LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
 
March 24, 2009

TO:
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
HB791 by Burnam (Relating to the period during which certain energy-efficient products are exempt from the sales tax.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB791, As Introduced: a negative impact of ($6,828,000) through the biennium ending August 31, 2011, if the effective date of the bill is July 1, 2009; or a negative impact of ($4,646,000) through the biennium ending August 31, 2011, if the effective date of the bill is October 1, 2009.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2009 ($2,182,000)
2010 ($2,263,000)
2011 ($2,383,000)
2012 ($4,156,000)
2013 ($3,472,000)
2014 ($2,718,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2010 ($2,263,000)
2011 ($2,383,000)
2012 ($4,156,000)
2013 ($3,472,000)
2014 ($2,718,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
Cities		 Probable Revenue (Loss) from
Transit Authorities		 Probable Revenue (Loss) from
Counties
2009 ($2,182,000) $0 $0 $0
2010 ($2,263,000) ($406,000) ($138,000) ($57,000)
2011 ($2,383,000) ($421,000) ($144,000) ($59,000)
2012 ($4,156,000) ($443,000) ($151,000) ($63,000)
2013 ($3,472,000) ($773,000) ($264,000) ($109,000)
2014 ($2,718,000) ($646,000) ($220,000) ($91,000)

The above table assumes an effective date of July 1, 2009. The table below assumes an effective date of October 1, 2009.



Fiscal Year Probable Revenue Gain/(Loss) from
General Revenue Fund
1 		Probable Revenue Gain/(Loss) from
Cities		 Probable Revenue Gain/(Loss) from
Transit Authorities		 Probable Revenue Gain/(Loss) from
Counties
2010 ($2,263,000) $0 $0 $0
2011 ($2,383,000) ($421,000) ($144,000) ($59,000)
2012 ($4,156,000) ($443,000) ($151,000) ($63,000)
2013 ($3,472,000) ($773,000) ($264,000) ($109,000)
2014 ($2,718,000) ($646,000) ($220,000) ($91,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code to create an additional period for the exemption from the sales tax for certain energy efficient products. Under current law, these specified products are exempt if purchased during a period around Memorial Day. The bill would exempt these products from the sales tax if sold during a period around July 4th.

The bill would take effect July 1, 2009, assuming that it receives the requisite two-thirds majority vote in both houses of the Legislature. Otherwise, it would take effect October 1, 2009.


Methodology

The following analysis was provided by the Comptroller of Public Accounts.

Data on the sale of the eligible energy efficient products were gathered from the U.S. Department of Energy. Sales were adjusted to reflect sales made in Texas, adjusted for the appropriate time period, multiplied by the state sales tax rate, adjusted for potential effective dates of July 1, 2009 and October 1, 2009, and extrapolated through fiscal 2014. The fiscal impacts on units of local government were estimated proportionally.

The length of the exemption period would vary based upon the day of the week that July 4th occurs each year. Based on the language of the bill, the exemption period would last: 3 days in FY 2009, FY 2010, FY 2011, and FY 2014; 4 days in FY 2013; and 5 days in FY 2012.


Local Government Impact

There would be no impact on local governments in the first year of implementation. July sales tax collections, remitted to the Comptroller in August, would not be allocated to the local jurisdictions until the following fiscal year.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, MN, SD, KK