According to the Legislative Budget Board (LBB), SB 650 is not expected to have a significant fiscal impact on the state government. The costs associated with the bill’s implementation, such as developing and enforcing new electronic age verification requirements, are expected to be absorbed within the existing resources of relevant state agencies, particularly the Texas Alcoholic Beverage Commission (TABC) and the Office of Court Administration. This suggests that the bill does not require new appropriations or a substantial increase in state spending.

For local governments, no significant fiscal impact is anticipated. While local authorities may need to oversee compliance within their jurisdictions, the bill does not impose direct costs on local governments or law enforcement agencies. The fiscal note does not address potential indirect costs to private businesses, such as the expense of acquiring electronic verification technology, which could be a concern for small retailers.

In summary, while state and local governments are unlikely to experience financial burdens, the bill may impose costs on private businesses required to implement electronic age verification systems. However, with delayed enforcement until 2027, businesses will have time to comply gradually, potentially mitigating any immediate financial strain.

SB 650 seeks to address the issue of underage alcohol purchases by requiring electronic age verification at retail points of sale, excluding package stores. The intent behind the bill is to reduce the number of minors using fake IDs to buy alcohol, citing tragic cases such as that of an 18-year-old who purchased alcohol multiple times using a fake ID before being involved in a fatal crash. By mandating that retailers electronically scan identification, the bill aims to prevent similar incidents by ensuring more robust and consistent age verification methods.

While the goal of preventing underage drinking and its consequences is valid, the bill raises concerns about its impact on businesses, personal privacy, and government overreach. Small businesses and independent retailers will likely bear the burden of purchasing and maintaining electronic verification systems, which could create financial hardship—especially for those who sell alcohol in low-volume settings. Additionally, there are privacy implications, as scanning identification cards could lead to data retention and potential misuse of personal information. The exemption of package stores also introduces a policy inconsistency, as they remain free to verify age manually, raising questions about fairness in regulatory treatment across different alcohol retailers.

Given these concerns, Texas Policy Research recommends that lawmakers vote NO on SB 650 unless specific amendments are adopted. The bill should be modified to:

• Clarify data privacy protections, ensuring that scanned information is not stored or used for purposes beyond immediate age verification.
• Ensure equal treatment of alcohol retailers by reconsidering the exemption for package stores or expanding alternative verification methods for all businesses.

Without these modifications, the bill risks creating unintended burdens on businesses while selectively applying enforcement mechanisms.