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