LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 17, 1997 TO: Honorable Kenny Marchant, Chair IN RE: House Bill No. 2352, Committee Report 1st House, Substituted Committee on Financial Institutions By: Marchant House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB2352 ( Relating to the registration of mortgage brokers.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB2352-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net impact of $0 to General Revenue Related Funds through the biennium ending August 31, 1999. The bill would create a special account, a new General Revenue - Dedicated account, for the collection of all revenues to be used only to administer the provisions of the bill. 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 require mortgage brokers to register with the Office of the Consumer Credit Commissioner and requires that agency to examine registrants and verify compliance with various educational requirements. The bill would also create a special General Revenue - Dedicated account for the collection of all money related to registering mortgage brokers to be used soley for the same purpose. Methodolgy From industry information, the agency estimates that 800 registrations will occur. The bill would require the agency to perform investigations, verification of statutory application requirements and registrant compliance with educational requirements. It is assumed that both the application fee and the annual registration fee are due in the first year, that hearing costs will not be recoverable from registrants, that examination costs are intended to be covered by the annual registration fee, and that renewals require agency approval. To conduct these activities, the agency projects that it would need to hire additional staff. 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 New - GR New - GR Dedicated Employees from Dedicated FY 1997 NEW-DED NEW-DED 1998 $156,300 $180,000 4.0 1998 126,300 150,000 4.0 2000 101,300 120,000 3.0 2001 101,300 120,000 3.0 2002 101,300 120,000 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 $0 1999 0 2000 0 2001 0 2002 0 No fiscal implication to units of local government is anticipated. Source: Agencies: LBB Staff: JK ,TH ,JA