LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 19, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB836 by Counts (Relating to the application of the
sales and use tax to certain items used in construction
by nonprofit water supply and sewer service
corporations.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB836, As Introduced: a negative impact of $(3,933,000) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(3,475,000) *
* through the biennium ending August 31, 2003, if the effective date *
* of the bill is October 1, 2001. *
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The following table assumes an effective date of July 1, 2001.
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 *
* 2001 $(149,000) $0 $0 $0 *
* 2002 (1,853,000) (335,000) (129,000) (40,000) *
* 2003 (1,931,000) (349,000) (135,000) (41,000) *
* 2004 (2,019,000) (364,000) (141,000) (43,000) *
* 2005 (2,108,000) (381,000) (147,000) (45,000) *
* 2006 (2,203,000) (398,000) (153,000) (47,000) *
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The following table assumes an effective date of October 1, 2001.
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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 *
* 2002 $(1,544,000) $(251,000) $(97,000) $(30,000) *
* 2003 (1,931,000) (349,000) (135,000) (41,000) *
* 2004 (2,019,000) (364,000) (141,000) (43,000) *
* 2005 (2,108,000) (381,000) (147,000) (45,000) *
* 2006 (2,203,000) (398,000) (153,000) (47,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt certain items
consumed by nonprofit water supply corporations.
Items sold, leased, or rented to, or stored, used, or consumed by
non-profit water supply or sewer service corporations would be exempt
from taxation. To be eligible for exemption, the items would have to be
used in connection with construction directly related to the
corporation's purpose. The exemption only would be available to water
supply or sewer service corporations organized under Chapter 67 of the
Water Code and exempted from the payment of taxes under Section 11.30.
The bill would take effect July 1, 2001, assuming that it received the
requisite two-thirds majority votes in both houses of the Legislature.
Otherwise, it would take effect October 1, 2001.
Methodology
Data on materials used by nonprofit water supply corporations and sewer
service corporations, in connection with construction activities, were
obtained from the Texas Rural Water Association. Materials expenditures
were multiplied by the state sales tax rate, adjusted for the potential
effective dates of July 1, 2001 and October 1, 2001, and extrapolated
through fiscal 2006. The 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, SD, SM