LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 27, 2001
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3279  by Oliveira (Relating to exempting certain sewing
               notions from the sales and use tax for a limited time.),
               As Introduced
  
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*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB3279, As Introduced: a negative impact of $(643,000) through the    *
*  biennium ending August 31, 2003, if the effective date of the bill    *
*  is July 1, 2001; and a negative impact of $(374,000) through the      *
*  biennium ending August 31, 2003, if the effective date of the bill    *
*  is October 1, 2001.                                                   *
**************************************************************************
  
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         $(96,000)              $0              $0              $0 *
*  2002         (271,000)        (49,000)        (19,000)         (6,000) *
*  2003         (276,000)        (50,000)        (19,000)         (6,000) *
*  2004         (282,000)        (51,000)        (20,000)         (6,000) *
*  2005         (288,000)        (52,000)        (20,000)         (6,000) *
*  2006         (293,000)        (53,000)        (20,000)         (6,000) *
***************************************************************************
  
The following table assumes an effective date of October 1, 2001.
  
***************************************************************************
*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         $(98,000)              $0              $0              $0 *
*  2003         (276,000)        (50,000)        (19,000)         (6,000) *
*  2004         (282,000)        (51,000)        (20,000)         (6,000) *
*  2005         (288,000)        (52,000)        (20,000)         (6,000) *
*  2006         (293,000)        (53,000)        (20,000)         (6,000) *
***************************************************************************
  
Fiscal Analysis
  
The bill would amend Chapter 151 of the Tax Code to exempt sewing notions
from the state sales and use tax during the current sales tax holiday
period if the sales price of the sewing notion were less than $50.

The bill would take effect July 1, 2001 if 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 sewing notions - assumed, for the purposes of this
analysis, to be items such as cloth, thread, and other such articles -
were obtained from public and private sources, including the U.S. Census
Bureau and Comptroller tax files.  The data were adjusted for the
appropriate price range and time period, 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