LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 16, 1997
TO: Honorable Tom Craddick, Chair IN RE: House Bill No. 3210
Committee on Ways & Means By: Raymond
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB3210 ( Relating
to assistance to certain volunteer fire departments and to the
imposition of a tax to finance that assistance.) this office
has detemined the following:
Biennial Net Impact to General Revenue Funds by HB3210-As Introduced
Implementing the provisions of the bill would result in a net
impact of $(0) to General Revenue Related Funds through the
biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would amend Chapter 614 of the Government Code to create
a rural volunteer fire department assistance program (program)
administered by the Texas Forest Service at Texas A&M University.
The program would assist rural volunteer fire departments in
paying for equipment and training personnel. The bill would
create a new, dedicated Rural Volunteer Fire Department Assistance
Account (account) in the General Revenue Fund 0001.
The bill
would amend Subtitle E, Title 2 of the Tax Code to create Chapter
161 to impose a state fireworks tax of 2 percent on the retail
sale of fireworks. This tax would be in addition to the limited
sales and use tax imposed under Chapter 151 of the Tax Code.
The proposed fireworks sales tax would not apply to a sale
unless the limited sales and use tax also applied to the sale.
The fireworks tax would be administered, imposed, collected,
and enforced in the same manner as the limited sales and use
tax governed by Chapter 151 of the Tax Code. Any change in
the law related to the taxation of the sale of fireworks under
Chapter 151 also would apply to the fireworks tax.
The
fireworks tax would not apply to retail sales of toy cap guns;
model rockets used to propel recoverable aero models; certain
propelling charges; novelty noisemakers; emergency signaling
devices; railway torpedoes; blank cartridges used for either
radio and film productions, athletic ceremonies, or industrial
purposes; or pyrotechnic devices for use by the military.
The
Comptroller would be required to allocate revenues from the
fireworks sales tax to the new account. Penalties and interest
would remain in the General Revenue Fund 0001.
The director
of the Texas Forest Service would be required to prepare and
submit an annual report on the activity, status, and effectiveness
of the new account to the Lieutenant Governor, the Speaker of
the House of Representatives, and the Comptroller before September
1 of each year.
The director could not grant a request for
assistance before September 1, 1998.
The bill would take
effect July 1, 1997 if it received the requisite two-thirds
majority votes in both houses of the Legislature. Otherwise,
it would take effect October 1, 1997.
Methodolgy
The fiscal impacts were estimated from state sales tax collections
for 1994 and 1995 from establishments with the word "fireworks"
in their name. Sales tax collections from fireworks establishments
increased by nearly 15 percent from 1994 to 1995, but this high
rate of increase might not be sustainable through the forecast
horizon. An annual growth rate of 5 percent was used in the
estimates below.
The estimate for fiscal 1998 assumes an
effective date of October 1, 1997. If the bill took effect
July 1, 1997, the estimate for fiscal 1997 would be $50,000,
and the estimate for fiscal 1998 would be $340,000.
The
administrative cost to the Comptroller's Office is not anticipated
to be significant. The fund would be administered by the Texas
Forest Service. The cost to administer the program consists
of salaries and related employee costs for two additional staff.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue Probable Change in Number
Gain/(Loss) to Savings/(Cost) of State
New Rural to New Rural Employees from
Volunteer Fire Volunteer Fire FY 1997
Department Department
Assistance Assistance
Account- GR Account - GR
Dedicated Dedicated - Cost
to the Texas
Forest Service
NEW-DED NEW-DED
1998 $312,000 ($75,550) 2.0
1998 357,000 (69,550) 2.0
2000 375,000 (69,550) 2.0
2001 394,000 (69,550) 2.0
2002 414,000 (69,550) 2.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 0
2000 0
2001 0
2002 0
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No significant fiscal implication to units of local government
is anticipated.
Source: Agencies: 710 Texas A&M University System
304 Comptroller of Public Accounts
LBB Staff: JK ,RR ,SM