LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 20, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB939 by Hodge (Relating to the application of certain
taxes on persons involved in television, motion picture,
video, and audio productions.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB939, As Introduced: a negative impact of $(2,098,417) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(1,861,750) *
* 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) Gain/(Loss) Gain/(Loss) *
* General Revenue from Hotel from Cities from Counties *
* Fund Occupancy Tax *
* 0001 Deposits *
* Account *
* 5003 *
* 2001 $(148,250) $(750) $(9,000) $(1,000) *
* 2002 (962,667) (9,333) (114,000) (9,000) *
* 2003 (987,500) (9,500) (117,000) (9,000) *
* 2004 (1,014,167) (9,833) (120,000) (9,000) *
* 2005 (1,041,917) (10,083) (123,000) (10,000) *
* 2006 (1,068,667) (10,333) (126,000) (10,000) *
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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) Gain/(Loss) Gain/(Loss) *
* General Revenue from Hotel from Cities from Counties *
* Fund Occupancy Tax *
* 0001 Deposits *
* Account *
* 5003 *
* 2002 $(874,250) $(7,750) $(95,000) $(7,000) *
* 2003 (987,500) (9,500) (117,000) (9,000) *
* 2004 (1,014,167) (9,833) (120,000) (9,000) *
* 2005 (1,041,917) (10,083) (123,000) (10,000) *
* 2006 (1,068,667) (10,333) (126,000) (10,000) *
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Fiscal Analysis
The bill would exempt certain items involved in television, motion
pictures, video, and audio production from the taxes imposed by Chapters
152 and 156 of the Tax Code.
The bill would amend Chapter 152 to exempt from the motor vehicle sales
and use tax the purchase, rental, or use of a motor vehicle in connection
with the commercial production of a television film, commercial,
program, motion picture, or a video or audio recording. The tax that
would have been remitted on the gross rental receipts without this
exemption would be deemed to have been remitted for the purpose of
computing the minimum gross rental receipts tax.
The bill would amend Chapter 156 to exempt from the hotel occupancy tax a
person involved in the commercial production of a television film,
commercial, program, motion picture, or a video or audio recording,
provided that the person had the right to use or possess a room in one
hotel or in a series of two or more hotels for at least 15 consecutive
days.
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 were collected from public and private sources, including the Texas
Film Commission. Motor vehicle rentals were estimated as a percentage of
production budgets and extrapolated using the Consumer Price Index. For
the hotel occupancy tax exemption, the state tax rate was applied to the
estimated budget for lodging by commercial production companies meeting
the 15-day minimum stay requirement. The fiscal impacts for years after
2000 were adjusted using the Consumer Price Index.
Note: The language in the bill does not precisely specify who could
qualify for the exemptions ("in connection with"). As such, the
estimated impact to the motor vehicle sales and use tax was doubled.
The hotel occupancy tax exemption was increased by 25 percent for this
ambiguity.
Local Government Impact
Local units of government would have a corresponding fiscal impact from
motor vehicle sales tax revenues, as indicated in the tables above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, WP, SM