LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 18, 2001
TO: Honorable Rene Oliveira, Chair, House Committee on Ways &
Means
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3394 by Oliveira (Relating to the refund of sales and
use tax paid on tangible personal property that is
exported beyond the territorial limits of the United
States.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3394, As Introduced: negative impact of $(3,814,038) through *
* the biennium ending August 31, 2003. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(2,145,969) *
* 2003 (1,668,069) *
* 2004 (1,668,069) *
* 2005 (1,668,069) *
* 2006 (1,668,069) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 2001 *
* 0001 *
* 2002 $(2,145,969) 53.0 *
* 2003 (1,668,069) 53.0 *
* 2004 (1,668,069) 53.0 *
* 2005 (1,668,069) 53.0 *
* 2006 (1,668,069) 53.0 *
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Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, relating to the refund
of sales and use tax paid on certain property exported out of the
country.
The bill would require the Comptroller to charge an amount, prescribed by
rule, for each transaction to verify that tangible personal property was
exported beyond the territorial limits of the United States. The bill
would eliminate custom broker verification, with the use of Comptroller
export stamps, as documentation for the export of tangible personal
property. Documentation provided by an export verification center could
be shown as proof of export when an exemption from state sales and use
tax for tangible personal property was claimed because property was
exported beyond the territorial limits of the United States.
An "export verification center" would be defined as a location operated
by the Comptroller's Office used for verifying that tangible personal
property was exported beyond the territorial limits of the United States.
Section 151.157 of the Tax Code, relating to the state regulation of
customs brokers, would be repealed.
The bill would take effect January 1, 2002.
Methodology
Export verification centers operated by the Comptroller's Office would
replace customs brokers with respect to the verification of exports for
the purpose of sales tax refunds relating to tangible personal property
exported beyond the territorial limits of the United States.
The proposed system of verification could limit the number of
non-legitimate refunds. It is assumed that an insignificant portion of
these sales for export would be affected. Note: It is estimated that
approximately $60 million in state and local sales and use taxes is
refunded annually to consumers for tangible personal property
legitimately exported from Texas to Mexico.
This cost estimate assumes the Comptroller would operate 10 verification
centers statewide. The centers will be located in Laredo, Hidalgo,
Brownsville, El Paso, Del Rio, Eagle Pass, San Antonio, Dallas, Houston,
and Austin. The Comptroller's Office would require a minimum of 53
FTE s to operate the export verification centers. The increased
workload assumes 2.2 million exports would be verified under the
provisions of the bill. In fiscal year 2000, approximately 2.2 million
stamps were issued to custom brokers for verification purposes.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, SD, WP, SM