LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 1, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3262 by Williams (Relating to the application of the
sales tax to certain food served to students at
institutions of higher education.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3262, As Introduced: a negative impact of $(32,551,000) through *
* the biennium ending August 31, 2003, if the effective date of the *
* bill is July 1, 2001; and a negative impact of $(28,773,000) *
* 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 $(1,225,000) $0 $0 $0 *
* 2002 (15,321,000) (2,766,000) (1,067,000) (327,000) *
* 2003 (16,005,000) (2,890,000) (1,115,000) (342,000) *
* 2004 (16,733,000) (3,021,000) (1,166,000) (357,000) *
* 2005 (17,491,000) (3,158,000) (1,219,000) (374,000) *
* 2006 (18,268,000) (3,299,000) (1,273,000) (390,000) *
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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 $(12,768,000) $(2,075,000) $(801,000) $(245,000) *
* 2003 (16,005,000) (2,890,000) (1,115,000) (342,000) *
* 2004 (16,733,000) (3,021,000) (1,166,000) (357,000) *
* 2005 (17,491,000) (3,158,000) (1,219,000) (374,000) *
* 2006 (18,268,000) (3,299,000) (1,273,000) (390,000) *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt food products,
meals, soft drinks, and candy for human consumption from the state
limited sales and use tax if the items were served to a student at an
institution of higher education or at a private or independent
institution of higher education as part of a meal plan program provided
by the institution.
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 number of students attending institutions of higher education
and average expenditures for meal plans were gathered from the Texas
Higher Education Coordinating Board and the National Center for
Education Statistics. Students assumed to be purchasing meal plans were
multiplied by the average cost of a plan, 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 impact 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 tables above.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, SM