LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 25, 2001
TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1346 by Armbrister (Relating to assistance to certain
volunteer fire departments and to the imposition of a tax
to finance that assistance.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1346, As Introduced: impact of $0 to general revenue-related *
* funds through the biennium ending August 31, 2003, regardless of *
* whether the effective date is July 1, 2001 or October 1, 2001. *
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The following table assumes an effective date of July 1, 2001:
All Funds, Five-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 2000 *
* General Revenue Dedicated--- Dedicated--- *
* Dedicated--- Volunteer Fire Volunteer Fire *
* Volunteer Fire Department Department *
* Department Assistance Fund Assistance Fund *
* Assistance Fund for Grants for *
* Administrations *
* 2001 $197,000 $0 $(19,700) 1.0 *
* 2002 413,000 0 (41,300) 1.0 *
* 2003 434,000 (390,600) (43,300) 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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The following table assumes an effective date of October 1, 2001:
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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 *
* Administrations- *
* 2002 $413,000 $0 $(41,300) 1.0 *
* 2003 434,000 (390,600) (43,300) 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 Assistance Program to be administered by
the Texas Forest Service. The program would provide assistance to rural
volunteer fire departments. 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
Assistance Fund, which would consist of money collected under a new
fireworks tax and contributions to the account from any other source.
Money in the account could only 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.
"Fireworks" would be defined as any composition or device that is
designed to produce a visible or audible effect by combustion, explosion,
deflagration, or detonation that is classified as Division 1.4G
explosives by the U.S. Department of Transportation in 49 Code of Federal
Regulations Part 173 as of September 1, 2001. 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 tax rate, adjusted for
the potential effective dates of July 1, 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 FTEs 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, WP, JW