *
* Fund Authorities *
* 0001 *
* 1999 $(858,000) $0 $0 $0 *
* 2000 (4,597,000) (802,000) (315,000) (97,000) *
* 2001 (4,925,000) (859,000) (337,000) (104,000) *
* 2002 (5,271,000) (919,000) (361,000) (111,000) *
* 2003 (5,614,000) (979,000) (384,000) (119,000) *
* 2004 (6,005,000) (1,047,000) (411,000) (127,000) *
***************************************************************************
The following fiscal implications assume an effective date of October 1,
1999.
***************************************************************************
*Fiscal Probable Probable Probable Probable *
* Year Revenue Revenue Revenue Revenue *
* Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to Gain/(Loss) to *
* General Revenue Cities Transit Counties/SPDs *
* Fund Authorities *
* 0001 *
* 2000 $(919,000) $0 $0 $0 *
* 2001 (4,925,000) (859,000) (337,000) (104,000) *
* 2002 (5,271,000) (919,000) (361,000) (111,000) *
* 2003 (5,614,000) (979,000) (384,000) (119,000) *
* 2004 (6,005,000) (1,047,000) (411,000) (127,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt certain school
supplies from the sales tax.
Items would be exempt if they were required for classroom use by a
student in a public or private elementary or secondary school, on a list
issued by the teacher of the class or the school, having a value of less
than $25, and purchased during the month of August.
Methodology
The fiscal implications of the bill were estimated using data on school
supplies obtained from the U.S. Census Bureau. The amount of total
school supply sales in Texas was multiplied by the state sales tax rate,
adjusted to reflect sales in August, and extrapolated through fiscal
2004. If the bill were to receive a two-thirds vote in each house, it
would take effect July 1, 1999; otherwise, it would take effect October
1, 1999. The fiscal implications for units of local government were
estimated proportionally.
Local Government Impact
Local units of government would have a corresponding fiscal impact from
sales tax revenues, as indicated in the table above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, BB, SM