LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION April 27, 2015 TO: Honorable Kevin Eltife, Chair, Senate Committee on Business & Commerce FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB1198 by Eltife (Relating to intra-industry relationships between alcoholic beverage manufacturers, wholesalers, and retailers.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for SB1198, As Introduced: a negative impact of ($1,066,010) through the biennium ending August 31, 2017.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 84TH LEGISLATIVE REGULAR SESSION
April 27, 2015
TO: Honorable Kevin Eltife, Chair, Senate Committee on Business & Commerce FROM: Ursula Parks, Director, Legislative Budget Board IN RE:SB1198 by Eltife (Relating to intra-industry relationships between alcoholic beverage manufacturers, wholesalers, and retailers.), As Introduced
TO: Honorable Kevin Eltife, Chair, Senate Committee on Business & Commerce
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: SB1198 by Eltife (Relating to intra-industry relationships between alcoholic beverage manufacturers, wholesalers, and retailers.), As Introduced
Honorable Kevin Eltife, Chair, Senate Committee on Business & Commerce
Honorable Kevin Eltife, Chair, Senate Committee on Business & Commerce
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
SB1198 by Eltife (Relating to intra-industry relationships between alcoholic beverage manufacturers, wholesalers, and retailers.), As Introduced
SB1198 by Eltife (Relating to intra-industry relationships between alcoholic beverage manufacturers, wholesalers, and retailers.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB1198, As Introduced: a negative impact of ($1,066,010) through the biennium ending August 31, 2017.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1198, As Introduced: a negative impact of ($1,066,010) through the biennium ending August 31, 2017.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2016 ($552,019) 2017 ($513,991) 2018 ($513,991) 2019 ($513,991) 2020 ($513,991)
2016 ($552,019)
2017 ($513,991)
2018 ($513,991)
2019 ($513,991)
2020 ($513,991)
All Funds, Five-Year Impact: Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 2016 ($552,019) 2017 ($513,991) 2018 ($513,991) 2019 ($513,991) 2020 ($513,991)
Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 2016 ($552,019) 2017 ($513,991) 2018 ($513,991) 2019 ($513,991) 2020 ($513,991)
2016 ($552,019)
2017 ($513,991)
2018 ($513,991)
2019 ($513,991)
2020 ($513,991)
Fiscal Year Change in Number of State Employees from FY 2015 2016 6.0 2017 6.0 2018 6.0 2019 6.0 2020 6.0 Fiscal Analysis The bill would amend the Alcoholic Beverage Code to add a section providing exceptions to certain prohibitions on "tied house" interests. Exceptions would apply if a person or affiliate directly or indirectly owned 5 percent or less of the other license or permit holder's business, assets, property, or equity; or, if the person or affiliate owned more than 5 percent of the other license or permit holder's business, assets, property, or equity and certain other conditions were met. The bill would also repeal a section of the Alcoholic Beverage Code that prohibits certain interests of manufacturers and wholesalers. The bill would become effective on September 1, 2015. Methodology According to the Texas Alcoholic Beverage Commission (TABC), business structures and entities have evolved and are constantly developing into multiple layers of ownership and multiple entity structures within ownerships. The TABC assumes that complicated business structures will continue and would become more complex under the provisions of the bill. The agency's analysis concluded that due to the complexity of organizational structures, the bill's provisions would require 6 License and Permit Specialist V FTEs and visual analytical tools to outline and verify tied house interests among tier members of the alcoholic beverage industry. Technology According to TABC, the visual analytical tools would help in the review and analysis of complex business structures to determine whether entities are in compliance with the bill's provisions. TABC stated that the visual tools would help support business rules or logic to assist in determining ownership to the degree required; publishing results for required documentation purposes; and would exploring underlying data seen in visual form without the need to access data through another source. TABC estimates the visual analytics software solution will have a recurring cost of $12,222 per year for 6 users and 2 developer licenses. The agency anticipates a one-time programming cost of $25,164 would be incurred initially to implement the program. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies:458 Alcoholic Beverage Commission LBB Staff: UP, CL, AI, JHa, JN
Fiscal Year Change in Number of State Employees from FY 2015 2016 6.0 2017 6.0 2018 6.0 2019 6.0 2020 6.0
2016 6.0
2017 6.0
2018 6.0
2019 6.0
2020 6.0
Fiscal Analysis
The bill would amend the Alcoholic Beverage Code to add a section providing exceptions to certain prohibitions on "tied house" interests. Exceptions would apply if a person or affiliate directly or indirectly owned 5 percent or less of the other license or permit holder's business, assets, property, or equity; or, if the person or affiliate owned more than 5 percent of the other license or permit holder's business, assets, property, or equity and certain other conditions were met. The bill would also repeal a section of the Alcoholic Beverage Code that prohibits certain interests of manufacturers and wholesalers. The bill would become effective on September 1, 2015.
Methodology
According to the Texas Alcoholic Beverage Commission (TABC), business structures and entities have evolved and are constantly developing into multiple layers of ownership and multiple entity structures within ownerships. The TABC assumes that complicated business structures will continue and would become more complex under the provisions of the bill. The agency's analysis concluded that due to the complexity of organizational structures, the bill's provisions would require 6 License and Permit Specialist V FTEs and visual analytical tools to outline and verify tied house interests among tier members of the alcoholic beverage industry.
Technology
According to TABC, the visual analytical tools would help in the review and analysis of complex business structures to determine whether entities are in compliance with the bill's provisions. TABC stated that the visual tools would help support business rules or logic to assist in determining ownership to the degree required; publishing results for required documentation purposes; and would exploring underlying data seen in visual form without the need to access data through another source. TABC estimates the visual analytics software solution will have a recurring cost of $12,222 per year for 6 users and 2 developer licenses. The agency anticipates a one-time programming cost of $25,164 would be incurred initially to implement the program.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 458 Alcoholic Beverage Commission
458 Alcoholic Beverage Commission
LBB Staff: UP, CL, AI, JHa, JN
UP, CL, AI, JHa, JN