LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 21, 1997 TO: Honorable Ron Wilson, Chair IN RE: Senate Bill No. 259, As Engrossed Committee on Licensing & Administrative Procedures By: Moncrief House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB259 ( Relating to the regulation of roofing contractors; providing penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB259-As Engrossed Implementing the provisions of the bill would result in a net positive impact of $222,872 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 the Department of Licensing and Regulation (TDLR) to license roofing contractors and provide for criminal and administrative penalties. The bill would exempt certain maintenance personnel and allow homeowners to sign a disclosure statement acknowledging that the roofer is not licensed. Examinations at various locations and reciprocity agreements with other states would be required to license these contractors. Liability insurance and bonding requirements are also specified. The TDLR would also be required to publish an annual directory of all persons licensed under this legislation. In addition, this bill would provide for the creation of a six member Roofing Contractors Advisory Board. This bill would allow the Department to employ personnel as necessary for implementation and authorize additional expenditures including office expenses, equipment, and other necessary facilities. Methodolgy According to the TDLR, an additional 23 FTEs would be required to implement the provisions of this bill. Most of the costs are related to examination administration. The agency assumes that 15,000 contractors would be required to have a license. The agency would examine and license 6,000 people in the first year. The second year would include 6,000 additional new licensees and 6,000 renewals from the first year. In the third year, the agency would license any remaining contractors requiring licenses (about 3,000) and continue license renewals. The initial license fee would be $175 per contractor and annual license renewals would be $125 per contractor. Regulation of this industry would also result in new administrative hearings from complaints originated in the industry. The agency assumes 30 administrative hearings would result from 900 complaints received annually. This analysis assumes that the Commission would set fees necessary to cover the costs of administering this Act. 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 Salaries/Wages Probable Probable Revenue Change in Number Savings/(Cost) Savings/(Cost) Gain/(Loss) from of State from General from General General Revenue Employees from Revenue Fund Revenue Fund Fund FY 1997 0001 0001 0001 1998 ($520,864) ($497,700) $1,050,000 23.0 1998 (360,864) (497,700) 1,050,000 23.0 2000 (351,864) (497,700) 1,875,000 23.0 2001 (367,864) (497,700) 1,875,000 23.0 2002 (367,864) (497,700) 1,875,000 23.0 Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $31,436 1999 191,436 2000 1,025,436 2001 1,009,436 2002 1,009,436 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Revenue impacts to local governments would occur as a result of deferring licensing requirements to the state. Local governments currently regulating roofing contractors would be limited to only enforcement authorization. Currently, the City of San Antonio generates approximately $47,000 per year in roofer licensing; the City of Fort Worth collects approximately $60,000 in roofer licensing. Source: Agencies: 452 Department of Licensing and Regulation LBB Staff: JK ,TH ,JD ,RA