LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 18, 1997
         
         
      TO: Honorable John T. Smithee, Chair            IN RE:  House Bill No. 531, Committee Report 1st House, Substituted
          Committee on Insurance                              By: Shields
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB531 ( Relating 
to expunction of certain records of the Texas Department of 
Insurance.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB531-Committee Report 1st House, Substituted
         
Implementing the provisions of the bill would result in a net 
positive impact of $98,065 to General Revenue Related Funds 
through the biennium ending August 31, 1999.
         
The bill would make no appropriation but could provide the legal 
basis for an appropriation of funds to implement the provisions 
of the bill.
         
 
Fiscal Analysis
 
This bill would add Article 1.10F to the Texas Insurance Code 
to allow persons who have violated the Texas Insurance Code, 
Texas Department of Insurance (TDI) rules or other laws relating 
to insurance to seek expunction of their TDI records if certain 
criteria is met.  The bill provides that in order to qualify 
for expunction, a violation could not have resulted in the assessment 
of a monetary penalty against the person.  

TDI would have 
to hire 1 FTE (0.5 Attorney and 0.5 Administrative Technician) 
to handle the increase in workload from persons filing petitions 
for expunction and from the State Office of Adminsitrative Hearings 
(SOAH) hearings conducted on these petitions.  Total costs to 
TDI General Revenue Dedicated Fund 036 would be $56,751 in FY 
1998 and $41,314 per year thereafter.  This includes increased 
SOAH costs of $8,960 in FY 1998 and $4,480 per year thereafter.

The 
provisions of the bill would require that a person who files 
a petition for expunction pay an advance expunction fee to cover 
the costs of the SOAH expunction proceedings.  TDI assumes that 
these fees would be deposited into General Revenue since the 
bill does not identify which fund the fees would be deposited 
into.  The estimated revenue gain to General Revenue would be 
$56,752 in FY 1998 and $41,314 per year thereafter.
 
Methodolgy
 
Costs to TDI General Revenue Dedicated Fund 036 and related 
revenue gains to General Revenue, are based on the following 
assumptions:

(1) There would be 32 hearings in FY 1998 and 
16 per year thereafter; more hearings are predicted in FY 1998 
because TDI anticipates an accelerated petition filing rate 
during the first year of implementation.

(2) Revenue generated 
from the expunction fee would be deposited into General Revenue.
The probable fiscal implications of implementing the provisions 
of the bill during each of the first five years following passage 
is estimated as follows:
 
Five Year Impact:
 
Fiscal Year Probable           Probable Revenue   Change in Number   
            Savings/(Cost)     Gain/(Loss) from   of State                                                
            from Texas         General Revenue    Employees from                                          
            Department of      Fund               FY 1997                                                 
            Insurance                                                                                     
            Operating                                                                                     
            Account/                                                                                      
            GR-Dedicated                                                                                  
            0036               0001                                                                        
       1998         ($56,751)           $56,751               1.0                                    
       1998          (41,314)            41,314               1.0                                    
       2000          (41,314)            41,314               1.0                                    
       2001          (41,314)            41,314               1.0                                    
       2002          (41,314)            41,314               1.0                                    
 
 
         Net Impact on General Revenue Related Funds:
 
The probable fiscal implication to General Revenue related funds 
during each of the first five years is estimated as follows:
 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998              $56,751
               1999               41,314
               2000               41,314
               2001               41,314
               2002               41,314
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   454   Department of Insurance
                                         
                      LBB Staff:   JK ,TH ,BK