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 ************************************************************************** * 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: *************************************************************************** *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