LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 15, 2025 TO: 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 toGeneral Revenue Related Funds2026($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) fromGeneral Revenue Fund1 Probable Revenue (Loss) fromCities Probable Revenue (Loss) fromTransit Authorities Probable Revenue (Loss) fromCounties & Special Districts2026($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 AnalysisThe 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.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 15, 2025
TO: 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
TO: 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
Honorable Joan Huffman, Chair, Senate Committee on Finance
Honorable Joan Huffman, Chair, Senate Committee on Finance
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB1211 by Perry (Relating to an exemption from sales and use taxes for certain tangible personal property used in hydraulic fracturing.), As Introduced
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.
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:
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:
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.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD
JMc, KK, SD