LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 16, 1997
TO: Honorable Steven Wolens, Chair IN RE: House Bill No. 2416
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-As Introduced FN Revision 1
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 state agency, the Texas Real Estate
Inspector Licensing Board (TREILB) and amend Article 6573a,
Section 23 of The Real Estate License Act to transfer the authority
to regulate real estate inspectors from the Texas Real Estate
Commission (TREC) to the (TREILB).
The board would be composed
of nine members: five professional inspectors, three public
members, and one real estate broker. The board would be authorized
to adopt rules relating to the licensing and regulation of inspectors,
to hire employees to administer the bill, and to contract with
another agency for services.
This bill would require the
administrator of TREC to identify records and property relating
to the licensing of inspectors, including any money in the real
estate inspector regulation account and the real estate inspection
recovery fund, and transfer the records and property to the
new board.
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
$400,000 in the first year and $320,000 every year thereafter.
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) 400,000 (400,000) 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:
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
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