LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 6, 1999 TO: Honorable Bill Ratliff, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: HB1799 by King, Phil (relating to the assignment or deposit of certain lottery prizes), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1799, As Engrossed: negative impact of $(54,663,000) 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(18,412,000) * * 2001 (36,251,000) * * 2002 (36,793,000) * * 2003 (37,347,000) * * 2004 (37,907,000) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) * * Year from New - GR Account - Texas from Foundation School Fund * * Department of Health State 0193 * * Owned Multi-Categorical * * Teaching Hospital * * 2000 $19,056,000 $(18,412,000) * * 2001 37,537,000 (36,251,000) * * 2002 38,099,000 (36,793,000) * * 2003 38,672,000 (37,347,000) * * 2004 39,252,000 (37,907,000) * *************************************************************************** Fiscal Analysis The bill would amend the Government Code to allow the assignment of prizes and to direct the Texas Lottery Commission to deposit unclaimed lottery prize money to a new Texas Department of Health Owned Multi-categorical Teaching Hospital Account (account). The proceeds of the new account would be used to provide indigent health care. Currently, unclaimed prize money is used to provide additional money to the Lottery Account for prize payments, administrative costs, and transfers to the Foundation School Fund. The bill would take effect September 1, 1999 and only would apply to prizes awarded on or after that date. Methodology A fiscal estimate on the assigned prize administration fee would depend on the number of assignments and the expenses associated with the assignments. This analysis presumes the amount of revenue raised by this fee would be statistically insignificant. Concerning unclaimed prize funds, estimates were based on data obtained from the Texas Lottery Commission on the amount of unclaimed prize money in previous years, adjusted for implementation of the bill's provisions. Currently, the commission is using unclaimed prizes to supplement prizes in various games. To the extent that the lottery games are being operated below the prize cap, there would be larger negative fiscal implications to the Foundation School Fund because of reduced sales. Currently, the lottery is approaching but remains below the prize cap; therefore, a portion of the unclaimed prize money is not effectively being used to increase sales. This would result in an overall gain under this bill. Note: If a separate bill such as HB 844, 76th Legislature, were to repeal or substantially increase the prize cap, the bill would have an overall negative fiscal impact. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 304 Comptroller of Public Accounts, 362 Texas Lottery Commission LBB Staff: JK, BB, BR, WP