LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 11, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3667 by Cook (Relating to insurance for, and a
fireworks sales tax for the support of, certain volunteer
fire departments.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3667, As Engrossed: 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, Six-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2001 $0 *
* 2002 0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Six-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Revenue Savings/(Cost) Savings/(Cost) Number of State *
* Gain/(Loss) from New from New Employees from *
* from New General Revenue General Revenue FY 2001 *
* General Revenue Dedicated--- Dedicated--- *
* Dedicated--- Volunteer Fire Volunteer Fire *
* Volunteer Fire Department Department *
* Department Assistance Fund Assistance Fund *
* Assistance Fund for Grants for *
* Administration *
* 2001 $197,000 $0 $(19,700) 1.0 *
* 2002 413,000 0 (41,300) 1.0 *
* 2003 434,000 (390,600) (43,400) 1.0 *
* 2004 456,000 (410,400) (45,600) 1.0 *
* 2005 479,000 (431,100) (47,900) 1.0 *
* 2006 503,000 (452,700) (50,300) 1.0 *
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Fiscal Analysis
The bill would amend Chapter 614 of the Government Code to create the
Rural Volunteer Fire Department Insurance Program to be administered by
the Texas Forest Service.
The program would assist rural volunteer fire departments in paying for
worker's compensation and accidental death and disability insurance. The
director of the Texas Forest Service would appoint an advisory committee
to advise concerning program administration.
The bill would create GR Account--Rural Volunteer Fire Department
Insurance, which would consist of money collected under a new fireworks
tax and contributions to the account from any other source. Money in the
account only could be used to administer the program.
The bill would amend the Tax Code to add Chapter 161, which would impose
a state fireworks tax of 2 percent on the retail sale of fireworks. The
fireworks tax would be in addition to the limited sales and use tax
imposed under Chapter 151 of the Tax Code.
The tax would not apply to a sale unless the limited sales and use tax
also applied to the sale. The tax would be administered, imposed,
collected, and enforced in the same manner as the limited sales and use
tax governed by Chapter 151 of the Tax Code. Any change in the law
related to the taxation of the sale of fireworks under Chapter 151 also
would apply to the fireworks tax.
The Comptroller would be required to allocate revenues from the fireworks
tax to the new account. Penalties and interest would remain in the
General Revenue Fund 0001.
The director of the Texas Forest Service could not grant a request for
assistance before September 1, 2002.
The bill would take effect July 1, 2001, if it received the requisite
two-thirds majority votes in both houses of the Legislature. Otherwise,
it would take effect October 1, 2001.
Methodology
Data on the sale of fireworks were gathered from Comptroller tax files.
Sales were multiplied by the proposed 2 percent (including January 1,
2002 and July 4, 2002) tax rate, adjusted for the potential effective
dates of July 1, 2001 (including July 4, 2001) and October 1, 2001, and
extrapolated through 2006.
The Texas Forest Service estimates 10 percent of the volunteer fire
department assistance funds generated by the fireworks sales tax will be
used to pay the salaries, benefits and operating costs needed to
administer the program. The proposed legislation would allow the Texas
Forest Service to hire additional FTE's to administer the program.
Given Comptroller estimates, 10 percent of the above amounts would fund
at best a single FTE.
Local Government Impact
Upon successful grant petition of the Texas Forest Service, local
volunteer fire departments will gain additional funding resources for
equipment costs and personnel training out of the volunteer fire
department assistance fund.
Source Agencies: 576 Texas Forest Service, 304 Comptroller of
Public Accounts
LBB Staff: JK, SD, CL, JW