LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 6, 1997
TO: Honorable Steven Wolens, Chair IN RE: Senate Bill No. 55, As Engrossed
Committee on State Affairs By: Zaffirini
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB55 ( Relating
to the regulation of the sale, distribution, and use of tobacco
products; providing penalties.) this office has detemined the
following:
Biennial Net Impact to General Revenue Funds by SB55-As Engrossed FN Revision 1
Implementing the provisions of the bill would result in a net
positive impact of $519,874 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 affect the regulation of the sale of tobacco
products, particularly with regard to limiting access to and
consumption of tobacco products by minors.
The bill would
assign responsibility for enforcement to the Comptroller, in
cooperation with county sheriffs and municipal chiefs of police.
The Comptroller would be authorized to make grants to counties
and municipalities to enforce the provisions of the bill, including
conducting random unannounced inspections to ensure compliance.
Comptroller staff and peace officers would be empowered to seize,
seal, or disable tobacco vending machines in violation of the
bill. The Comptroller would develop and implement a public
awareness campaign to reduce tobacco use by minors. The Comptroller
would prepare an annual report on minors' access to tobacco
for submission to the U.S. Department of Health and Human Services.
The
bill would levy a fee on advertisers, equal to 10 percent of
the gross purchase price of any outdoor advertising of cigarettes
and tobacco products in Texas. Fee revenue would be deposited
into an un-named dedicated account in the General Revenue Fund.
Revenues deposited into this fund may only be appropriated
for enforcement and an education advertising campaign.
The
bill would modify provisions in the Tax Code, raising fees for
businesses in the tobacco industry, and require a fee would
for retailer permits. Revenue from the sale of retailer's permits
would be deposited into the General Revenue Fund. Revenue collected
from the sale of retailer's permits may only be appropriated
to the Comptroller, first for administration of licensing of
retailers, then for administration and enforcement, and finally
for the development of a tobacco use public awareness campaign.
The
bill could also generate additional revenue through criminal
and civil fines and administrative penalties.
Methodolgy
The bill would require a fee of $130 in the 1998-99 biennium
and $230 for the 2000-01 biennium for the Retailer's permit.
There are approximately 44,000 Retailer's permits currently
active, including one for each of the approximately 12,000 cigarette
vending machines in the state.
The Comptroller estimated
the tobacco advertising fee based on an estimated $150.8 million
in national outdoor advertising expenditures for tobacco products
in 1995, adjusted for Texas' share of the expenditures.
The
potential fiscal impact of the bill was estimated by the Comptroller
by first projecting the potential reduction in teen tobacco
use and calculating the resulting loss in tax revenues. Expected
new revenue was added to result in the net revenue figures noted
below.
The Comptroller would incur administrative costs for
increased staff and equipment for the Criminal Investigations
Division and the Legal Division's Hearings sections. It is assumed
that these costs would first be paid from the new, un-named
General Revenue Dedicated Account, with the remainder being
paid from the General Revenue Fund.
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 Revenue Probable Change in Number
Gain/(Loss) from Gain/(Loss) from Savings/(Cost) of State
General Revenue New - GR from New - GR Employees from
Fund Dedicated Dedicated FY 1997
Un-Named Account Un-Named Account
0001 NEW-DED NEW-DED
1998 $4,485,000 $900,000 ($900,000) 32.0
1998 (2,198,000) 1,103,000 (1,103,000) 32.0
2000 4,472,000 1,144,000 (1,144,000) 32.0
2001 (3,199,000) 1,185,000 (1,185,000) 32.0
2002 2,941,000 1,232,000 (1,232,000) 32.0
Fiscal Year Probable
Savings/(Cost)
from General
Revenue Fund
0001
1998
1999 (431,254)
2000 (410,225)
2001 (349,254)
2002 (322,225)
Net Impact on General Revenue Related Funds:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $3,149,128
1999 (2,629,254)
2000 4,061,775
2001 (3,548,254)
2002 2,618,775
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: 304 Comptroller of Public Accounts
LBB Staff: JK ,JD ,BB ,KF