FISCAL NOTE

This bill contains an appropriation of $14,000,000 from the GENERAL FUND to the Department of Revenue. This appropriation is effective for the period beginning July 1, 2005 and ending June 30, 2007.

	FY 2006	FY 2007	FY 2008
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Decrease:
GENERAL FUND	7,750,000	7,930,000	0

Source of revenue decrease: 2-year sales and use tax exemption on the sale of gas, electricity or heat for domestic consumption.

Assumptions:

The above General Fund decrease represents the state share of the exemption (69 percent of the statewide 4 percent sales and use tax).

Local governments will remain whole thanks to the appropriation in the bill. The total local government revenue decrease is estimated at $6,870,000 in FY 2006 and $7,030,000 in FY 2007 (including the local share of the statewide 4 percent sales and use tax plus county local option taxes). Revenue decrease in local option taxes estimated based on proportion that FY 2004 local option taxes bear to total.

Estimates derived from calendar year 2003 utility information taken from annual utility reports filed with the Public Service Commission, based on revenues reported by utilities under the "residential" classification.

The calendar year 2003 figures were adjusted by percentage increases for sales and use taxes projected in the October 2004 CREG forecast.

This exemption is effective for the period July 1, 2005 through June 30, 2007.

Prepared by: Dean Temte, LSO Phone: 777-7881

(Information provided by Steve Oxley, PSC; phone 777-7427:

Dan Noble, Dept. of Revenue; phone 777-5220)