LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 20, 2015 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3049 by Darby (Relating to the sales and use taxation of certain cleaning services in a licensed health care facility.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3049, As Introduced: a negative impact of ($11,260,000) through the biennium ending August 31, 2017, if the bill takes immediate effect; or a negative impact of ($10,930,000) through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 20, 2015
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3049 by Darby (Relating to the sales and use taxation of certain cleaning services in a licensed health care facility.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3049 by Darby (Relating to the sales and use taxation of certain cleaning services in a licensed health care facility.), As Introduced
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB3049 by Darby (Relating to the sales and use taxation of certain cleaning services in a licensed health care facility.), As Introduced
HB3049 by Darby (Relating to the sales and use taxation of certain cleaning services in a licensed health care facility.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3049, As Introduced: a negative impact of ($11,260,000) through the biennium ending August 31, 2017, if the bill takes immediate effect; or a negative impact of ($10,930,000) through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3049, As Introduced: a negative impact of ($11,260,000) through the biennium ending August 31, 2017, if the bill takes immediate effect; or a negative impact of ($10,930,000) through the biennium ending August 31, 2017, if the effective date of the bill is September 1, 2015.
General Revenue-Related Funds, Six-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2015 ($220,000) 2016 ($9,630,000) 2017 ($1,410,000) 2018 ($1,470,000) 2019 ($1,540,000) 2020 ($1,610,000)
2015 ($220,000)
2016 ($9,630,000)
2017 ($1,410,000)
2018 ($1,470,000)
2019 ($1,540,000)
2020 ($1,610,000)
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($9,520,000) 2017 ($1,410,000) 2018 ($1,470,000) 2019 ($1,540,000) 2020 ($1,610,000)
2016 ($9,520,000)
2017 ($1,410,000)
2018 ($1,470,000)
2019 ($1,540,000)
2020 ($1,610,000)
All Funds, Six-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 2015 ($220,000) ($40,000) ($10,000) ($10,000) 2016 ($9,630,000) ($1,780,000) ($610,000) ($330,000) 2017 ($1,410,000) ($260,000) ($90,000) ($50,000) 2018 ($1,470,000) ($260,000) ($90,000) ($50,000) 2019 ($1,540,000) ($280,000) ($100,000) ($50,000) 2020 ($1,610,000) ($300,000) ($100,000) ($50,000) The above table assumes the bill takes effect immediately. The table below assumes the bill takes effect on September 1, 2015. Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2016 ($9,520,000) ($1,750,000) ($600,000) ($320,000) 2017 ($1,410,000) ($260,000) ($90,000) ($50,000) 2018 ($1,470,000) ($270,000) ($90,000) ($50,000) 2019 ($1,540,000) ($280,000) ($100,000) ($50,000) 2020 ($1,610,000) ($300,000) ($100,000) ($50,000) Fiscal Analysis The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes. The bill would add new Subsection (b-3) to Section 151.0048 to exclude the following services from the definition of real property service subject to the sales and use tax: environmental cleaning, disinfection, sanitation, and sterilization of patient care rooms and associated equipment, hallways, and diagnostic or treatment areas where patients or visitors are granted access in a licensed health care facility. The new subsection would not apply to cleaning of administrative offices, shops, or cafeterias inside such facility. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2015. 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. SECTION 2 of the bill includes language asserting that the change in law is a clarification and that prior law is not to be construed otherwise; this language would serve as the basis for refund requests with respect to sales tax paid prior to the effective date of the bill. The estimate for fiscal year 2016 includes a reserve for refunds. Local Government Impact There would be a proportional loss of sales and use tax revenue from local taxing jurisdictions. Source Agencies:304 Comptroller of Public Accounts LBB Staff: UP, KK, SD
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2015 ($220,000) ($40,000) ($10,000) ($10,000) 2016 ($9,630,000) ($1,780,000) ($610,000) ($330,000) 2017 ($1,410,000) ($260,000) ($90,000) ($50,000) 2018 ($1,470,000) ($260,000) ($90,000) ($50,000) 2019 ($1,540,000) ($280,000) ($100,000) ($50,000) 2020 ($1,610,000) ($300,000) ($100,000) ($50,000)
2015 ($220,000) ($40,000) ($10,000) ($10,000)
2016 ($9,630,000) ($1,780,000) ($610,000) ($330,000)
2017 ($1,410,000) ($260,000) ($90,000) ($50,000)
2018 ($1,470,000) ($260,000) ($90,000) ($50,000)
2019 ($1,540,000) ($280,000) ($100,000) ($50,000)
2020 ($1,610,000) ($300,000) ($100,000) ($50,000)
The above table assumes the bill takes effect immediately. The table below assumes the bill takes effect on September 1, 2015.
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2016 ($9,520,000) ($1,750,000) ($600,000) ($320,000) 2017 ($1,410,000) ($260,000) ($90,000) ($50,000) 2018 ($1,470,000) ($270,000) ($90,000) ($50,000) 2019 ($1,540,000) ($280,000) ($100,000) ($50,000) 2020 ($1,610,000) ($300,000) ($100,000) ($50,000) Fiscal Analysis The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes. The bill would add new Subsection (b-3) to Section 151.0048 to exclude the following services from the definition of real property service subject to the sales and use tax: environmental cleaning, disinfection, sanitation, and sterilization of patient care rooms and associated equipment, hallways, and diagnostic or treatment areas where patients or visitors are granted access in a licensed health care facility. The new subsection would not apply to cleaning of administrative offices, shops, or cafeterias inside such facility. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2015. 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. SECTION 2 of the bill includes language asserting that the change in law is a clarification and that prior law is not to be construed otherwise; this language would serve as the basis for refund requests with respect to sales tax paid prior to the effective date of the bill. The estimate for fiscal year 2016 includes a reserve for refunds.
Fiscal Year Probable Revenue (Loss) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties and Special Districts 2016 ($9,520,000) ($1,750,000) ($600,000) ($320,000) 2017 ($1,410,000) ($260,000) ($90,000) ($50,000) 2018 ($1,470,000) ($270,000) ($90,000) ($50,000) 2019 ($1,540,000) ($280,000) ($100,000) ($50,000) 2020 ($1,610,000) ($300,000) ($100,000) ($50,000)
2016 ($9,520,000) ($1,750,000) ($600,000) ($320,000)
2017 ($1,410,000) ($260,000) ($90,000) ($50,000)
2018 ($1,470,000) ($270,000) ($90,000) ($50,000)
2019 ($1,540,000) ($280,000) ($100,000) ($50,000)
2020 ($1,610,000) ($300,000) ($100,000) ($50,000)
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, regarding sales and use taxes. The bill would add new Subsection (b-3) to Section 151.0048 to exclude the following services from the definition of real property service subject to the sales and use tax: environmental cleaning, disinfection, sanitation, and sterilization of patient care rooms and associated equipment, hallways, and diagnostic or treatment areas where patients or visitors are granted access in a licensed health care facility. The new subsection would not apply to cleaning of administrative offices, shops, or cafeterias inside such facility. The bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2015.
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. SECTION 2 of the bill includes language asserting that the change in law is a clarification and that prior law is not to be construed otherwise; this language would serve as the basis for refund requests with respect to sales tax paid prior to the effective date of the bill. The estimate for fiscal year 2016 includes a reserve for refunds.
Local Government Impact
There would be a proportional loss of sales and use tax revenue from local taxing jurisdictions.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD
UP, KK, SD