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:  HB2371 by Gutierrez (relating to exempting diapers from
               the sales tax), Committee Report 1st House, Substituted
  
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*  Estimated Two-Year Net Impact to General Revenue Related Fundsfor     *
*  HB2371, Committee Report 1st House, Substituted:  negative impact     *
*  of $(63,526,000) through the biennium ending August 31, 2001, if      *
*  the effective date is July 1, 1999; and a negative impact of          *
*  $(56,009,000) through the biennium ending August 31, 2001, if the     *
*  effective date is October 1, 1999.                                    *
**************************************************************************
  

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      $(2,477,000)              $0              $0              $0 *
*  2000      (30,242,000)     (5,275,000)     (2,071,000)       (639,000) *
*  2001      (30,807,000)     (5,373,000)     (2,110,000)       (651,000) *
*  2002      (31,399,000)     (5,477,000)     (2,150,000)       (663,000) *
*  2003      (31,974,000)     (5,577,000)     (2,190,000)       (676,000) *
*  2004      (32,540,000)     (5,676,000)     (2,229,000)       (687,000) *
***************************************************************************
  

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     $(25,202,000)    $(3,956,000)    $(1,553,000)      $(479,000) *
*  2001      (30,807,000)     (5,373,000)     (2,110,000)       (651,000) *
*  2002      (31,399,000)     (5,477,000)     (2,150,000)       (663,000) *
*  2003      (31,974,000)     (5,577,000)     (2,190,000)       (676,000) *
*  2004      (32,540,000)     (5,676,000)     (2,229,000)       (687,000) *
***************************************************************************
  
Fiscal Analysis
  
The bill would amend Chapter 151 of the Tax Code to exempt diapers from
taxation unless sold or used by a diaper service.
  
  
Methodology
  
To estimate the fiscal implications of the bill, diaper sales data were
gathered from a variety of sources.  The data were adjusted to reflect
Texas sales only, multiplied by the state sales tax rate, 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.  Fiscal impacts on
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, BR, SM