| TO: | Honorable David Dewhurst, Lieutenant Governor, Senate |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB1217 by Gallegos (Relating to fees for and terms of permits and licenses issued by the Texas Alcoholic Beverage Commission. ), As Passed 2nd House |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | $0 |
| 2009 | $53,200 |
| 2010 | $53,200 |
| 2011 | $53,200 |
| 2012 | $53,200 |
| Fiscal Year | Probable Revenue Gain/(Loss) from GENERAL REVENUE FUND 1 |
Probable Savings/(Cost) from GENERAL REVENUE FUND 1 |
Change in Number of State Employees from FY 2007 |
|---|---|---|---|
| 2008 | $394,999 | ($394,999) | 7.0 |
| 2009 | $394,999 | ($341,799) | 7.0 |
| 2010 | $394,999 | ($341,799) | 7.0 |
| 2011 | $394,999 | ($341,799) | 7.0 |
| 2012 | $394,999 | ($341,799) | 7.0 |
The bill would amend the Alcoholic Beverage Code relating to fees for and terms of permits and licenses issued by the Texas Alcoholic Beverage Commission (TABC).
The bill would amend Alcoholic Beverage Code, Section 5 by establishing a two year license and permit term and the collection of double fees and surcharges at the time of application for an original or renewal license/permit. The bill also amends Alcoholic Beverage Code, Section 28 regarding the renewal of certain alcoholic beverage permits held by a corporation. The bill would eliminate the $500 fee required for substantial changes required for the holder's current alcoholic beverage license. The bill also deletes the 10 day prior notice for corporate control for a mixed beverage permit holder. The bill states that Alcoholic Beverage Code, Section 11.40 is repealed. The bill would take effect on September 1, 2007. The bill would apply to licenses and permits issued or renewed on or after September 1, 2007.
TABC is a self-funded agency and is required to fund both direct and indirect appropriation costs through fees and surcharges. This version of the bill includes provisions that would eliminate the $500 fee required for substantial changes required for the holder's current alcoholic beverage license. TABC estimates that 132 current licenses would not be required and would cost the state $66,000 per year (132 x $500) in lost General Revenue. This additional revenue loss would require TABC to increase surcharge collection by $394,999 per year to implement all provisions in the bill ($66,000 + $328,999 previous bill costs). TABC estimates they collected $16,916,641 in surcharges in fiscal year 2006. In order to pay for the provisions in the bill, TABC states they would be required to raise the surcharge fee by 2.334% ($394,999/$16,916,641) to collect an additional $394,999 in General Revenue each year.
According to TABC all current processes, procedures and systems for licenses and permits (both original and renewals) are developed and programmed for one year renewal terms. TABC states the bill would require updates of all current processes, procedures and systems to a two year renewal term. TABC states that 7 additional FTEs would be required to handle increases in tax assessor collector reconciliations, monitoring violation history to determine a one year or two year renewal for each applicant, bond verifications, and process change applications to keep all data current and accurate. TABC states that bill text also provides for two possible terms for licenses and permits which would increase application process time.
TABC states that moving to a two year renewal term could cause renewal applications and the revenue collected from the licenses and permits to cross between biennia. TABC states in the past, that this has not been an issue since the one year term for application and fees/surcharges are collected at the time of application. TABC is unclear as to how the two year renewals would impact the Comptroller of Public Accounts reporting requirements which monitor the agency's revenue collection to verify enough revenue is collected to fund the agency's appropriations.
The technology costs estimated to comply with the provisions of the bill include $102,800 in General Revenue in fiscal year 2008 for program changes to the permit licensing system.
| Source Agencies: | 458 Alcoholic Beverage Commission, 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, JRO, GG, LG
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