LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 2, 1997
TO: Honorable Steven Wolens, Chair IN RE: House Bill No. 2416, Committee Report 1st House, Substituted
Committee on State Affairs By: Danburg
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2416 ( Relating
to the creation of the Texas Real Estate Inspector Licensing
Board and the regulation of real estate inspectors; providing
a criminal penalty.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB2416-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
negative impact of ($157,600) 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 create a new independant board, the Texas Real
Estate Inspector Licensing Board (TREILB).
The bill would
also create a new, dedicated unnamed fund for the use of the
board in the administration of the bill. The Comptroller would
be required to credit the new fund with money derived from fees,
assessments, or charges paid to the board under this bill.
The
bill would repeal Article 6573a, Revised Civil Statutes, relating
to the Real Estate Inspection Recovery Trust Fund 0988, and
would create, in its stead, the Inspection Recovery Fund. To
receive a license, a person would be required to pay a fee,
in addition to other licensing fees, of no more than $200 into
the Inspector Recovery Fund.
The bill also would establish
the Inspector Regulation Account as a dedicated account in the
General Revenue Fund 0001. The account would be funded by transfers
of money in excess of $600,000 from the Inspection Recovery
Fund. Money in this account could only be used for the payment
of costs incurred by the board in regulation of inspectors.
The
bill would take effective July 1, 1997.
Methodolgy
It is estimated that a staff of approximately 5 full-time equivalent
positions (FTEs) plus associated operating cost would be required
to administer the bill. This estimate is based on the assumption
that approximately 1,400 of the currently licensed inspectors
would apply for certification with the new board. It is estimated
that the costs to administer the bill would be approximately
$320,000 every year, including operating costs to implement
the board.
The bill would require that all fees, assessments,
and charges collected under these provisions be placed in the
new un-named fund for the board's use in the administration
of the bill's provisions. This analysis assumes that fees would
be raised in amounts necessary to implement the bill's provisions.
In fiscal 1996, real estate inspectors paid $34,000 in fees
to the commission for deposit in the General Revenue Fund.
As redefined by the bill, the Inspection Recovery Fund would
be used to reimburse a person who suffers actual damages from
an act committed by an inspector. If on December 31 of any
year, the Inspection Recovery Fund balance fell below $300,000,
each inspector would be required to pay an additional $75 at
their next license renewal, or a pro rata share to bring the
fund to $450,000. If on December 31 of any year, the Inspection
Recovery Fund balance exceeded $600,000, the excess would be
transferred into a separate account in the General Revenue Fund,
known as the Inspector Regulation Account, which could only
be used by the board in the regulation of inspectors. Based
on historical information, transfers of $42,000 have been made
from Real Estate Inspection Recovery Trust Fund 0988 to the
General Revenue Fund.
The unobligated and unexpended balance
of the fiscal 1997 appropriation to the Texas Real Estate Commission
for the regulation of real estate inspectors would be transferred
to the board for the implementation of the bill's provisions.
The bill would create a new special fund, a new dedicated
account in the General Revenue Fund, and new dedicated revenue
sources in the State Treasury. The creation and/or continuation
of special funds and dedicated revenue sources outside the General
Revenue Fund could further restrict the Legislature's ability
to appropriate revenues for general operating purposes.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Six Year Impact:
Fiscal Year Probable Revenue Probable Revenue Probable Change in Number
Gain/(Loss) from Gain/(Loss) from Savings/(Cost) of State
General Revenue New - Unnamed Fund from New - Employees from
Fund Unnamed Fund FY 1997
0001 NEW-OTH NEW-OTH
1997 ($5,600) $5,600 ($5,600)
1997 (76,000) 320,000 (320,000) 5.0
1999 (76,000) 320,000 (320,000) 5.0
2000 (76,000) 320,000 (320,000) 5.0
2001 (76,000) 320,000 (320,000) 5.0
2002 (76,000) 320,000 (320,000) 5.0
Net Impact on General Revenue Related Funds:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1997 ($5,600)
1998 (76,000)
1999 (76,000)
2000 (76,000)
2001 (76,000)
2002 (76,000)
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: 329 Real Estate Commission
304 Comptroller of Public Accounts
LBB Staff: JK ,JD ,CG