LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 21, 2001 TO: Honorable Rodney Ellis, Chair, Senate Committee on Finance FROM: John Keel, Director, Legislative Budget Board IN RE: SB1423 by Brown, J. E. "Buster" (Relating to the sale and assignment of all or a portion of the tobacco settlement revenues.), As Introduced ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** The bill would amend Chapter 403 of the Government Code to add a provision giving the Comptroller permission to sell and assign all, or a portion, of the state's rights to future tobacco settlement payments to a nonprofit corporation meeting the requirements of the Texas Non-Profit Corporation Act. The proceeds from such sales would be deposited and applied in accordance with the General Appropriations Act, or as otherwise specified by the Legislature. All revenue bonds issued by the nonprofit corporation would be subject to approval by the Attorney General and registration by the Comptroller's Office; directors would be subject to state laws regarding personal financial disclosure, standards of conduct, and conflict of interest; and the State Auditor would perform annual financial audits, furnishing the Comptroller's Office with a copy of the audit report. The bill would permit, not require, the Comptroller to sell state payments from the tobacco settlement. The share of tobacco settlement payments to be sold is not specified in the bill. As such, the impact on tobacco settlement payments, and any proceeds from the sale of those payments, would depend on the number of transactions entered into by the Comptroller's office. The full impact on the State will be directly impacted by the actions of the Comptrollers office. The state tobacco settlement payment in fiscal 2001 was $330 million. Depending on the number of agreements entered into by the Comptroller's office, the State Auditor's office would experience an increase in their workload due the requirement of the bill for annual financial audits. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 308 State Auditor's Office, 304 Comptroller of Public Accounts LBB Staff: JK, SD, WP, BR