LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION May 2, 2017 TO: Honorable Four Price, Chair, House Committee on Public Health FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1908 by Zerwas (Relating to the distribution, possession, purchase, consumption, and receipt of cigarettes, e-cigarettes, and tobacco products; providing penalties.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB1908, Committee Report 1st House, Substituted: a negative impact of ($3,468,000) through the biennium ending August 31, 2019. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,688,000) for the 2018-19 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 85TH LEGISLATIVE REGULAR SESSION
May 2, 2017
TO: Honorable Four Price, Chair, House Committee on Public Health FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB1908 by Zerwas (Relating to the distribution, possession, purchase, consumption, and receipt of cigarettes, e-cigarettes, and tobacco products; providing penalties.), Committee Report 1st House, Substituted
TO: Honorable Four Price, Chair, House Committee on Public Health
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB1908 by Zerwas (Relating to the distribution, possession, purchase, consumption, and receipt of cigarettes, e-cigarettes, and tobacco products; providing penalties.), Committee Report 1st House, Substituted
Honorable Four Price, Chair, House Committee on Public Health
Honorable Four Price, Chair, House Committee on Public Health
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB1908 by Zerwas (Relating to the distribution, possession, purchase, consumption, and receipt of cigarettes, e-cigarettes, and tobacco products; providing penalties.), Committee Report 1st House, Substituted
HB1908 by Zerwas (Relating to the distribution, possession, purchase, consumption, and receipt of cigarettes, e-cigarettes, and tobacco products; providing penalties.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB1908, Committee Report 1st House, Substituted: a negative impact of ($3,468,000) through the biennium ending August 31, 2019. Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,688,000) for the 2018-19 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
Estimated Two-year Net Impact to General Revenue Related Funds for HB1908, Committee Report 1st House, Substituted: a negative impact of ($3,468,000) through the biennium ending August 31, 2019.
Additionally, the bill will have a direct impact of a revenue loss to the Property Tax Relief Fund of ($3,688,000) for the 2018-19 biennium. Any loss to the Property Tax Relief Fund must be made up with an equal amount of General Revenue to fund the Foundation School Program.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2018 ($577,000) 2019 ($2,891,000) 2020 ($4,751,000) 2021 ($5,922,000) 2022 ($5,587,000)
2018 ($577,000)
2019 ($2,891,000)
2020 ($4,751,000)
2021 ($5,922,000)
2022 ($5,587,000)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromState Highway Fund6 Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund304 Probable Revenue Gain/(Loss) fromCities 2018 ($577,000) ($282,000) ($814,000) ($54,000) 2019 ($2,891,000) $0 ($2,874,000) ($172,000) 2020 ($4,751,000) $0 ($4,286,000) ($291,000) 2021 ($5,922,000) $0 ($5,742,000) ($348,000) 2022 ($5,587,000) $0 ($5,069,000) ($344,000) Fiscal Year Probable Revenue Gain/(Loss) fromTransit Authorities Probable Revenue Gain/(Loss) fromCounties & Special Districts 2018 ($19,000) ($10,000) 2019 ($59,000) ($31,000) 2020 ($101,000) ($53,000) 2021 ($121,000) ($64,000) 2022 ($119,000) ($62,000)
Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromState Highway Fund6 Probable Revenue Gain/(Loss) fromProperty Tax Relief Fund304 Probable Revenue Gain/(Loss) fromCities 2018 ($577,000) ($282,000) ($814,000) ($54,000) 2019 ($2,891,000) $0 ($2,874,000) ($172,000) 2020 ($4,751,000) $0 ($4,286,000) ($291,000) 2021 ($5,922,000) $0 ($5,742,000) ($348,000) 2022 ($5,587,000) $0 ($5,069,000) ($344,000)
2018 ($577,000) ($282,000) ($814,000) ($54,000)
2019 ($2,891,000) $0 ($2,874,000) ($172,000)
2020 ($4,751,000) $0 ($4,286,000) ($291,000)
2021 ($5,922,000) $0 ($5,742,000) ($348,000)
2022 ($5,587,000) $0 ($5,069,000) ($344,000)
Fiscal Year Probable Revenue Gain/(Loss) fromTransit Authorities Probable Revenue Gain/(Loss) fromCounties & Special Districts 2018 ($19,000) ($10,000) 2019 ($59,000) ($31,000) 2020 ($101,000) ($53,000) 2021 ($121,000) ($64,000) 2022 ($119,000) ($62,000)
2018 ($19,000) ($10,000)
2019 ($59,000) ($31,000)
2020 ($101,000) ($53,000)
2021 ($121,000) ($64,000)
2022 ($119,000) ($62,000)
Fiscal Analysis
The bill would amend Subchapter H of Chapter 161 of the Health and Safety Code, regarding public health provisions, to increase the legal age for the sale, distribution, possession, purchase, consumption, or receipt of cigarettes, e-cigarettes, or tobacco products from age 18 to age 21. Individuals aged 18 and over on the effective date of the bill would be exempt from the new age requirement. The bill would require valid proof of identification for persons younger than 30 years of age, rather than the 27 years of age under current law. The bill would exclude certain products approved by the U.S. Food and Drug Administration for the treatment of nicotine or smoking addiction from the provisions of Subchapter H. The bill would make conforming changes elsewhere in Chapter 161. The bill would repeal Health and Safety Code Sections 161.083(a-1), regarding the providing of e-cigarettes to a person younger than 27 years of age, and 161.455, regarding cigarette and e-cigarette shipping requirements. The bill would take effect September 1, 2017.
Methodology
The fiscal impact on Texas tobacco tax revenue was based on the 2018-19 Biennial Revenue Estimate. The reduction in the use of cigarettes, snuff, cigars, and other tobacco products by 18 to 20 year old Texans would lead to reduced revenue contributions to the General Revenue Fund 0001 and the Property Tax Relief Fund 0304. The reduction in the use of all products for which the age requirement is raised would lead to reduced sales tax revenue to Fund 0001, State Highway Fund 0006, cities, transit authorities, counties, and special districts.Pursuant to Proposition 7 (2015), any sales tax collections in excess of $28 billion and less than$30.5 billion will be deposited into the State Highway Fund. Because total 2018 collections areprojected to fall in that range, the 2018 sales tax revenue loss is from the State Highway Fund instead of General Revenue.With a reduction in the use of tobacco products, there could be an indeterminate savings to the state in the future resulting from reduced health care costs.
Local Government Impact
There would be a corresponding amount of sales tax revenue loss from local taxing jurisdictions. Those revenue losses are displayed in the above tables.
Source Agencies: 304 Comptroller of Public Accounts, 529 Health and Human Services Commission, 537 State Health Services, Department of
304 Comptroller of Public Accounts, 529 Health and Human Services Commission, 537 State Health Services, Department of
LBB Staff: UP, KCA, SD, AG, RD
UP, KCA, SD, AG, RD