LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 21, 1997 TO: Honorable Ron Wilson, Chair IN RE: House Bill No. 2135, Committee Report 1st House, Substituted Committee on Licensing & Administrative Procedures By: Garcia House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2135 ( Relating to the regulation of wall and ceiling contractors; ) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2135-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net positive impact of $228,290 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 Section 2 of the bill would establish the Texas State Wall and Ceiling Contractors Advisory Board (Board) to advise the Department of Licensing and Regulation (TDLR). The bill would authorize the Commissioner to appoint the board's six members. TDLR estimates that the agency would need to hire one FTE, an Administrative Technician IV, for Board support. Section 3 of the bill would require TDLR to issue a Wall and Ceiling Contractor License. Section 5 of the bill would allow TDLR to set application and registration fees. Section 7 of the bill would require TDLR to investigate all allegations of violations and Section 8 would require TDLR to conduct corresponding administrative hearings related to these violations. To implement these sections of the bill, TDLR estimates that the agency would need to hire two FTEs, one Supervising Inspector to conduct inspections and one Administrative Technician I for inspection support. The total cost to General Revenue to hire the three FTEs would be $154,322 in FY 1998 and $131,138 per year thereafter, costs, benefits and equipment. The total revenue gain to General Revenue from TDLR collecting Wall and Ceiling Contractor License fees would be $285,000 in FY 1998 and $228,750 per year thereafter. Methodolgy Costs and revenue gains to implement the provisions of this bill are calculated under the following assumptions: (1) TDLR estimates that there would be 1,425 Wall and Ceiling Contractor License registrants in the FY 1998. (2) TDLR estimates that there would be 75 new registrations and 1,425 renewals per year in FYs 1999 thorough 2002. (3) A Wall and Ceiling Contractor License would cost $200 per year and renewals would cost $150 per year. 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 General General Revenue Employees from Revenue Fund Fund FY 1997 0001 0001 1998 ($154,322) $285,000 3.0 1998 (131,138) 228,750 3.0 2000 (131,138) 228,750 3.0 2001 (131,138) 228,750 3.0 2002 (131,138) 228,750 3.0 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 $130,678 1999 97,612 2000 97,612 2001 97,612 2002 97,612 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: LBB Staff: TH ,BK