LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 6, 1997 TO: Honorable Kenny Marchant, Chair IN RE: House Bill No. 2352 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-As Introduced Implementing the provisions of the bill would result in a net negative impact of $(158,000) 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 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. 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 General General Revenue Employees from Revenue Fund Fund FY 1997 0001 0001 1998 ($231,000) $120,000 6.5 1998 (227,000) 180,000 6.5 2000 (230,000) 120,000 6.5 2001 (233,000) 120,000 6.5 2002 (235,000) 120,000 6.5 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 ($111,000) 1999 (47,000) 2000 (110,000) 2001 (113,000) 2002 (115,000) Similar annual fiscal implications These impacts 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: 302 Office of the Attorney General LBB Staff: JK ,TH ,JA