LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 12, 1999
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB598 by Gallego (relating to the application of the
sales tax to certain material used to restore a damaged
residence in a disaster area), Committee Report 1st
House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB598, Committee Report 1st House, Substituted: negative impact *
* of $(15,057,000) through the biennium ending August 31, 2001. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(7,440,000) *
* 2001 (7,617,000) *
* 2002 (7,799,000) *
* 2003 (7,986,000) *
* 2004 (8,180,000) *
****************************************************
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/ *
* Fund Authorities Special *
* 0001 Districts *
* 2000 $(7,440,000) $(1,298,000) $(510,000) $(157,000) *
* 2001 (7,617,000) (1,328,000) (522,000) (161,000) *
* 2002 (7,799,000) (1,360,000) (534,000) (165,000) *
* 2003 (7,986,000) (1,393,000) (547,000) (169,000) *
* 2004 (8,180,000) (1,427,000) (560,000) (173,000) *
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Fiscal Analysis
The bill would amend the Tax Code to create a sales tax exemption for
building materials used to restore residence homesteads in areas
designated as disaster areas by the Governor of Texas or the President of
the United States.
To qualify for the exemption, building materials would have to be
incorporated into a residence damaged by disaster within 18 months of
the disaster declaration. The term "restore" would include repair,
restoration, remodeling, cleaning, or modification of an improvement of
a residence homestead.
Methodology
Data on the number of homes damaged and destroyed by declared disasters
and the cost of materials required to repair the damages from disasters
was estimated based on data gathered from the U.S. Bureau of the Census
and the Texas A&M University Real Estate Center. The estimated cost of
materials to restore a residence was multiplied by the number of homes
damaged or destroyed by declared disasters, multiplied by the state sales
tax rate, projected through 2004 based on the consumer price index, and
adjusted for effective date. The fiscal implications for units of local
government were estimated proportionally.
This analysis assumes the number of homes damaged or destroyed by
disasters in fiscal 2000-2004 would equal the average number damaged or
destroyed annually from 1996 through 1998.
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