LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 27, 2015 TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3304 by Darby (Relating to an exemption from the sales and use tax for tangible personal property sold to or used by certain state data center services providers.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB3304, As Introduced: a negative impact of ($10,900,000) through the biennium ending August 31, 2017.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 27, 2015
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3304 by Darby (Relating to an exemption from the sales and use tax for tangible personal property sold to or used by certain state data center services providers.), As Introduced
TO: Honorable Dennis Bonnen, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3304 by Darby (Relating to an exemption from the sales and use tax for tangible personal property sold to or used by certain state data center services providers.), 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
HB3304 by Darby (Relating to an exemption from the sales and use tax for tangible personal property sold to or used by certain state data center services providers.), As Introduced
HB3304 by Darby (Relating to an exemption from the sales and use tax for tangible personal property sold to or used by certain state data center services providers.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3304, As Introduced: a negative impact of ($10,900,000) through the biennium ending August 31, 2017.
Estimated Two-year Net Impact to General Revenue Related Funds for HB3304, As Introduced: a negative impact of ($10,900,000) through the biennium ending August 31, 2017.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($5,400,000) 2017 ($5,500,000) 2018 ($5,600,000) 2019 ($5,700,000) 2020 ($5,800,000)
2016 ($5,400,000)
2017 ($5,500,000)
2018 ($5,600,000)
2019 ($5,700,000)
2020 ($5,800,000)
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 2016 ($5,400,000) ($1,000,000) ($300,000) ($200,000) 2017 ($5,500,000) ($1,000,000) ($300,000) ($200,000) 2018 ($5,600,000) ($1,000,000) ($400,000) ($200,000) 2019 ($5,700,000) ($1,100,000) ($400,000) ($200,000) 2020 ($5,800,000) ($1,100,000) ($400,000) ($200,000)
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 ($5,400,000) ($1,000,000) ($300,000) ($200,000) 2017 ($5,500,000) ($1,000,000) ($300,000) ($200,000) 2018 ($5,600,000) ($1,000,000) ($400,000) ($200,000) 2019 ($5,700,000) ($1,100,000) ($400,000) ($200,000) 2020 ($5,800,000) ($1,100,000) ($400,000) ($200,000)
2016 ($5,400,000) ($1,000,000) ($300,000) ($200,000)
2017 ($5,500,000) ($1,000,000) ($300,000) ($200,000)
2018 ($5,600,000) ($1,000,000) ($400,000) ($200,000)
2019 ($5,700,000) ($1,100,000) ($400,000) ($200,000)
2020 ($5,800,000) ($1,100,000) ($400,000) ($200,000)
Fiscal Analysis
The bill would amend Chapter 151 of the Tax Code, to provide for an exemption from the sales tax of certain tangible personal property (TPP) sold to or used by a state data center services (DCS) provider. New Section 151.3095 would provide that TPP sold to or used by a DCS provider is exempt from tax if it is used by the DCS provider on behalf of a state agency, and is used by the state agency or the DCS provider for services under the DCS program. The bill would define the state data center services (DCS) program as the program operated by the Department of Information Resources (DIR) to provide fully managed server, mainframe, and bulk print and mail services. The bill would define a state DCS provider to mean a person with which DIR contracts to provide hardware, software, tools, or technical staff to state agencies or for state agency use under the DCS program. The bill would take effect September 1, 2015.
Methodology
DIR anticipates that Xerox State and Local Services, formerly known as ACS, would be the primary DCS provider affected by the provisions of this bill. DIR has a multi-year contract with Xerox for the provision of infrastructure services in the areas of mainframes, servers, networks, and data center operations. The estimated sales tax on tangible personal property is based on DIR's estimated annual spending on TPP for Xerox State and Local Services, and an assumed percentage of total contract costs that would be for other TPP purchased by DCS providers including office furniture and supplies, electricity, raised floor systems, telecommunications systems, and other systems necessary for the provision of state data center services.
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