LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 17, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3025  by Chisum (Relating to an exemption from the
               sales and use tax for environment and conservation
               services.), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB3025, As Introduced:  negative impact of $(71,316,000) through      *
*  the biennium ending August 31, 2003.                                  *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2002                        $(33,041,000)  *
          *       2003                         (38,275,000)  *
          *       2004                         (40,953,000)  *
          *       2005                         (43,828,000)  *
          *       2006                         (47,078,000)  *
          ****************************************************
  
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                                                       *
*  2002     $(33,041,000)    $(5,423,000)    $(2,093,000)      $(642,000) *
*  2003      (38,275,000)     (6,911,000)     (2,667,000)       (818,000) *
*  2004      (40,953,000)     (7,394,000)     (2,853,000)       (875,000) *
*  2005      (43,828,000)     (7,914,000)     (3,053,000)       (936,000) *
*  2006      (47,078,000)     (8,500,000)     (3,280,000)     (1,006,000) *
***************************************************************************
  
Fiscal Analysis
  
The bill would amend Chapter 151 of the Tax Code to exempt from the state
sales and use tax:  services involved in the repair, remodeling,
modification, or restoration of an improvement to real property if the
repair, remodeling, modification, or restoration services had been
purchased to meet or exceed the requirements of any statute, ordinance,
order, rule, or regulation of any commission, agency, court, or
political, governmental, or quasi-governmental entity to protect the
environment.

The bill would take effect September 1, 2001.
  
  
Methodology
  
Data on non-residential repair and remodeling services and real property
services were gathered from the U. S. Census Bureau and Comptroller tax
files.  Sales were adjusted to address only those amounts purchased to
meet or exceed environmental regulations to protect the environment,
multiplied by the state sales tax rate, adjusted for effective date, and
extrapolated through 2006.  The fiscal impact on units of local
government was 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