LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 11, 1997
TO: Honorable Judith Zaffirini, Chair IN RE: Senate Bill No. 55
Committee on Health & Human Services By: Zaffirini
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB55 ( Relating
to the regulation of the sale or distribution of tobacco products,
providing penalties.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB55-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(1,417,440) 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
require the Texas Department of Health to conduct unannounced
inspections of locations where cigarettes or tobacco products
are sold, to establish administrative systems to support the
provisions of this bill, to develop tobacco use prevention programs
for minors in violation of the bill, and to develop and implement
a public awareness campaign.
The bill would give Comptroller
staff the authority to seize, seal, or disable tobacco vending
machines in violation of the provisions of the bill.
The
bill would modify provisions in the Tax Code, raising fees for
businesses in the tobacco industry. A new permit would be required
for retailers. Revenue from the sale of retailer's permits
would be deposited into the General Revenue Fund. The bill
would require appropriations to be made first to the Comptroller
for administration and licensing of retailers. Remaining revenues
could be appropriated to the Department of Health.
The bill
could also generate additional revenue through criminal and
civil fines and administrative penalties.
Methodolgy
The general revenue impact was calculated in four parts. First,
the Comptroller estimates that there would be a decrease in
revenue available from cigarette and tobacco product taxes due
to a restriction of minors' access to tobacco. The Comptroller
estimates this revenue loss to be $1,400,000 in fiscal year
1998, $4,470,000 in fiscal year 1999, $4,558,000 in fiscal year
2000, $5,462,000 in fiscal year 2001, and $5,384,000 in fiscal
year 2002. Second, there would be an increase in revenue relating
to the new retailer's permit. Since the retailer's permits
expire on the last day of May of each even-numbered year, the
revenue impacts from this revenue source are greater in even-numbered
years. Third, there would be an increase in revenue associated
with the increases in other tobacco permit fees. Fourth, as
the Department of Health would be directed to establish reasonable
application and renewal fees for the approval of tobacco use
prevention programs in the amounts necessary to administer this
subchapter, it is assumed that there would be a revenue gain
equal to the cost of developing and administering this activity.
The
administrative costs to the Comptroller are assumed to be $503,695
in fiscal year 1998, and $38,168 in fiscal years 1999 and 2001,
and $50,139 in fiscal years 2000 and 2002, with an increase
of one full-time equivalent. It is estimated that functions
assumed by the Department of Health would cost approximately
$1.4 million in fiscal year 1998 and $1.9 million in each subsequent
year. The Department of Health would increase full-time equivalent
positions by 13.5 in the first year and 22 in subsequent years.
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) from Savings/(Cost) of State
General Revenue from General Employees from
Fund Revenue Fund FY 1997
0001 0001
1998 $5,982,492 ($1,894,132) 14.5
1998 (3,560,508) (1,945,292) 23.0
2000 2,306,492 (1,957,263) 23.0
2001 (4,579,508) (1,945,292) 23.0
2002 948,492 (1,957,263) 23.0
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 $4,088,360
1999 (5,505,800)
2000 349,229
2001 (6,524,800)
2002 (1,008,771)
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: 501 Department of Health
304 Comptroller of Public Accounts
302 Office of the Attorney General
517 Commission on Alcohol and Drug Abuse
LBB Staff: JK ,BB ,KF