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
  
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*  No significant fiscal implication to the State is anticipated.        *
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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