LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION March 15, 2011 TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB268 by Uresti (Relating to the distribution, possession, purchase, consumption, receipt, and taxation of tobacco products; providing penalties.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB268, As Introduced: a negative impact of ($12,109,000) through the biennium ending August 31, 2013. Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $19,971,000 for the 2012-13 biennium. Any gain to the Property Tax Relief Fund will free up General Revenue of the same amount.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
March 15, 2011
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB268 by Uresti (Relating to the distribution, possession, purchase, consumption, receipt, and taxation of tobacco products; providing penalties.), As Introduced
TO: Honorable Steve Ogden, Chair, Senate Committee on Finance
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB268 by Uresti (Relating to the distribution, possession, purchase, consumption, receipt, and taxation of tobacco products; providing penalties.), As Introduced
Honorable Steve Ogden, Chair, Senate Committee on Finance
Honorable Steve Ogden, Chair, Senate Committee on Finance
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB268 by Uresti (Relating to the distribution, possession, purchase, consumption, receipt, and taxation of tobacco products; providing penalties.), As Introduced
SB268 by Uresti (Relating to the distribution, possession, purchase, consumption, receipt, and taxation of tobacco products; providing penalties.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB268, As Introduced: a negative impact of ($12,109,000) through the biennium ending August 31, 2013. Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $19,971,000 for the 2012-13 biennium. Any gain to the Property Tax Relief Fund will free up General Revenue of the same amount.
Estimated Two-year Net Impact to General Revenue Related Funds for SB268, As Introduced: a negative impact of ($12,109,000) through the biennium ending August 31, 2013. Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $19,971,000 for the 2012-13 biennium. Any gain to the Property Tax Relief Fund will free up General Revenue of the same amount.
Estimated Two-year Net Impact to General Revenue Related Funds for SB268, As Introduced: a negative impact of ($12,109,000) through the biennium ending August 31, 2013.
Additionally, the bill will have a direct impact of a revenue gain to the Property Tax Relief Fund of $19,971,000 for the 2012-13 biennium. Any gain to the Property Tax Relief Fund will free up General Revenue of the same amount.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 ($5,675,000) 2013 ($6,434,000) 2014 ($6,125,000) 2015 ($6,211,000) 2016 ($5,717,000)
2012 ($5,675,000)
2013 ($6,434,000)
2014 ($6,125,000)
2015 ($6,211,000)
2016 ($5,717,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund304 Probable Revenue Gain/(Loss) fromPhysician Ed. Loan Repayment5144 2012 ($5,675,000) $9,121,000 ($625,000) 2013 ($6,434,000) $10,850,000 ($679,000) 2014 ($6,125,000) $9,431,000 ($686,000) 2015 ($6,211,000) $10,349,000 ($669,000) 2016 ($5,717,000) $8,947,000 ($656,000)
Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund304 Probable Revenue Gain/(Loss) fromPhysician Ed. Loan Repayment5144 2012 ($5,675,000) $9,121,000 ($625,000) 2013 ($6,434,000) $10,850,000 ($679,000) 2014 ($6,125,000) $9,431,000 ($686,000) 2015 ($6,211,000) $10,349,000 ($669,000) 2016 ($5,717,000) $8,947,000 ($656,000)
2012 ($5,675,000) $9,121,000 ($625,000)
2013 ($6,434,000) $10,850,000 ($679,000)
2014 ($6,125,000) $9,431,000 ($686,000)
2015 ($6,211,000) $10,349,000 ($669,000)
2016 ($5,717,000) $8,947,000 ($656,000)
Fiscal Analysis
The bill would amend Chapter 161 of the Health and Safety Code to increase the legal age for the sale, distribution, possession, purchase, consumption, or receipt of cigarettes or tobacco products from 18 to 19 years of age. Section 161.455, regarding requirements for a person mailing or shipping cigarettes in connection with a delivery sale order, would be repealed. The bill would amend Chapter 154 of the Tax Code to increase the tax rate on cigarettes weighing three pounds or less per thousand cigarettes to $71.50 per thousand cigarettes ($1.43 per pack of 20 cigarettes) from $70.50 per thousand cigarettes ($1.41 per pack).
The bill would amend Chapter 161 of the Health and Safety Code to increase the legal age for the sale, distribution, possession, purchase, consumption, or receipt of cigarettes or tobacco products from 18 to 19 years of age. Section 161.455, regarding requirements for a person mailing or shipping cigarettes in connection with a delivery sale order, would be repealed.
The bill would amend Chapter 154 of the Tax Code to increase the tax rate on cigarettes weighing three pounds or less per thousand cigarettes to $71.50 per thousand cigarettes ($1.43 per pack of 20 cigarettes) from $70.50 per thousand cigarettes ($1.41 per pack).
Methodology
The Comptroller of Public Accounts indicates that the bill would reduce the use of tobacco products by 18 year-old Texans by 33 percent. The reduction in the use of cigars and other tobacco products would lead to reduced revenue contributions to General Revenue Fund No. 0001, Property Tax Relief Fund No. 0304, and General Revenue-Dedicated Account, Physician Education Loan Repayment No. 5144 from the cigar and tobacco products tax. The reduction in the use of cigarettes would lead to reduced revenue contributions to General Revenue Fund No. 0001 and Property Tax Relief Fund No. 0304. The revenue gain associated with the cigarette tax rate increase would be to Property Tax Relief Fund No. 0304, as Section 154.6035 of the Tax Code directs proceeds from the portion of the tax rate in excess of $20.50 per thousand cigarettes to be deposited to Fund 0304.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: JOB, KK, SD, AG
JOB, KK, SD, AG