LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 6, 1997 TO: Honorable Ron Wilson, Chair IN RE: Senate Bill No. 805, As Engrossed Committee on Licensing & Administrative Procedures By: Brown House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB805 ( relating to the regulation of plumbing; providing penalties) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB805-As Engrossed 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 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 amend the Plumbing License Law to require the Board of Plumbing Examiners to license plumbers who perform work in certain unincorporated areas of the state and in incorporated areas with populations of more than 1,000 persons. This would expand the Board of Plumbing Examiners' jurisdiction and increase the agency's licensing and enforcement workloads. Six new FTEs (one Attorney, one Examination Employee, three Field Representatives, and one Administrative Technician) would be needed, along with associated overhead, training, and computer costs. Also, the Attorney and Field Representatives would require extensive travel (the Attorney to county courts and the Field Representatives to construction sites) so costs for cars, travel and telephones are included. New costs to implement the provisions of this bill would be $439,291 in FY 1998, $367,291 in FY 1999 and $336,291 in FYs 2000, 2001, and 2002. FY 1999 costs are slightly higher than later years due to the phasing in of computer purchases over a two year (FY 1998 and 1999) period. However, all of these costs would be covered by revenue gained from an increased number of licenses issued, an increase in administrative penalties from enhanced enforcement efforts, and, if needed, an overall increase in the agency's license and examination fees. This bill would amend other sections of the Plumbing License Law, but would cause no additional fiscal impact to the State. Methodolgy Implementing the provisions of the bill would increase the number of persons served by the law by approximately 50%. Licensing and enforcement workload increases to implement the provisions of the bill were calculated accordingly. It is assumed that all new costs would be covered by the following: (1) An increase in revenue from license fees, due to an increase in the number of plumbers required to be licensed; (2) An increase in administrative penalties from enhanced enforcement efforts; and, (3) An overall increase in license and examination fees, if necessary. 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 ($439,291) $439,291 6.0 1998 (367,291) 367,291 6.0 2000 (336,291) 336,291 6.0 2001 (336,291) 336,291 6.0 2002 (336,291) 336,291 6.0 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 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The provisions of this bill may create some fiscal impact to municipalities and municipal utility districts (MUDs). Section 14(e) of the bill allows a MUD with boundaries that overlap those of a municipality to be the controlling jurisdiction over plumbing inspections if the MUD has stricter plumbing standards than the municipality and the inspection is performed by a state-licensed plumber. Accordingly, some MUDs may experience an increase in plumbing inspections and related revenues from inspection permit fees. Conversely, some municipalities may experiences a decrease in plumbing inspections and fee revenue. However, municipalities with stricter plumbing standards than MUDs may experience an increase in the number of plumbing inspections performed. It is assumed that any increase in costs would be offset by an increase in inspection permit fees as allowed under Section 14(f) of the bill. Source: Agencies: LBB Staff: JK ,TH ,BK