LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 15, 1999
TO: Honorable Ron Wilson, Chair, House Committee on Licensing
& Administrative Procedures
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB124 by Keel (Relating to the promotion of Texas
agricultural products and the sale of wine; creating a
farm winery permit; imposing a tax on the sale of wine;
providing penalties.), As Introduced
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* Two-year Net Impact to General Revenue Related Funds for HB124, As *
* Introduced: positive impact of $0 through the biennium ending *
* August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $0 *
* 2001 0 *
* 2002 0 *
* 2003 0 *
* 2004 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Gain/(Loss) Probable Savings/(Cost) from *
* Year from New - GR Dedicated New - GR Dedicated *
* 2000 $1,083,000 $(1,083,000) *
* 2001 1,190,000 (1,190,000) *
* 2002 1,199,000 (1,199,000) *
* 2003 1,207,000 (1,207,000) *
* 2004 1,216,000 (1,216,000) *
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Technology Impact
None.
Fiscal Analysis
The bill would change the Alcoholic Beverage Code relating to the
promotion, sale, and taxation of wine. The bill would allow current
winery and wine bottler's permits to be consolidated into a new $300 Farm
Winery permit and would create a wholesale tax of $.05 per gallon on
wine sold for resale. The wholesale tax would be collected monthly by
the Texas Alcoholic Beverage Commission (TABC) and could only be
appropriated to the Texas Department of Agriculture (TDA).
The bill would create a new General Revenue-Dedicated Wine Tax Account
and create a new advisory council to advise the TDA on the use of the
funds collected by this new wine tax. Unless the advisory council
advises otherwise, 70 percent of the revenue would be spent for research
and 30 percent would be spent for marketing and promotion.
Methodology
The revenue from the new wine wholesale tax, as projected by the
Comptroller of Public Accounts, was estimated by converting forecasted
wine excise tax revenue into an equivalent number of wine gallons taxed,
which was then multiplied by the proposed five cent per gallon tax rate.
This figure was adjusted for breakage, reporting and collection lags,
and possible consumption and tax evasion effects.
The Comptroller further estimates that there would be no significant
fiscal impact due to the creation of the farm winery permit because it is
equal to the combined fees for the winery and wine bottler's permits.
TABC indicated the bill would have no significant fiscal impact on the
agency due to the commission's ability to increase surcharges and thus
cover the costs of the program.
TDA's response indicated that expenditures would be adjusted to equal
available revenues.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, TH, DE, MF, TT