Honorable Joan Huffman, Chair, Senate Committee on Finance
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB1211 by Perry (Relating to an exemption from sales and use taxes for certain tangible personal property used in hydraulic fracturing.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1211, As Introduced: a negative impact of ($42,450,000) through the biennium ending August 31, 2027.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($19,240,000)
2027
($23,210,000)
2028
($23,760,000)
2029
($24,110,000)
2030
($24,860,000)
All Funds, Five-Year Impact:
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 & Special Districts
2026
($19,240,000)
($3,520,000)
($1,170,000)
($870,000)
2027
($23,210,000)
($4,250,000)
($1,410,000)
($1,050,000)
2028
($23,760,000)
($4,350,000)
($1,440,000)
($1,070,000)
2029
($24,110,000)
($4,410,000)
($1,460,000)
($1,090,000)
2030
($24,860,000)
($4,550,000)
($1,510,000)
($1,120,000)
Fiscal Analysis
The bill would exempt tangible personal property (TPP) specifically used to process, reuse, or recycle water used for hydraulic fracturing, other than freshwater. Current law states TPP used for the processing, reuse, or recycling of wastewater is exempt.
The bill would define freshwater as water containing less than 1,000 milligrams per liter of total dissolved solids.
The bill would take effect September 1, 2025.
Methodology
Comptroller records regarding the amount of sales tax remitted by companies that provide the water treatment services described by the bill were used as the base for the estimates below, grown by the anticipated gross state product for the mining sector found in the 2026-27 Biennial Revenue Estimate, and adjusted for the effective date of the bill.
Local Government Impact
There would be a corresponding loss of sales and use tax revenue from local taxing jurisdictions displayed in the tables above.