LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 6, 2011 TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1602 by Seliger (Relating to the exemption from the sales and use tax for certain agricultural items.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1602, As Introduced: a positive impact of $1,175,000 through the biennium ending August 31, 2013. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 6, 2011
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1602 by Seliger (Relating to the exemption from the sales and use tax for certain agricultural items.), As Introduced
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB1602 by Seliger (Relating to the exemption from the sales and use tax for certain agricultural items.), As Introduced
Honorable Steve Ogden, Chair, Senate Committee on Finance
Honorable Steve Ogden, Chair, Senate Committee on Finance
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB1602 by Seliger (Relating to the exemption from the sales and use tax for certain agricultural items.), As Introduced
SB1602 by Seliger (Relating to the exemption from the sales and use tax for certain agricultural items.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1602, As Introduced: a positive impact of $1,175,000 through the biennium ending August 31, 2013. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1602, As Introduced: a positive impact of $1,175,000 through the biennium ending August 31, 2013.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 $212,000 2013 $963,000 2014 $998,000 2015 $1,028,000 2016 $671,000
2012 $212,000
2013 $963,000
2014 $998,000
2015 $1,028,000
2016 $671,000
All Funds, Five-Year Impact: Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2012 $1,081,000 $211,000 $66,000 $37,000 2013 $1,114,000 $217,000 $68,000 $38,000 2014 $1,149,000 $224,000 $70,000 $39,000 2015 $1,179,000 $230,000 $72,000 $40,000 2016 $1,206,000 $235,000 $73,000 $41,000 Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2011 2012 ($869,000) 2.0 2013 ($151,000) 2.0 2014 ($151,000) 2.0 2015 ($151,000) 2.0 2016 ($535,000) 2.0
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2012 $1,081,000 $211,000 $66,000 $37,000 2013 $1,114,000 $217,000 $68,000 $38,000 2014 $1,149,000 $224,000 $70,000 $39,000 2015 $1,179,000 $230,000 $72,000 $40,000 2016 $1,206,000 $235,000 $73,000 $41,000
2012 $1,081,000 $211,000 $66,000 $37,000
2013 $1,114,000 $217,000 $68,000 $38,000
2014 $1,149,000 $224,000 $70,000 $39,000
2015 $1,179,000 $230,000 $72,000 $40,000
2016 $1,206,000 $235,000 $73,000 $41,000
Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 2011 2012 ($869,000) 2.0 2013 ($151,000) 2.0 2014 ($151,000) 2.0 2015 ($151,000) 2.0 2016 ($535,000) 2.0
2012 ($869,000) 2.0
2013 ($151,000) 2.0
2014 ($151,000) 2.0
2015 ($151,000) 2.0
2016 ($535,000) 2.0
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, regarding the sales and use tax. The bill would require purchasers of certain agriculture items who claim a sales and use tax exemption to apply for an exemption number from the Comptroller's Office. The exemption number must be shown on the purchaser's exemption certificate. Persons applying for an exemption number must own or operate a farm or ranch as defined by Section 151.316(c) of the Code. An application for an exemption number must be on a form from the Comptroller's Office, and provide the name and address of the business owned, the type of crops, livestock or other agricultural products sold, and any other data the Comptroller deems necessary. Exemption numbers would be subject to renewal every four years. The bill would take effect September 1, 2011.
Methodology
The bill's provisions requiring an exemption number when purchasing certain agriculture-related items, and claiming an exemption, would deter some of the improper uses of exemption certificates identified by Comptroller's Office auditors. Data on the sales of items affected by the provisions of this bill were gathered from public and private sources; adjusted to represent the share of those sales not related to agriculture use, but using an exemption certificate; and extrapolated through 2016. The CPA estimate an administrative cost that would be necessary to hire 2 FTEs and contract for seasonal employees to administer the agricultural exemption program, web development and programming, and security controls.
The bill's provisions requiring an exemption number when purchasing certain agriculture-related items, and claiming an exemption, would deter some of the improper uses of exemption certificates identified by Comptroller's Office auditors. Data on the sales of items affected by the provisions of this bill were gathered from public and private sources; adjusted to represent the share of those sales not related to agriculture use, but using an exemption certificate; and extrapolated through 2016.
The CPA estimate an administrative cost that would be necessary to hire 2 FTEs and contract for seasonal employees to administer the agricultural exemption program, web development and programming, and security controls.
Technology
There would be a one-time technology cost of $323,000 in fiscal year 2012 for programming and project management.
Local Government Impact
There would be a propotional gain of sales tax revenue to units of local government.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KK, SD
JOB, KK, SD