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Senate Bill 881 renews a piece of legislation passed by the 79th Legislature, and expiring this year, that aimed at stimulating the growth of the wine industry in Texas by possibly directing some of the revenues derived from the excise tax and sales tax on wine to viticulture and oenology research projects, and to the Wine Industry Development Fund, including to match money provided by private entities.
Senate Bill 881 is supposed to follow in the footsteps of the legislation it renews by helping foster the growth of the wine industry in Texas. Unfortunately, like many economic development programs, this can potentially create distortions in the free market system. These programs are funded with tax revenues; lower taxes would allow for taxpayers to buy more wine with less money, and for the wine industry to yield greater profits and hence completely finance any research project it deems necessary to grow the industry.
We do not think that the role of government includes helping stimulate the growth of an industry. Nevertheless, we realize that Senate Bill 881 is renewing existing legislation, does not make any new appropriations and does not require the above-mentioned appropriations of tax revenues. As a consequence, we will remain neutral on Senate Bill 881.