LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 1, 2001 TO: Honorable Ron Wilson, Chair, House Committee on Licensing & Administrative Procedures FROM: John Keel, Director, Legislative Budget Board IN RE: HB2479 by Danburg (Relating to the regulation of amusement redemption machines.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2479, As Introduced: positive impact of $7,439,088 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. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $3,354,834 * * 2003 4,084,254 * * 2004 4,284,786 * * 2005 4,404,786 * * 2006 4,484,786 * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Probable Change in Number of * * Year Savings/(Cost) from Savings/(Cost) from State Employees from * * General Revenue Fund Foundation School FY 2001 * * 0001 Fund * * 0193 * * 2002 $3,096,125 $258,709 7.0 * * 2003 3,683,190 401,064 7.0 * * 2004 3,863,589 421,197 7.0 * * 2005 3,971,589 433,197 7.0 * * 2006 4,043,589 441,197 7.0 * ************************************************************************** Technology Impact The Comptroller's office estimates a one-time technology cost of $445,617 for programming, developing, and implementing an automated system to regulate amusement redemption machines. Fiscal Analysis The bill would increase the tax on amusement redemption machines from $60 per machine to $120 per machine and would increase an operator's business license fee for amusement redemption machines from $200 to $2,000. The bill would also limit the number of amusement redemption machines in a single location to five except on premises that conduct bingo games where the limit would be no more than 30. Methodology According to the Comptroller's office, there are currently an estimated 45,000 amusement redemption machines in Texas that would be affected by the bill. The Comptroller's office anticipates this number to decrease to approximately 37,000 should the bill pass. The Comptroller's office also anticipates a decrease by the same proportion in the number of licensed operators should the bill pass. Amusement redemption machine tax revenues are apportioned 75 percent to the General Revenue Fund and 25 percent to the Foundation School Fund. The Comptroller's office anticipates that the doubling of the fee per machine and the ten-fold increase in the license fee for operators would result in an increase of approximately $3.6 million in 2002 to the General Revenue Fund and an increase of approximately $440,000 in 2002 to the Foundation School Fund. According to the Comptroller's office, the number of amusement redemption machines and licensed operators would increase slightly each year thereafter. The Comptroller's office estimates that it would need an additional five enforcement officers in order to handle the increased workload in conducting compliance investigations on all amusement redemption machine applicants and for every additional and duplicate decal request to ensure permit requirements were met. The Comptroller's office also estimates it would need two additional accounts examiners in order to handle the increased workload in file maintenance activities. According to the Comptroller, the seven additional FTEs would cost approximately $236,000 each fiscal year. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 362 Texas Lottery Commission, 304 Comptroller of Public Accounts LBB Staff: JK, SD, JC, RT