LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
 
April 25, 2017

TO:
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
 
FROM:
Ursula Parks, Director, Legislative Budget Board
 
IN RE:
HB3549 by Wray (Relating to a sales and use tax exemption for certain cleaning services performed for a health care facility.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB3549, As Introduced: a negative impact of ($2,170,000) through the biennium ending August 31, 2019, if the bill takes immediate effect; or a negative impact of ($1,880,000) through the biennium ending August 31, 2019, if the effective date of the bill is September 1, 2017.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2017 ($290,000)
2018 $0
2019 ($1,880,000)
2020 ($1,960,000)
2021 ($2,050,000)
2022 ($2,140,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2018 $0
2019 ($1,880,000)
2020 ($1,960,000)
2021 ($2,050,000)
2022 ($2,140,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
State Highway Fund
6 		Probable Revenue (Loss) from
Cities		 Probable Revenue (Loss) from
Transit Authorities
2017 ($290,000) $0 ($60,000) ($20,000)
2018 $0 ($1,800,000) ($350,000) ($120,000)
2019 ($1,880,000) $0 ($360,000) ($120,000)
2020 ($1,960,000) $0 ($380,000) ($130,000)
2021 ($2,050,000) $0 ($390,000) ($140,000)
2022 ($2,140,000) $0 ($410,000) ($140,000)

Fiscal Year Probable Revenue (Loss) from
Counties & Special Districts
2017 ($10,000)
2018 ($60,000)
2019 ($70,000)
2020 ($70,000)
2021 ($70,000)
2022 ($70,000)

The above tables assume the bill takes immediate effect.  The tables below assume the bill takes effect on September 1, 2017.



Fiscal Year Probable (Cost) from
General Revenue Fund
1 		Probable (Cost) from
State Highway Fund
6 		Probable (Cost) from
Cities		 Probable (Cost) from
Transit Authorities
2018 $0 ($1,650,000) ($320,000) ($110,000)
2019 ($1,880,000) $0 ($360,000) ($120,000)
2020 ($1,960,000) $0 ($380,000) ($130,000)
2021 ($2,050,000) $0 ($390,000) ($140,000)
2022 ($2,140,000) $0 ($410,000) ($140,000)

Fiscal Year Probable (Cost) from
Counties & Special Districts
2018 ($60,000)
2019 ($70,000)
2020 ($70,000)
2021 ($70,000)
2022 ($70,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes.
 
The bill would add Section 151.3502 to exempt, when performed for a health care facility, cleaning, janitorial or custodial services performed inside the health care facility, and cleaning patient care equipment, tools or devices.
 
The bill would take effect immediately upon enactment, assuming it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2017.

Methodology

The estimate is based on industry sources and disputed amounts in hearings regarding taxation of specialized cleaning or janitorial services performed for for-profit hospitals and health care facilities.

Pursuant to Proposition 7 (2015), any sales tax collections in excess of $28 billion and less than
$30.5 billion will be deposited into the State Highway Fund. Because total 2018 collections are
projected to fall in that range, the 2018 revenue loss is from the State Highway Fund instead of
General Revenue.

Local Government Impact

There would be a corresponding loss of sales and use tax revenue to local taxing jurisdictions.  The estimates of those losses are displayed in the above tables.


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