LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 4, 2001
TO: Honorable Robert Junell, Chair, House Committee on
Appropriations
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB877 by Flores (Relating to the benefits provided to
the surviving spouse and minor children of a peace
officer killed in the line of duty.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB877, As Introduced: impact of $0 through the biennium ending *
* August 31, 2003. *
* *
* 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 *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year New General Revenue Dedicated - from New General Revenue *
* Peace Officer Survivors Dedicated - Peace Officer *
* Survivors *
* 2002 $(53,445) $548,000 *
* 2003 (87,465) 572,000 *
* 2004 (121,485) 598,000 *
* 2005 (155,505) 625,000 *
* 2006 (189,525) 653,000 *
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Fiscal Analysis
The bill amends Chapter 615, Government Code to allow for a monthly
payment to the surviving spouse of a peace officer of the state or a
political subdivision who was killed in the line of duty and who had not
qualified for an annuity under an employees' retirement plan. The bill
also provides for funeral expenses of the deceased officer to the
surviving spouse or, if a surviving spouse does not exist, to the
surviving minor children. The bill would create the peace officers
survivors account as a dedicated account in the general revenue fund.
This account would be funded by a sales tax rate of one percent of the
price of bullets sold to be used for payment of benefits provided for in
the bill. The Act takes effect September 1, 2001, and applies to deaths
on or after that date. The Employees Retirement System (ERS) would be
responsible for administering the new benefit.
The bill would amend Title 2 of the Tax Code to create a new Chapter 162,
entitled "The Bullet Tax." The bill would impose a tax on each sale of
a bullet in this state. The tax rate would be 1 percent of the sales
price of a bullet, and the tax would be imposed in addition to the sales
tax imposed under Chapter 151. The provisions of Chapter 151 would
govern the administration and collection of the new tax.
The bill would create the new, dedicated GR Account - Peace Officer
Survivors. The Comptroller would allocate bullet tax revenues, other
than penalties and interest, to the credit of the new account. Money in
the account only could be used to pay specified benefits to spouses or
surviving minor children of slain peace officers. Any unobligated amount
in the account in excess of $5 million at the end of each fiscal year
would be transferred to the undedicated part of the General Revenue Fund
0001.
The bill would take effect September 1, 2001.
Methodology
The cost for providing the annuity benefits is estimated to be $19,845 in
fiscal year 2002, increasing to $155,925 in fiscal year 2006 as the
number of survivors receiving benefits increases each year. ERS
estimates that an average of 6 deaths would occur each year that would
result in benefit payments under this legislation, and that the annual
cost for providing a full year of annuity benefits would be $5,670 per
survivor, and that the deaths would be evenly spaced throughout the year.
The average cost for each funeral is estimated to be $5,600 per funeral,
based on information from the Funeral Services Commission, resulting in
an annual cost for funeral expenses of $33,600.
The Comptroller of Public Accounts estimated that sales tax revenue from
the sale of bullets would be $548,000 in fiscal year 2002, increasing to
$653,000 by fiscal year 2006. Data on the sale of bullets were gathered
from several sources, including the National Sporting Goods Association.
National sales data were adjusted for sales in Texas, multiplied by the
proposed tax rate, and adjusted for the effective date to determine the
potential fiscal impact. The bill does not provide a definition for the
term "bullet." The Comptroller assumed that all bullets, cartridges,
and shells intended to be used with firearms would be subject to the
imposition of the tax.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 327 Employees Retirement System, 304 Comptroller
of Public Accounts
LBB Staff: JK, SD, SC, SM