LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 2, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1953 by Longoria (Relating to exempting renewable
energy devices from the sales and use tax.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1953, As Introduced: a negative impact of $(16,162,000) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(14,286,000) *
* 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 $(608,000) $0 $0 $0 *
* 2002 (7,610,000) (1,374,000) (530,000) (163,000) *
* 2003 (7,944,000) (1,434,000) (553,000) (170,000) *
* 2004 (8,294,000) (1,498,000) (578,000) (177,000) *
* 2005 (8,661,000) (1,564,000) (603,000) (185,000) *
* 2006 (9,046,000) (1,633,000) (630,000) (193,000) *
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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 $(6,342,000) $(1,031,000) $(398,000) $(122,000) *
* 2003 (7,944,000) (1,434,000) (553,000) (170,000) *
* 2004 (8,294,000) (1,498,000) (578,000) (177,000) *
* 2005 (8,661,000) (1,564,000) (603,000) (185,000) *
* 2006 (9,046,000) (1,633,000) (630,000) (193,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to define "renewable
energy" and "renewable energy device." The sale or use of a renewable
energy device, including its component parts and repair or replacement
parts, would be exempted from the state sales and use tax.
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 the sale of renewable energy devices were gathered from several
sources, including the Energy Information Administration. Sales were
adjusted to reflect only Texas, multiplied by the state sales tax rate,
adjusted for potential effective dates of July 1, 2001 and October 1,
2001, and extrapolated through 2006. The fiscal impacts on units of
local government were estimated proportionally.
Note: Currently, renewable energy devices purchased to generate
electricity for sale are exempt from the state sales and use tax as
manufacturing equipment.
Local Government Impact
Local units of government would have a corresponding fiscal impact from
sales tax revenues, as indicated in the tables above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, SM