LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
                                Revision 1
  
                              April 14, 1999
  
  
          TO:  Honorable Rene Oliveira, Chair, House Committee on Ways &
               Means
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3600 by McClendon (relating to the taxation of small
               quantities of cigarettes imported into this state from a
               foreign country), As Introduced
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB3600, As Introduced:  positive impact of $4,000,000 through the     *
*  biennium ending August 31, 2001.                                      *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Net Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                           $1,930,000  *
          *       2001                            2,070,000  *
          *       2002                            2,060,000  *
          *       2003                            2,090,000  *
          *       2004                            2,110,000  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
         *****************************************************
         * Fiscal Year    Probable Revenue Gain/(Loss) from   *
         *                      General Revenue Fund          *
         *                              0001                  *
         *      2000                               $1,930,000 *
         *      2001                                2,070,000 *
         *      2002                                2,060,000 *
         *      2003                                2,090,000 *
         *      2004                                2,110,000 *
         *****************************************************
  
Fiscal Analysis
  
The bill would amend the tax law regarding the importation of cigarettes
into Texas by individuals for personal consumption.  Under current law,
the importation of 200 or fewer cigarettes (a 10-package carton) is not
subject to the state's cigarette excise tax.  This bill would continue
that provision for cigarettes imported from other states, but not for
cigarettes imported from a foreign country.

The bill would take effect September 1, 1999 and only would apply to
cigarettes imported into the state on or after that date.
  
  
Methodology
  
This estimate is based upon Comptroller analysis of information provided
by the Texas Alcoholic Beverage Commission (TABC).

At major Texas-Mexico border crossings, the TABC maintains offices where
it collects taxes and fees due from personally-imported alcoholic
beverages and cigarettes.  In March, 1999, TABC surveyed adults entering
Texas at four border crossings, asking adults if they were smokers and
if they were importing cigarettes.  The results of the survey were used
to adjust previous estimates of tax revenue anticipated to be generated
by this legislation.
  
  
Local Government Impact
  
No significant fiscal implication to units of local government is
anticipated.
  
  
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, BB, BR, CT