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: HB3609 by Davis, Yvonne (Relating to the sales and use tax exemption for gas and electricity.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3609, As Introduced: negative impact of $(3,913,000) 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 $(1,833,000) * * 2003 (2,080,000) * * 2004 (2,163,000) * * 2005 (2,250,000) * * 2006 (2,340,000) * **************************************************** 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 $(1,833,000) $(301,000) $(116,000) $(36,000) * * 2003 (2,080,000) (376,000) (145,000) (44,000) * * 2004 (2,163,000) (391,000) (151,000) (46,000) * * 2005 (2,250,000) (406,000) (157,000) (48,000) * * 2006 (2,340,000) (422,000) (163,000) (50,000) * *************************************************************************** Fiscal Analysis The bill would amend Chapter 151 of the Tax Code to exempt natural gas or electricity from the state sales and use tax in certain circumstances. If gas or electricity were sold to an owner of a building or a management company that directly passed the actual charge for that gas or electricity to a tenant for use directly in providing, under contracts with or on behalf of the United States government or foreign governments, defense or intelligence-related services, the charge would be exempt from taxation. The bill would take effect September 1, 2001. Methodology Data on the sale of gas and electricity were gathered from Comptroller tax files. Sales were adjusted for the specified uses, multiplied by the state sales tax rate, adjusted for the effective date, and extrapolated through 2006. The fiscal impact on units of local government were estimated proportionally. Note: In the bill, the word "subsection" (p. 2, line 3) does not refer to a specific part of this bill or the Tax Code. For the purposes of this analysis, it was interpreted as, "in subsection (a)(8)." 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