LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 1, 2001
TO: Honorable Mike Moncrief, Chair, Senate Committee on
Health & Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB833 by Moncrief (Relating to child-care services and
to an exemption from the sales and use tax for certain
equipment purchased or used to provide child-care
services.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB833, As Introduced: negative impact of $(9,545,675) 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 $(4,279,675) *
* 2003 (5,266,000) *
* 2004 (5,505,000) *
* 2005 (5,755,000) *
* 2006 (6,010,000) *
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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 *
* 2002 $(4,279,675) $(683,000) $(263,000) $(81,000) *
* 2003 (5,266,000) (951,000) (367,000) (112,000) *
* 2004 (5,505,000) (994,000) (384,000) (118,000) *
* 2005 (5,755,000) (1,039,000) (401,000) (123,000) *
* 2006 (6,010,000) (1,085,000) (419,000) (128,000) *
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* Fiscal Year Probable Savings/(Cost) from *
* Federal Funds - Federal *
* 0555 *
* 2002 $(412,125) *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
*****************************************************
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code to exempt items sold,
leased, or rented to or stored, used or consumed by certain child-care
facilities from the sales tax if the items were used in the provision of
child-care services.
A child-care facility would qualify for the exemption if at least 25
percent of the children receiving child-care services at the facility
were from families with a household income not more than 85 percent of
the State median income, adjusted for family size. For the purposes of
making this calculation, the facility could not include children whose
child-care costs were subsidized by federal child-care development funds.
A child-care facility would have to provide the seller an exemption
certificate that certified in writing to the seller that the facility
qualified for the exemption.
The bill would amend the Human Resources Code to require the Department
of Protective and Regulatory Services to conduct a statewide assessment
of the need for child-care services. Training in specific areas for
day-care center or group day-care home employees would be required, as
would the creation of an inspection checklist to be used during
inspections of certain child-care facilities.
The bill would amend the Education Code to allow a parent to designate a
child-care facility (instead of the child's residence) as the regular
location for purposes of obtaining transportation to and from the child's
school. The Commissioner of Education could not reduce allotments to
which a district or county was entitled because the district or county
provided transportation for an eligible student to and from a child-care
facility instead of the student's residence, if the transportation was
provided within the approved routes of the district or county for the
student's school.
The provisions of the bill relating to the sales and use tax exemption
would take effect October 1, 2001. The remaining provisions of the bill
would take effect September 1, 2001.
Methodology
Concerning the sales tax provisions, data on expenses of child-care
facilities were gathered from the U. S. Census Bureau and adjusted to
reflect only those purchases and uses made by eligible facilities of
taxable items. The taxable amounts were multiplied by the state sales
tax rate, adjusted for an effective data of October 1, 2001, and
extrapolated through 2006. The fiscal impact on units of local
government were estimated proportionally.
The Department of Protective and Regulatory Services indicates that to
conduct a statewide assessment of the need for child-care services and to
create an checklist to be used during inspections of certain child-care
facilities would result in a one-time cost to the department of $490,800
in fiscal year 2002, $412,125 from federal funds and the remainder from
general revenue.
The Texas Education Agency (TEA) indicates that although the additional
mileage could affect a district's reimbursement rate, the net impact of
this change in law would be minimal. Therefore, TEA indicates there
would be no significant fiscal impact to the foundation school program
from the provisions of the bill.
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: 530 Department of Protective and Regulatory
Services, 304 Comptroller of Public Accounts, 701
Texas Education Agency
LBB Staff: JK, HD, WP, SM